The Energy Report
Source: John M. White, ROTH Capital Partners 07/12/2017
The Williston Basin assets of this energy company have been sold for $1.4 billion.
John M. White, analyst with ROTH Capital Partners, commented in a July 11 company update on Halcón Resources Corp.’s (HK:NASDAQ) sale of its operated Williston Basin assets for $1.4 billion to Bruin E&P Partners and on its plans to reduce its debt by $1.2 billion.
White noted that current production associated with the assets being sold is about “29,000 BOE per day. The sale is conditioned upon the receipt of consent from greater than 50.0% of the holders of HK’s 6.75% unsecured notes due 2025 to amend certain provisions of the indenture governing the 6.75% Notes. On July 10, 2017 HK obtained commitments to provide the Consent from greater than 50% of the 6.75% Noteholders.”
White also noted that the sale requires shareholder approval and on July 11, “HK received commitments to support the asset sale from holders of greater than 50% of its common stock.”
Part of the proceeds will be used to purchase up to 50% of Halcon’s 6.5% notes at 103% of par. White also stated that Halcón will use part of the proceeds to “redeem all outstanding 12.0% Second Lien Notes due 2022.”
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According to White, Halcón plans to “run two rigs in the Delaware Basin for the remainder of 2017 and currently expects to exit 2017 with production in excess of 13,000 BOE per day.”
ROTH’s valuation of Halcón is currently $14/share. The company is trading at around $6.75/share.
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Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, securities of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
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3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.
White noted that current production associated with the assets being sold is about 29,000 BOE per day. The sale is conditioned upon the receipt of consent from greater than 50.0% of the holders of HK's 6.75% unsecured notes due 2025 to amend certain provisions of the indenture governing the 6.75% Notes. On July 10, 2017 HK obtained commitments to provide the Consent from greater than 50% of the 6.75% Noteholders.
White also noted that the sale requires shareholder approval and on July 11, HK received commitments to support the asset sale from holders of greater than 50% of its common stock.
Part of the proceeds will be used to purchase up to 50% of Halcon's 6.5% notes at 103% of par. White also stated that Halcón will use part of the proceeds to redeem all outstanding 12.0% Second Lien Notes due 2022.
According to White, Halcón plans to run two rigs in the Delaware Basin for the remainder of 2017 and currently expects to exit 2017 with production in excess of 13,000 BOE per day.
ROTH's valuation of Halcón is currently $14/share. The company is trading at around $6.75/share.
Want to read more Energy Report articles like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent articles with industry analysts and commentators, visit our Streetwise Articles page.
Disclosure: 1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, securities of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. 4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. "}
Additional Disclosures for this Content
ROTH Capital Partners, Halcón Resources Corp., Flash Note, July 11, 2017
Regulation Analyst Certification (“Reg AC”): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
ROTH makes a market in shares of Halcón Resources Corporation and as such, buys and sells from customers on a principal basis.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.