Halcón Resources to Acquire Williston Basin Assets
Company Adds 81,000 Net Acres and Over 10,500 Boe/d in Core Area
HOUSTON, TEXAS, Oct. 22, 2012 (GLOBE NEWSWIRE) -- Halcón Resources Corporation (NYSE: HK) ("Halcón" or the
"Company") today announced that it has entered into a privately
negotiated definitive agreement with Petro-Hunt, L.L.C. and an
affiliated entity, to acquire producing and undeveloped oil and gas
assets in the Williston Basin ("Williston Basin Assets") for an
aggregate purchase price of approximately $1.45 billion, consisting
of $700 million in cash and $750 million in equity.
The Williston Basin Assets are comprised of approximately 81,000
net acres (~95% operated) prospective for the Bakken and Three
Forks formations primarily located in Williams, Mountrail, McKenzie
and Dunn Counties, North Dakota. Current average net
production from these assets is in excess of 10,500 barrels of oil
equivalent per day (Boe/d) and total proved reserves, as estimated
by third party reserve engineers, are approximately 42.4 million
barrels of oil equivalent (MMBoe), 88% oil, with an internally
estimated resource potential of greater than 100 MMBoe.
Currently there are five operated drilling rigs running on the
properties.
On a pro forma basis for this transaction, the Company has over
135,000 net acres in the Williston Basin and company-wide current
average net production is approximately 26,500 Boe/d.
Additionally, Halcón has entered into an agreement pursuant to
which Canada Pension Plan Investment Board ("CPPIB") has agreed to
purchase $300 million of the Company's common stock at $7.16 per
share, subject to customary closing conditions and the
successful closing of the acquisition of the Williston Basin
Assets.
Halcón has secured financing commitments from Wells Fargo, J.P.
Morgan, Goldman Sachs and Barclays pursuant to which the borrowing
base under the Company's senior secured revolving credit
facility will be increased to $850 million and such banks have
agreed to provide a $500 million bridge loan commitment.
Floyd C. Wilson, Halcón's Chairman and Chief Executive Officer,
stated, "This acquisition is immediately accretive on all measures
and is consistent with our strategy of building an oil company with
a multi-year drilling inventory in several liquids-rich
basins. The assets we are acquiring are located in what is
arguably the most attractive oil producing basin in the lower 48,
on a risk adjusted basis. This transaction improves our
leverage profile and will effectively increase our estimated proved
reserves on a pro forma basis by over 58% to approximately 115
million barrels of oil equivalent, 79% of which is liquids."
Bruce W. Hunt, President of Petro-Hunt, L.L.C., commented, "We
are pleased to become a significant Halcón shareholder through this
transaction. The track record of Halcón's management team
speaks for itself and we are confident they will do a great job of
developing these solid assets. Petro-Hunt has a long history
of operating oil and gas properties in the Williston Basin.
We will continue to operate production of approximately 24,000
Boe/d and develop our 600,000 plus acres of oil and gas leasehold
in the Williston Basin with the full attention of our existing
staff."
R. Scott Lawrence, CPPIB's Vice-President, Head of Relationship
Investments, remarked, "CPPIB's investment aligns with our strategy
to provide strategic, long-term capital to well-positioned
companies like Halcón and work with management to help create value
now and in the future."
The $750 million equity consideration will initially be issued
as preferred stock that will automatically convert into common
stock at $7.45 per share following an increase in Halcón's
authorized common shares to accommodate conversion and obtaining
certain regulatory approvals.
Terms and Conditions
The Company's board of directors has unanimously approved the
transaction, which is subject to customary closing conditions,
including approval of listing of the Halcón common stock to be
issued in the transaction on the New York Stock Exchange and
regulatory clearance. The effective date of the transaction
is June 1, 2012, and Halcón anticipates completing the transaction
in December 2012.
Mitchell Energy Advisors acted as financial advisor to
Halcón.
Tudor, Pickering, Holt & Co. acted as financial advisor to
CPPIB.
Investor Conference Call
Halcón will host a conference call on October 22, 2012 to
discuss the proposed transaction at 9:00 a.m. EDT (8:00 a.m. CDT).
Investors may participate in the conference call via
telephone by dialing (877) 810-3368 for domestic callers or (914)
495-8561 for international callers, in both cases using conference
ID 43905963, and asking for the Halcón call a few minutes prior to
the start time. An accompanying slide presentation and a link
to the live audio webcast will be available on Halcón's website at
http://www.halconresources.com
on the day of the presentation.
About Halcón Resources
Halcón Resources Corporation is an independent energy company
engaged in the acquisition, production, exploration and development
of onshore oil and natural gas properties in the United States.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the
Securities and Exchange Act of 1934 as amended. Statements that are
not strictly historical statements constitute forward-looking
statements and may often, but not always, be identified by the use
of such words such as "expects", "believes", "intends",
"anticipates", "plans", "estimates", "potential", "possible", or
"probable" or statements that certain actions, events or results
"may", "will", "should", or "could" be taken, occur or be achieved.
The forward-looking statements include statements about future
operations, estimates of reserve and production volumes and the
anticipated timing for closing the proposed transaction.
Forward-looking statements are based on current expectations and
assumptions and analyses made by us in light of our experience and
our perception of historical trends, current conditions and
expected future developments, as well as other factors we believe
are appropriate under the circumstances. However, whether actual
results and developments will conform with expectations is subject
to a number of risks and uncertainties, including but not limited
to: the possibility that Halcón may be unable to satisfy the
conditions to closing; that the acquisition may involve unexpected
costs; the risks of the oil and gas industry (for example,
operational risks in exploring for, developing and producing crude
oil and natural gas; risks and uncertainties involving geology of
oil and gas deposits; the uncertainty of reserve estimates; the
uncertainty of estimates and projections relating to future
production, costs and expenses; potential delays or changes in
plans with respect to exploration or development projects or
capital expenditures; health, safety and environmental risks and
risks related to weather such as hurricanes and other natural
disasters); uncertainties as to the availability and cost of
financing; fluctuations in oil and gas prices; inability to timely
integrate and realize expected value from acquisitions; inability
of management to execute its plans to meet its goals; shortages of
drilling equipment, oil field personnel and services;
unavailability of gathering systems, pipelines and processing
facilities; and the possibility that government policies may change
or governmental approvals may be delayed or withheld.
Halcón's annual report on Form 10-K for the year ended December 31,
2011, subsequent quarterly reports on Form 10-Q and current reports
on Form 8-K, and other Securities and Exchange Commission filings
discuss some of the important risk factors identified that may
affect the business, results of operations, and financial
condition. Halcón undertakes no obligation to revise or update
publicly any forward-looking statements for any reason.
CONTACT: Scott M. Zuehlke
VP, Investor Relations
Halcon Resources
(832) 538-0314
Source:
Halcon Resources
News Provided by Acquire Media
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