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Halcon Resources Plans 14% Cut in Capital Spending
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HOUSTON -- Halcon Resources Corp. announced Monday that it would reduce its capital spending program for 2014 by 14% while divesting between $300 million and $400 million of its noncore assets.
Halcon said it plans to lower its drilling and completions budget to $950 million next year, “which is inclusive in planned drilling activity in all areas.” The company provided no additional information.
Halcon is a major player in the northern tier of the Utica shale, especially in Trumbull and Mahoning counties.
During a conference call with analysts Nov. 5, Halcon CEO Floyd Wilson was blunt in his assessment of the performance of Utica wells drilled in the more northern parts of the company's acreage position. "Well, we won't drill any more wells near the shitty ones we drilled already," he said in response to one analyst’s question about the Utica (READ STORY).
The company bought out a position initially held by Carrizo Oil and Gas that included acreage in Hartford Township in Trumbull County, and Mercer and Crawford counties in Pennsylvania.
Wilson reported that the company instead would concentrate drilling activity in the southwestern portion of Trumbull County and the northwestern corner of Mahoning County.
Halcon's Kibler 1H well has performed well, and a second well at that site was recently spud, he announced during the call.
The company expects to spend $100 million to $125 million in aggregate on leasehold, infrastructure, seismic, and other areas in 2014 across the three major shale plays where its drilling.
Halcon reaffirmed its previously issued production guidance for 2014 of between 38,000 to 42,000 barrels of oil equivalent per day.
"We expect to fund our entire 2014 capital budget with a combination of cash flow from operations, borrowings under our revolving-credit facility, and proceeds from additional noncore asset sales," Wilson said in a statement. "We are well-positioned to deliver significant growth of reserves, production and cash flow while maintaining capital discipline. In addition, we are focused on capital efficiency and intend to achieve higher rates of return across out asset portfolio via a persistent emphasis on technological innovation."
Published by The Business Journal, Youngstown, Ohio.
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