Luke Johnson 08 January 2015 21:58 GMT
US independent Halcon Resources will further cut its capital expenditure budget for 2015 and trim its rig count amid unrelenting pressure from paltry oil prices.
The Houston-based company now plans to spend between $375 million and $425 million on drilling and completions this year. That is a sharp reduction from plans announced in November to spend between $750 to $800 million on those activities in 2015.
"Although we are significantly hedged, the continued weakness in crude oil prices, combined with elevated service costs, calls for conservative planning," said chief executive Floyd Wilson. "Our plan is to deploy capital to assets where results indicate EURs and initial production rates higher than our published type curves."
Halcon will put most of that money towards development of the Fort Berthold area in the Williston Basin and the El Halcon play in East Texas. Another $20 million is earmarked for spending on leasehold, infrastructure, seismic needs.
The company said last year that it would halt spending on its operated properties in the emerging Tuscaloosa Marine shale, where Halcon holds some 300,000 acres. That is one of the US shale plays seen as least viable in a low-oil price environment.
Halcon plans to operate an average of two rigs in Fort Berthold and one in El Halcon in 2015. It had previously budgeted for six rigs for the year.
The company said it "does not anticipate any meaningful lease expirations despite this reduced rig count".
Expected production for the year is pegged at an average of between 40,000 and 45,000 barrels of oil equivalent per day.
Wilson also said that the company expects to see costs "come down dramatically" in 2015.
US independent Halcon Resources will further cut its capital expenditure budget for 2015 and trim its rig count amid unrelenting pressure from paltry oil prices.
The Houston-based company now plans to spend between $375 million and $425 million on drilling and completions this year. That is a sharp reduction from plans announced in November to spend between $750 to $800 million on those activities in 2015.
"Although we are significantly hedged, the continued weakness in crude oil prices, combined with elevated service costs, calls for conservative planning," said chief executive Floyd Wilson. "Our plan is to deploy capital to assets where results indicate EURs and initial production rates higher than our published type curves."
Halcon will put most of that money towards development of the Fort Berthold area in the Williston Basin and the El Halcon play in East Texas. Another $20 million is earmarked for spending on leasehold, infrastructure, seismic needs.
The company said last year that it would halt spending on its operated properties in the emerging Tuscaloosa Marine shale, where Halcon holds some 300,000 acres. That is one of the US shale plays seen as least viable in a low-oil price environment.
Halcon plans to operate an average of two rigs in Fort Berthold and one in El Halcon in 2015. It had previously budgeted for six rigs for the year.
The company said it "does not anticipate any meaningful lease expirations despite this reduced rig count".
Expected production for the year is pegged at an average of between 40,000 and 45,000 barrels of oil equivalent per day.
Wilson also said that the company expects to see costs "come down dramatically" in 2015.
