Halcón Resources Corporation (NYSE:HK) Q1 2019 Earnings Conference Call Transcript

May 10, 2019 • 11:00 am ET


Halcón Resources Corporation (NYSE:HK) Q1 2019 Earnings Conference Call Transcript


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Greetings and welcome to the Halcon Resources Corporation First Quarter 2019 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Jim Christmas, Chairman of the Board. Thank you, sir. You may begin.

James Christmas

Thank you. Good morning, and thanks for dialing-in today. I'll just remind everybody that this conference call contains forward-looking statements. For a detailed description of our disclaimer, see our earnings release issued yesterday and posted on our website. We've also updated our investor presentation, which you can access on our website.

Just wanted to begin today briefly to give an update on where we are as it relates to our review of strategic and financial alternatives. As previously indicated, we've hired advisors to assist the Board in developing the optimum go-forward strategy for Halcon. Tudor Pickering and Holt and Perella Weinberg Partners were hired in late March to assist in these efforts. And so we're about in the middle of the process right now and looking at a range of options, including M&A, asset sales and stand-alone financing alternatives. We don't have anything specific to say today. We will provide further updates on this process as appropriate in the future. We've also engaged in a search for and are in the process of looking for a new CEO.

Finally, although we're obviously not pleased with share price and overall performance, we are encouraged with the progress our team has made in the field, specifically as it relates to handling H2S and getting back to drilling in Monument Draw, which is clearly our best area. We look forward to continuing to develop this acreage position throughout the remainder of 2019.

I would like to turn the call over to Quentin to provide some comments on the first quarter results and recent developments that were related to our senior credit facility. Quentin?

Quentin Hicks

Thanks, Jim. Production for the first quarter average just above 17,000 barrels of oil equivalent per day, comprised of about 60% oil. We continue to be impacted by sour gas, handling and takeaway constraints in Monument Draw during the quarter. These constraints include multiple days when we were curtailed on our ability to flow sour gas to third-party sales line in addition to more than a week of complete downtime at one of our primary third-party sour gas sales outlets.

As we are unable to flare our sour gas, these curtailments and outages resulted in shut-in oil and gas production for many days during the first quarter. We expect fewer issues in relation to third-party sour gas outlets going forward, now that our Halcon-owned H2S treating plant is operational. And in fact, after putting our treating plant into operation, we were able to put four new wells online in Monument Draw here in the last month resulting in current net production in excess of 20,000 Boe a day. Jon will provide more color on our new treating plant and other operational developments in a moment.