Matt Zborowski
Assistant Editor
Halcon Resources Corp., Houston, has agreed to sell its operated oil and gas properties in the Williston basin to Bruin E&P Partners LLC, a Houston portfolio company of private equity firm ArcLight Capital Partners LLC, for $1.4 billion. The move further solidifies Halcon's new Delaware basin focus.
The deal, expected to close within 60 days, covers 104,000 net acres in McKenzie, Williams, Mountrail, and Dunn counties of North Dakota, with the acreage 100% held by production. The assets are currently producing 29,000 boe/d.
Matt Steele, Bruin chief executive officer, said the deal provides his firm, formed in 2015, "an opportunity to add significant scale, acreage, inventory, and production that is exceptionally complementary to Bruin's existing asset base."
Dan Revers, ArcLight managing partner, noted that core well results in the Bakken-Three Forks formations "now compete with other premier basins thanks to steadily improving completion techniques but with a significantly more attractive entry price."
Halcon in June said it also hopes to complete a sale of its nonoperated Williston assets this summer. The properties cover 15,600 net acres, produce 2,350 boe/d, of which 91% is oil, and include more than 1,000 gross undeveloped locations.
Delaware basin focus
Halcon plans to continue running two rigs in the Delaware for the remainder of 2017 and expects to exit the year with net production of more than 13,000 boe/d.
"The sale of our Williston basin operated assets transforms Halcon into a single-basin company focused on the Delaware basin where we have more than 41,000 net acres in Ward and Pecos counties [of Texas] representing decades of highly economic drilling inventory," commented Floyd Wilson, Halcon chairman, chief executive officer, and president.
Halcon earlier this year entered the Delaware-and the southern portion of the basin specifically-by acquiring 20,748 net acres in Pecos and Reeves counties in Texas for $705 million (OGJ Online, Jan. 26, 2017).
As part of a second deal with a separate operator, Halcon last month exercised its option to buy 6,720 net acres on a southern tract in Ward County for $11,000/acre after drilling the firm's first operated well in the Delaware there.
Well CRMWD 79 No. 1H was put online in early May and was completed with an effective lateral length of 5,167 ft targeting the Wolfcamp A interval. As of June 1, the well's peak 10-day average rate was 1,235 boe/d despite flowing back on a restricted choke, with 84% of production as oil.
Halcon also plans to spud a vertical well on an 8,320-net-acre northern tract in Ward County during the third quarter followed by a horizontal well shortly thereafter. The firm expects to exercise its option to buy that position, also for $11,000/acre, by the option expiration date of Dec. 31.
In yet another deal, the firm recently acquired 3,634 net acres in Pecos County for $88 million. The Delaware deals have come after Halcon agreed to sell its 81,000 net acres mostly in Burleson and Brazos counties of East Texas to Hawkwood Energy LLC.
Halcon in September 2016 emerged from its prepackaged Chapter 11 bankruptcy cases, eliminating $1.8 billion in debt (OGJ Online, July 29, 2016).