Halcón Resources Corporation (NYSE:HK) (“Halcón” or the “Company”) today announced it has entered into an agreement to sell its remaining non-operated assets in the Williston Basin to a private company for approximately $104 million in cash, subject to customary closing conditions and adjustments. The effective date of the transaction is April 1, 2017 and is expected to close within 60 days. These properties currently produce approximately 1,891 Bbl/d of oil, 1,931 Mcf/d of gas and 65 Bbl/d of natural gas liquids. Separately, in August the Company closed on a ~$6 million cash sale of additional non-operated Williston Basin assets to a different party.
The borrowing base on Halcón’s senior secured revolving credit facility will be reduced to $100 million upon closing of the non-operated asset sale. As indicated in the table below, as of June 30, 2017, Halcón’s liquidity was approximately $773 million pro forma for these asset sales and other previously announced transactions.
|Williston Basin||HY Debt &|| Non-Core
||Williston Basin||Exercise of the|
|Face Value||Actual HK||(Operated Assets)||100% of 2L Notes||Asset
||(Non-Op Assets)||Monument Draw||Adjusted HK|
|Capitalization ($MM)||6/30/2017||Sale (1)||Repayment (1)(2)||Sales
||Sales (3)||North Option||6/30/2017|
|Cash & Cash Equivalents||$||0||$||1,400||$||(745||)||$||20||$||109||$||(108||)||$||676|
|Senior Secured Revolving Credit Facility||153||(153||)||–|
|12.000% Senior Secured Second Lien Notes due 2022||113||(113||)||–|
|6.75% Senior Unsecured Notes due 2025||850||(425||)||425|
|Total Net Debt / (Cash)||$||1,116||$||(251||)|
|Less: Letters of Credit||(6||)||3||(3||)|
|Note: $477 MM adjustment to Stockholders’ Equity reflects estimated gain on sale of Williston Basin operated assets.|
|(1) Impact of legal fees, advisory fees and cash taxes are not included in table.|
|(2) Assumes 50% of 6.75% Senior Unsecured Notes outstanding are redeemed at 103% pursuant to the terms of the amended indenture.|
|Assumes 100% of 12.0% Senior Secured Second Lien Notes outstanding are redeemed, including related prepayment premiums.|
|(3) Remaining ~$104 MM of the Williston Basin Non-Op Sales is expected to close in Q4 ’17.|
Upon the closing the sale of the non-operated assets in the Williston Basin, Halcón will have completed its transition into a pure play Delaware Basin focused company. In less than nine months, the Company has sold approximately 2,000 wellbores across its legacy assets for aggregate cash proceeds in excess of $2 billion. With over 41,500 net acres in the core of the Delaware Basin and strong liquidity, Halcón is well positioned for significant growth going forward.