February 25, 2016

Halcon Resources Announces Fourth Quarter and Full Year 2015 Results

HOUSTON, Feb. 25, 2016 (GLOBE NEWSWIRE) -- Halcón Resources Corporation (NYSE:HK) ("Halcón" or the "Company") today announced its fourth quarter and full year 2015 results.

Production for the three months and full year ended December 31, 2015 averaged 41,087 barrels of oil equivalent per day (Boe/d) and 41,542 Boe/d, respectively.  Production was comprised of 77% oil, 11% natural gas liquids (NGLs) and 12% natural gas for the quarter and 79% oil, 10% NGLs and 11% natural gas for the year. 

Halcón generated total revenues of $116.1 million for the fourth quarter of 2015.  Revenues for the full year 2015 totaled $550.3 million

Excluding the impact of hedges, Halcón realized 88% of the average NYMEX oil price, 18% of the average NYMEX oil price for NGLs and 88% of the average NYMEX natural gas price during the fourth quarter 2015.  For the full year 2015, excluding the impact of hedges, the Company realized 87% of the average NYMEX oil price, 19% of the average NYMEX oil price for NGLs and 85% of the average NYMEX natural gas price.  Realized hedge proceeds totaled $129 million in the fourth quarter and $440 million for the full year 2015.

Total operating costs per unit, after adjusting for selected items (see Selected Operating Data table for additional information), decreased by 16% to $17.80 per Boe during the three months ended December 31, 2015, compared to the same period of 2014.  Total operating costs per unit for the full year, after adjusting for selected items (see Selected Operating Data table for additional information), were $18.00 per Boe, representing a decrease of 25% versus 2014. 

After adjusting for selected items primarily related to a non-cash, pre-tax full cost ceiling impairment charge and a non-cash, pre-tax gain on the extinguishment of debt (see Selected Item Review and Reconciliation table for additional information), net income was $59.3 million, or $0.41 per diluted share, and $128.4 million, or $0.97 per diluted share, for the fourth quarter and full year 2015, respectively.  Halcón reported a net loss available to common stockholders of $424.7 million, or $3.56 per diluted share for the fourth quarter and $2.0 billion, or $18.66 per diluted share for the year. 

Liquidity and Capital Spending

As of December 31, 2015 Halcón's liquidity was approximately $789 million, which consisted of cash on hand plus undrawn capacity on the Company's senior secured revolving credit facility with a $827 million borrowing base.  The Company is currently working with its senior revolver lenders on its spring 2016 redetermination and expects the borrowing base to be revised to between $650 million and $700 million.

During the fourth quarter of 2015, the Company incurred capital costs of $58 million on drilling and completions, and less than $2 million on infrastructure, seismic and leasehold acquisitions.  In addition, Halcón incurred $42 million for capitalized interest, G&A and other.   

The Company incurred capital costs of $322 million on drilling and completions, $11 million on infrastructure/seismic and $12 million on leasehold acquisitions in 2015.  In addition, Halcón incurred $142 million for capitalized interest, G&A and other.  

Hedging Update

Halcón has 25,497 barrels per day of oil hedged for 2016 at an average price of $80.59 per barrel.  For 2017, the Company has 3,750 barrels per day of oil hedged at an average price of $65.75 per barrel.  Halcón estimates the pre-tax mark-to-market value of its hedge portfolio to be approximately $381 million as of February 24, 2016

2015 Proved Reserves

The Company's estimated proved reserves as of December 31, 2015 were approximately 146.8 million barrels of oil equivalent (MMBoe). Year-end 2015 estimated proved reserves were 82% oil, 9% NGLs and 9% natural gas on an equivalent basis. Of total estimated proved reserves, 83% were in the Williston Basin, 15% were in the East Texas Eagle Ford ("El Halcón") and 2% were in other areas. Year-end 2015 estimated proved reserves were approximately 95% Company-operated and 56% proved developed.

Halcón's estimated proved reserves at December 31, 2015 were prepared by the independent reserve engineering firm Netherland, Sewell and Associates, Inc. in accordance with Securities and Exchange Commission guidelines using NYMEX prices of $50.28 per barrel for oil and $2.59 per million British Thermal Unit for natural gas, before adjustments for energy content, quality, midstream fees and basis differentials.

Operations Update

The Company is currently running 2 operated rigs in the Fort Berthold area of the Williston Basin but will scale down to 1 rig operating in the Fort Berthold area by the end of March 2016.  Although Halcón currently has 1 operated rig running in its El Halcón area, the Company does not plan to run any rigs in this area after March of 2016 until oil prices improve.  The Company currently has 13 wells in the Bakken and 2 wells in the East Texas Eagle Ford being completed or waiting on completion.

Bakken/Three Forks

The Company operated an average of 2 rigs and 2.2 rigs in the Williston Basin during the fourth quarter and full year 2015, respectively.

Halcón spudded 10 wells and put 5 wells online in the Williston Basin during the three months ended December 31, 2015. The Company also participated in 27 non-operated wells during the quarter with an average working interest of approximately 1.4%. Production averaged 29,721 Boe/d during the fourth quarter of 2015 in the Williston Basin.

For the full year 2015, Halcón spudded 39 wells and put 39 wells online in the Williston Basin. The Company also participated in 100 non-operated wells during the year with an average working interest of approximately 1.7%.

Halcón plans to concentrate its efforts in its highest return area (Fort Berthold Indian Reservation, or FBIR) in 2016 and anticipates spending approximately 80% to 85% of its total drilling and completions budget in the FBIR area of the Williston Basin.

During 2015, the Company put 33 operated wells online in the FBIR with an average EUR of 800 MBoe (25 Middle Bakken, 8 Three Forks).  In 2016, Halcón expects wells put online to have an average EUR of approximately 900 MBoe as it focuses drilling on the best parts of its acreage position. 

In 2015, the Company put 6 operated Middle Bakken wells online in Williams County with an average EUR of 553 MBoe.  Although Halcón does not plan to drill in Williams County in 2016, any wells drilled in this area would generate a positive return at current strip prices based on 2015 EURs. 

The Company continues to improve on well costs with current FBIR AFEs at $6.2 million and Williams County AFEs at $5.7 million.

Halcón currently has working interests in approximately 123,000 net acres prospective for the Bakken and Three Forks formations in the Williston Basin, substantially all of which are held by production (HBP). The Company plans to operate an average of 1 rig and spud 15 to 20 gross operated wells in 2016 with an average working interest of approximately 60%. Halcón also expects to participate in 50 to 65 gross non-operated wells in 2016 with an average working interest of approximately 1.5%.

The Company is currently the operator of 204 producing Bakken wells and 65 Three Forks wells. Halcón currently has 12 Bakken wells and 5 Three Forks wells being completed or waiting on completion on its operated acreage.

"El Halcón" - East Texas Eagle Ford

The Company operated an average of 1 rig in El Halcón during the fourth quarter and full year 2015. Halcón spudded 4 wells and put 4 wells online in the play during the three months ended December 31, 2015. For the full year 2015, the Company spudded 16 wells and put 19 wells online.  Production averaged 7,278 Boe/d during the fourth quarter of 2015 in El Halcón.

Halcón currently has working interests in approximately 92,000 net acres prospective for the Eagle Ford formation in East Texas, approximately 72% of which is HBP. The Company plans to operate 1 rig through the first quarter of 2016 and spud 2 gross operated wells with an average working interest of approximately 98%. Halcón anticipates spending approximately 15% to 20% of its total drilling and completions budget in the play in 2016.

There are currently 110 Company-operated El Halcón wells producing and 1 Halcón-operated well currently drilling along with 2 Halcón-operated wells being completed or waiting on completion.

Conference Call and Webcast Information

Halcón Resources Corporation (NYSE:HK) has scheduled a conference call for Friday February 26, 2016, at 10:00 a.m. EST (9:00 a.m. CST). To participate in the conference call, dial (877) 810-3368 for domestic callers, and (914) 495-8561 for international callers a few minutes before the call begins and reference Halcón Resources conference ID 34260487. The conference call will also be webcast live over the Internet on Halcón Resources' website at http://www.halconresources.com in the Investor Relations section under Events & Presentations.  A telephonic replay of the call will be available approximately two hours after the live broadcast ends and will be accessible until March 4, 2016.  To access the replay, dial (855) 859-2056 for domestic callers or (404) 537-3406 for international callers, in both cases referencing conference ID 34260487. 

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.

For more information contact Quentin Hicks, Senior Vice President of Finance & Investor Relations, at 832-538-0557 or qhicks@halconresources.com.

Forward-Looking Statements

This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities 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.  Forward-looking statements are based on current beliefs and expectations and involve certain assumptions or estimates that involve various risks and uncertainties that could cause actual results to differ materially from those reflected in the statements. These risks include, but are not limited to, those set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and other filings submitted by the Company to the U.S. Securities and Exchange Commission (SEC), copies of which may be obtained from the SEC's website at www.sec.gov or through the Company's website at www.halconresources.com. Readers should not place undue reliance on any such forward-looking statements, which are made only as of the date hereof. The Company has no duty, and assumes no obligation, to update forward-looking statements as a result of new information, future events or changes in the Company's expectations.


HALCÓN RESOURCES CORPORATION 
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) 
(In thousands, except per share amounts) 
             
     Three Months Ended December 31, Years Ended December 31, 
      2015    2014   2015    2014  
Operating revenues:         
 Oil, natural gas and natural gas liquids sales:         
  Oil  $  107,978  $  223,215   $  512,346  $  1,071,319  
  Natural gas    4,914     9,136     22,509     37,101  
  Natural gas liquids    3,052     9,064     13,624     37,460  
    Total oil, natural gas and natural gas liquids sales    115,944     241,415     548,479     1,145,880  
 Other    177     (1,956)    1,799     2,381  
    Total operating revenues    116,121     239,459     550,278     1,148,261  
             
Operating expenses:          
 Production:         
   Lease operating    22,324     34,539     103,590     130,239  
    Workover and other    9,248     3,643     20,862     16,193  
   Taxes other than income     11,644     23,329     48,890     106,331  
 Gathering and other    9,698     8,600     40,281     26,719  
 Restructuring    222      -     2,886     987  
 General and administrative    19,668     26,422     87,766     116,532  
 Depletion, depreciation and accretion    66,795     145,465     364,204     534,421  
 Full cost ceiling impairment    611,787      178,503     2,626,305     239,668  
 Other operating property and equipment impairment    -     31,769     -     35,558   
    Total operating expenses    751,386      452,270     3,294,784     1,206,648  
Income (loss) from operations    (635,265 )    (212,811)    (2,744,506)    (58,387) 
Other income (expenses):         
  Net gain (loss) on derivative contracts    93,459     510,367     310,264     518,956  
  Interest expense and other, net    (52,672)    (38,575)    (232,878)    (145,689) 
  Gain (loss) on extinguishment of debt    203,897     -     761,804      -  
  Gain (loss) on extinguishment of Convertible Note and          
  modification of February 2012 Warrants    -     -     (8,219)    -  
     Total other income (expenses)    244,684     471,792     830,971     373,267  
Income (loss) before income taxes    (390,581)    258,981     (1,913,535)    314,880  
Income tax benefit (provision)    (2,862)    (219)    (9,086)    1,076  
Net income (loss)    (393,443)    258,762     (1,922,621)    315,956  
Series A preferred dividends    (3,518)    (4,960)     (17,517)    (19,838) 
Preferred dividends and accretion on redeemable noncontrolling interest   (27,751)    (6,457)    (66,820)    (13,176) 
Net income (loss) available to common stockholders $  (424,712) $  247,345  $  (2,006,958) $  282,942  
             
Net income (loss) per share of common stock:         
   Basic $  (3.56) $  2.96  $  (18.66) $  3.40  
   Diluted $  (3.56) $  2.38  $  (18.66) $  2.93  
Weighted average common shares outstanding:          
   Basic    119,420     83,457     107,531     83,155  
   Diluted    119,420     107,844     107,531     108,481  
              



HALCÓN RESOURCES CORPORATION 
CONSOLIDATED BALANCE SHEETS (Unaudited) 
(In thousands, except share and per share amounts) 
        
    December 31, 
     2015   2014  
Current assets:     
   Cash $  8,026  $  43,713  
   Accounts receivable    173,624     276,559  
   Receivables from derivative contracts    348,861     352,530  
   Restricted cash    16,812     16,131  
   Inventory    4,635     4,693  
   Prepaids and other    4,635     9,079  
     Total current assets    556,593     702,705  
Oil and natural gas properties (full cost method):     
   Evaluated    7,060,721     6,390,820  
   Unevaluated    1,641,356     1,829,786  
     Gross oil and natural gas properties    8,702,077     8,220,606  
   Less - accumulated depletion    (5,933,688)    (2,953,038) 
     Net oil and natural gas properties    2,768,389     5,267,568  
Other operating property and equipment:     
   Gas gathering and other operating assets    130,090     126,804  
   Less - accumulated depreciation    (22,435)    (14,798) 
     Net other operating property and equipment    107,655     112,006  
Other noncurrent assets:     
   Receivables from derivative contracts    16,614     151,324  
   Debt issuance costs, net     7,633     4,656  
   Deferred income taxes    -     136,826  
   Equity in oil and natural gas partnership    209     4,309  
   Funds in escrow and other    1,599      3,833  
Total assets $  3,458,692  $  6,383,227  
        
Current liabilities:     
   Accounts payable and accrued liabilities $  295,085  $  607,750  
   Asset retirement obligations    163     106  
   Current portion of deferred income taxes    -     136,826  
     Total current liabilities    295,248     744,682  
Long-term debt, net    2,873,637     3,695,488  
Other noncurrent liabilities:     
   Liabilities from derivative contracts    290     9,387  
   Asset retirement obligations    46,853      38,371  
   Other    6,264     5,964  
Commitments and contingencies      
Mezzanine equity:     
   Redeemable noncontrolling interest    183,986      117,166  
Stockholders' equity:     
   Preferred stock: 1,000,000 shares of $0.0001 par value authorized; 244,724 and 345,000     
     shares of 5.75% Cumulative Perpetual Convertible Series A, issued and outstanding      
     at December 31, 2015 and 2014, respectively    -     -  
   Common stock: 1,340,000,000 shares of $0.0001 par value authorized;     
   122,523,559 and 85,561,662 shares issued and outstanding     
     at December 31, 2015 and 2014, respectively    12     8  
   Additional paid-in capital    3,283,097     2,995,436  
   Accumulated deficit    (3,230,695)    (1,223,275) 
     Total stockholders' equity    52,414     1,772,169  
Total liabilities and stockholders' equity $  3,458,692  $  6,383,227  
        



HALCÓN RESOURCES CORPORATION 
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 
(In thousands) 
             
    Three Months Ended December 31, Years Ended December 31, 
     2015    2014   2015    2014  
Cash flows from operating activities:         
Net income (loss) $  (393,443) $  258,762  $  (1,922,621) $  315,956  
Adjustments to reconcile net income (loss) to net cash          
provided by (used in) operating activities:         
   Depletion, depreciation and accretion    66,795     145,465     364,204     534,421  
   Full cost ceiling impairment    611,787     178,503     2,626,305     239,668  
   Other operating property and equipment impairment    -     31,769     -      35,558  
   Share-based compensation, net    3,284     4,896     14,529     18,733  
   Unrealized loss (gain) on derivative contracts    35,310     (469,625)    129,282     (508,285) 
   Amortization and write-off of deferred loan costs    1,355     1,117     7,357     4,315  
   Non-cash interest and amortization of discount and premium    480     804      2,509     2,780  
   Loss (gain) on extinguishment of debt    (203,897)    -     (761,804)    -  
   Loss (gain) on extinguishment of Convertible Note and         
    modification of February 2012 Warrants    -     -     8,219     -  
   Accrued settlements on derivative contracts    (9,208)    (25,868)    (47,011)    (25,868) 
   Other expense (income)    3,129     (1,841)    8,934     (2,435) 
Cash flow from operations before changes in working capital    115,592     123,982     429,903     614,843  
Changes in working capital, net of acquisitions    19,213     (37,938)    37,096     53,091  
Net cash provided by (used in) operating activities    134,805     86,044     466,999     667,934  
            
Cash flows from investing activities:          
   Oil and natural gas capital expenditures    (127,678)    (345,692)    (659,419)    (1,524,341) 
   Proceeds received from sales of oil and natural gas assets    111     4,210     1,222     484,184  
   Advance on carried interest    -     -     -     (189,442) 
   Other operating property and equipment capital expenditures    (925)    (2,727)    (10,838)    (43,083) 
   Funds held in escrow and other    26     368     1,903     1,589  
Net cash provided by (used in) investing activities    (128,466)    (343,841)    (667,132)    (1,271,093) 
            
Cash flows from financing activities:         
   Proceeds from borrowings    255,000     532,000     1,834,000     2,276,000  
   Repayments of borrowings    (251,804)    (320,000)    (1,643,804)    (1,719,000) 
   Debt issuance costs    (3,865)    (62)    (29,568)    (819) 
   Series A preferred dividends    (3,521)    (4,960)    (8,177)    (4,960) 
   Common stock issued    2     -     15,356     -  
   HK TMS, LLC preferred stock issued    -     -     -     110,051  
   HK TMS, LLC tranche rights    -     -     -     4,516  
   Preferred dividends on redeemable noncontrolling interest    -     -     -      (3,518) 
   Restricted cash    (133)    (147)    (543)    (16,131) 
   Offering costs and other    (246)    (9)    (2,818)    (2,101) 
Net cash provided by (used in) financing activities    (4,567)    206,822     164,446     644,038  
            
Net increase (decrease) in cash     1,772     (50,975)    (35,687)    40,879  
            
Cash at beginning of period    6,254     94,688     43,713     2,834  
Cash at end of period $  8,026  $  43,713  $  8,026  $  43,713  
            



HALCÓN RESOURCES CORPORATION   
SELECTED OPERATING DATA  
(Unaudited)  
            
  Three Months Ended December 31, Years Ended December 31,  
   2015   2014   2015    2014   
           
Production volumes:          
Crude oil (MBbls)    2,923      3,444     12,019     12,787   
Natural gas (MMcf)    2,679     2,620     10,123     8,812   
Natural gas liquids (MBbls)    411     358     1,457     1,113   
Total (MBoe)    3,780      4,239     15,163     15,369   
Average daily production (Boe)    41,087     46,076     41,542     42,107   
           
Average prices:           
Crude oil (per Bbl) $  36.94  $  64.81  $  42.63  $  83.78   
Natural gas (per Mcf)    1.83     3.49     2.22     4.21   
Natural gas liquids (per Bbl)    7.43     25.32     9.35     33.66   
Total per Boe    30.67      56.95     36.17     74.56   
           
Cash effect of derivative contracts:          
Crude oil (per Bbl) $  43.11  $  11.79  $  35.87  $  0.94   
Natural gas (per Mcf)    1.03     0.05     0.84     (0.15)  
Natural gas liquids (per Bbl)    -      -       -      -    
Total per Boe    34.07     9.61     28.99     0.69   
           
Average prices computed after cash effect of settlement of derivative contracts:         
Crude oil (per Bbl) $  80.05  $  76.60  $  78.50  $  84.72   
Natural gas (per Mcf)    2.86     3.54     3.06      4.06   
Natural gas liquids (per Bbl)    7.43     25.32     9.35     33.66   
Total per Boe    64.74     66.56      65.16     75.25   
           
Average cost per Boe:          
Production:          
Lease operating $  5.91  $  8.15  $  6.83  $  8.47   
Workover and other    2.45     0.86     1.38     1.05   
Taxes other than income    3.08     5.50     3.22     6.92   
Gathering and other (1)    2.21     1.96     2.00     1.72   
Restructuring    0.06     -      0.19     0.06   
General and administrative, as adjusted (1)    4.15     4.80     4.57      5.98   
Depletion    17.03     33.66     23.37     34.09    
           
(1) Represents gathering and other and general and administrative costs per Boe, adjusted for items noted in the reconciliation below: 
           
General and administrative:           
General and administrative, as reported $  5.20  $  6.23  $  5.79  $  7.58   
Share-based compensation:          
Non-cash    (0.87)    (1.15)    (0.96)    (1.22)  
Acquisition and merger transaction costs:          
Cash     (0.18)    (0.28)    (0.26)    (0.38)  
General and administrative, as adjusted $  4.15  $  4.80  $  4.57  $  5.98   
           
Gathering and other, as reported $  2.57  $  2.03  $  2.66  $  1.74   
  Total adjusting items     (0.36)    (0.07)    (0.66)    (0.02)  
Gathering and other, as adjusted $  2.21  $  1.96  $  2.00  $  1.72   
            
Total operating costs, as reported $  19.21  $  22.77  $  19.88  $  25.76   
  Total adjusting items     (1.41)    (1.50)    (1.88)    (1.62)  
Total operating costs, as adjusted (2) $  17.80  $  21.27  $  18.00   $  24.14   
           
(2) Represents lease operating, workover and other expense, taxes other than income, gathering and other expense and general and administrative costs per Boe, adjusted for items noted in reconciliation above.  
  
           



HALCÓN RESOURCES CORPORATION 
SELECTED ITEM REVIEW AND RECONCILIATION (Unaudited) 
(In thousands, except per share amounts) 
          
          
  Three Months Ended December 31, Years Ended December 31, 
   2015   2014   2015   2014  
As Reported:         
Net income (loss) available to common stockholders, as reported $  (424,712) $  247,345  $  (2,006,958) $  282,942  
Series A preferred dividends    3,518     4,960     17,517     19,838  
Preferred dividends and accretion on redeemable noncontrolling interest    27,751     6,457     66,820     13,176  
Net income (loss) $  (393,443) $  258,762  $  (1,922,621) $  315,956  
          
Impact of Selected Items:         
Unrealized loss (gain) on derivatives contracts:         
Crude oil $  33,291  $  (464,055) $  123,441  $  (499,882) 
Natural gas     2,019     (5,571)    5,841     (6,644) 
Total mark-to-market non-cash charge    35,310     (469,626)    129,282     (506,526) 
Full cost ceiling impairment    611,787     178,503     2,626,305     239,668  
Other operating property and equipment impairment    -     31,769     -     35,558  
Loss (gain) on extinguishment of debt    (203,897)    -     (761,804)    -  
Loss (gain) on extinguishment of Convertible Note and modification of February 2012 Warrants    -     -     8,219     -  
Deferred financing costs expensed, net(1)    128     -     1,331     499  
Restructuring    222     -     2,886     987  
Rig termination / stacking charges and other    4,915      (725)    24,998     4,052  
Selected items, before income taxes    448,465     (260,079)    2,031,217     (225,762) 
Income tax effect of selected items(2)     -     21,926     -     (18,447) 
Selected items, net of tax $  448,465  $  (238,153) $  2,031,217  $  (244,209 ) 
          
As Adjusted:         
Net income (loss) available to common stockholders, excluding selected items $  55,022  $  20,609  $  108,596  $  71,747  
Net income (loss) from assumed conversions    4,245     -     19,799     -  
Net income (loss) available to common stockholders after assumed conversions, excluding selected items(3) $  59,267  $  20,609  $  128,395  $  71,747  
          
          
Basic net income (loss) per common share, as reported $  (3.56) $  2.96  $  (18.66) $  3.40  
Impact of selected items    4.02     (2.71)    19.67     (2.54) 
Basic net income (loss) per common share, excluding selected items(3) $  0.46  $  0.25  $  1.01  $  0.86  
          
Diluted net income (loss) per common share, as reported $  (3.56) $  2.38  $  (18.66) $  2.93  
Impact of selected items    3.97     (2.13)    19.63     (2.08) 
Diluted net income (loss) per common share, excluding selected items(3)(4) $  0.41  $  0.25  $  0.97  $  0.85  
          
          
Net cash provided by (used in) operating activities $  134,805  $  86,044  $  466,999  $  667,934  
Changes in working capital, net of acquisitions    (19,213)    37,938     (37,096)    (53,091) 
Cash flow from operations before changes in working capital    115,592     123,982     429,903     614,843  
Cash components of selected items    11,467     1,506     66,316     6,931  
Income tax effect of selected items(2)    -     (558)    -     (2,567) 
Cash flow from operations before changes in working capital, adjusted for selected items(4) $  127,059  $  124,930  $  496,219  $  619,207  
          
(1) Represents charges related to the write-off of debt issuance costs associated with decreases in the Company's borrowing base under its senior revolving credit facility.    
(2) For the 2015 columns, this represents the tax impact using an estimated tax rate of 0.0% due to the Company maintaining a full valuation allowance.  For the 2014 columns, this represents tax impact using an estimated tax rate of 37.04%. These columns include a $(74.4) million (quarter-to-date) and $(102.1) million (year-to-date) adjustment for the change in valuation allowance.
(3) Net income (loss) and earnings per share excluding selected items and cash flow from operations before changes in working capital adjusted for selected items are non-GAAP measures. These financial measures are presented based on management's belief that they will enable a user of the financial information to understand the impact of these items on reported results. Additionally, this presentation provides a beneficial comparison to similarly adjusted measurements of prior periods.  These financial measures are not measures of financial performance under GAAP and should not be considered as an alternative to net income, earnings per share and cash flow from operations, as defined by GAAP.  These financial measures may not be comparable to similarly named non-GAAP financial measures that other companies may use and may not be useful in comparing the performance of those companies to Halcón's performance. 
(4) The impact of selected items for the three months ended and year ended December 31, 2015 was calculated based upon weighted average diluted shares of 144.8 million and 131.8 million, respectively, due to the net income available to common stockholders, excluding selected items.  
          
Quentin Hicks

SVP, Finance & Investor Relations

(832) 538-0557

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Source: Halcon Resources

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