Pin Oak Zigs to North Utica as Everyone Else Zags to South Utica

Pin Oak Energy Partners is an interesting company. As we reported in early February, the company recently closed on several deals to acquire 70,000 Utica acres in both Ohio and Pennsylvania, adding to its portfolio (see Pin Oak Energy Buys 70K Utica Acres in OH & PA + Pipeline Assets). The new acreage (and producing well assets) is located in Mahoning and Trumbull counties in Ohio, and Mercer County in Pennsylvania. The amount of the transaction was not disclosed. Neither were the names of the sellers. However, we now have a pretty good idea of who did the selling: Halcon Resources and BP. We have some new insights into the thinking and strategy of Pin Oak by zigging (concentrating on the northern Utica) when it seems everyone else is zagging–abandoning the northern tier for the better-yielding southern Utica…
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Halcon Resources Exits Bankruptcy in Just 1.5 Months

Halcon ResourcesGetting a pre-packaged bankruptcy today is like ordering a McDonalds Happy Meal–just order and drive up to the window and pick it up. Simple. In July Halcon Resources, a Utica Shale driller that “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play (in Ohio) and currently doesn’t drill on any of that acreage, filed for a pre-packaged bankruptcy (see Halcon Resources Files for “Pre-Packaged” Bankruptcy). Less than a month and a half after first filing, Halcon has emerged from bankruptcy court with $1.8 billion worth of debt magically erased. When Halcon filed back in July, they listed $3.12 billion in debt and $2.85 billion in assets. In August the company’s market capitalization, calculated as the number of outstanding shares of stock times the per share price, otherwise know as the company’s “worth” or “value”–was under $50 million (see Halcon’s Market Cap Falls Below $50M, NYSE Threatens to De-List). When debtors have no other choice than to accept a plan turning their debt into equity (shares of stock), it doesn’t take long to file the paperwork and be on your way. Here’s Halcon’s news that they now live again to fight another day–just not in the Utica…
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Halcon’s Market Cap Falls Below $50M, NYSE Threatens to De-List

Halcon ResourcesThe New York Stock Exchange (NYSE) has certain minimum standards if a company wants to continue trading stocks on the exchange: The company’s stock price must be trading for at least $1 per share, and the company’s market capitalization must be at least $50 million. Market cap is pretty easy to calculate: it’s the number of outstanding shares times the per-share price. If you have 50 million shares of stock and the price is trading for $1/share, you’re there. You meet the NYSE’s requirements. Various companies with operations in the Marcellus/Utica have fallen short and have been warned by the NYSE that unless they get their act together, they would be de-listed. Some turned it around (see Eclipse Resources Dodges a Bullet – Stock Won’t Get De-Listed), and some didn’t (see Magnum Hunter De-Listed from NYSE; Still Shopping Eureka Hunter). Halcon Resources, a driller with 140,000 Utica acres it doesn’t bother to drill on, was warned in June by the NYSE that their share price, trading under $1/share, is too low (see NYSE Threatens Halcon Resources with De-Listing of Stock). In July Halcon filed for bankruptcy (see Halcon Resources Files for “Pre-Packaged” Bankruptcy). The NYSE has just issued another warning to Halcon: the company’s market capitalization has now fallen below $50 million…
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Halcón Resources 2Q16: Still No Utica Drilling, Focused on ND

Halcon ResourcesLast week Halcon Resources, a Utica Shale driller that “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play (in Ohio) and currently doesn’t drill on any of that acreage, filed for bankruptcy (see Halcon Resources Files for “Pre-Packaged” Bankruptcy). On the heels of their bankruptcy filing, the company released an update for second quarter 2016. These days Halcon concentrates their efforts on oil drilling in the mighty North Dakota Bakken Shale play, where they currently operate a single rig. Here’s the latest on the latest driller to go bankrupt…
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Halcon Resources Files for “Pre-Packaged” Bankruptcy

Halcon ResourcesOn Monday MDN brought you the news that Halcon Resources, a Utica Shale driller that “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play (in Ohio) and currently doesn’t drill on any of that acreage, had gotten buy-in from most of the people to whom it owes $1.8 billion to turn that debt into ownership in the company (see Halcon Gets Majority Buy-in for “Pre-Packaged” Bankruptcy). What we didn’t know is that Halcon actually has $3.12 billion in debt–far more than they previously (publicly) acknowledged. We know that because yesterday Halcon filed their pre-packaged bankruptcy plan in Delaware federal bankruptcy court. The filing (copy below) lists $3.12 billion in debt and $2.85 billion in assets. Although the plan calls for existing shareholders to be issued new stock in the company, the reality is that those who were previously debtholders (not owners) will become the new owners, while existing shareholders’ new stock will be worth toilet paper…
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Halcon Gets Majority Buy-in for “Pre-Packaged” Bankruptcy

Halcon ResourcesMDN told you in May that Halcon Resources, a Utica Shale driller that “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play (in Ohio) and currently doesn’t drill on any of that acreage, was preparing to file for bankruptcy (see Another One Bites the Dust: Halcon Resources Filing for Bankruptcy). In June Halcon outlined how they will go about filing–converting some $1.8 billion of debt into shares of stock/ownership in the company (see Halcon Resources Strikes Deal to File Chapter 11 Bankruptcy). It’s called a “pre-packaged bankruptcy” because the company gets all of the debtholders to agree before the plan is filed. Stockholders (i.e. owners) on the other hand, get screwed. Their stocks become worthless at the end of the process. On Friday Halcon issued a statement outlining their progress. They now have enough debtholders signed up to move forward with filing the pre-packaged bankruptcy…
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Halcon Resources Strikes Deal to File Chapter 11 Bankruptcy

Halcon ResourcesAs MDN told you in May, Halcon Resources, a Utica Shale driller that “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play (in Ohio) and currently doesn’t drill on any of that acreage, is preparing to file for bankruptcy (see Another One Bites the Dust: Halcon Resources Filing for Bankruptcy). The company is still preparing. On Friday Halcon outlined how they will go about filing–converting some $1.8 billion of debt into shares of stock/ownership in the company. Here are the specifics of how Halcon will file in the near future, the agreements they have and still seek to reach with existing debtholders…
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NYSE Threatens Halcon Resources with De-Listing of Stock

Halcon ResourcesThe bad news just keeps coming for Halcon Resources, a driller that “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play (in Ohio) and currently doesn’t drill on any of its Utica acreage. Earlier this month we reported that Halcon has cut a deal to file for bankruptcy (see Another One Bites the Dust: Halcon Resources Filing for Bankruptcy). In January the company quit paying dividends on its preferred stock (see Halcon Resources Suspends Dividend Payments for Preferred Stock). Last December, in a bid to keep the price of the stock from slipping below $1 per share, Halcon did a 1-for-5 reverse stock split, combining 5 shares into a single share (see Halcon Resources Announces 1-for-5 Stock Split to Avoid De-Listing). Oops. That strategy didn’t work out so well. Halcon has just received notice from the New York Stock Exchange that unless the company can get the share price above $1 for 30 consecutive days, the stock will be de-listed from the NYSE…
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Another One Bites the Dust: Halcon Resources Filing for Bankruptcy

Halcon ResourcesFloyd Wilson, CEO of driller Halcon Resources, is a plainspoken kind of guy. Halcon “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play (in Ohio) and currently doesn’t drill in any of that acreage. Their less-than-stellar acreage led Wilson to comment, in colorful language, that the company would no longer drill any “substandard” (our word) Utica wells (see Halcon CEO Says No More S***** Wells in Northern OH Utica). In early 2015 when asked by an analyst about the company’s plans for the Utica, Wilson quipped “What’s the Utica?” (see Halcon CEO Floyd Wilson: “What’s the Utica?”). So we found it interesting that Wilson, so outspoken, was uncharacteristically silent when the company announced it would “take one prepackaged bankruptcy to go.” On Wednesday Halcon announced that like Seventy Seven Energy, they’ve worked out a deal with current debtholders into stockholders, shafting current stockholders in the process. In the announcement we read a lot about restructuring–but the word “bankruptcy” appears just once…
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Halcon Update on “Charting a New Course” – I Feel Good!

In March MDN reported Halcon Resources had hired a prominent law firm with a specialty in bankruptcies to assist the company to “chart a course” through the current downturn in gas and oil prices (see Halcon Resources Hires Bankruptcy Law Firm to Help “Chart Course”). Yesterday Halcon issued an update on their progress. According to the update, the company is “in discussions” with “certain stakeholders” to negotiate terms of a “potential transaction” to “materially reduce the Company’s indebtedness.” What does all of that coded language mean? You would think the company whose CEO is famous for his blunt language would just spit it out (see Halcon CEO Says No More S***** Wells in Northern OH Utica). We’re left to wonder…
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Halcon Resources Hires Bankruptcy Law Firm to Help “Chart Course”

Halcon ResourcesHalcon Resources is a driller that “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play (in Ohio) and currently doesn’t drill in any of that acreage. In January the company suspended paying dividends (see Halcon Resources Suspends Dividend Payments for Preferred Stock). In February the company issued an “everything is OK, honest” statement, to calm investors’ fears (see Halcon Tries to Calm Jittery Investors with “Everything is OK” Statement). At that time the stock was trading for 42 cents per share. Perhaps it worked. Halcon’s stock, as of this morning, was trading at $1.08 per share. Is it enough? Yesterday Halcon announced they’ve hired PJT Partners as financial advisors and Weil, Gotshal & Manges, LLP as legal advisors “to assist the Company as it charts a course through this downturn.” Both firms have been added to the board of directors. We checked, and the law firm claims it is “the go-to bankruptcy firm.” Hmmm. Is that an indication of things to come?…
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Halcon Resources Suspends Dividend Payments for Preferred Stock

Halcon Resources is a driller that “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play and currently doesn’t drill in any of that acreage. Halcon is one of the one of eight Marcellus/Utica companies on David Fessler’s “Oil Company Death List” (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). In November 2013 Halcon’s colorful CEO, Floyd Wilson, said he wouldn’t drill any more, ahem, crappy wells in the Utica (see Halcon CEO Says No More S***** Wells in Northern OH Utica). On an analyst call in early 2015 Wilson quipped “What’s the Utica?” in response to a question from an analyst (see Halcon CEO Floyd Wilson: “What’s the Utica?”). In August 2015 the New York Stock Exchange sent a letter threatening to de-list the stock (see Halcon Resources Put on Notice by NYSE; Refi Debt at Higher Rate). A company must maintain at least a $1/share price in order to continue trading on the NYSE. Yesterday Halcon’s common stock traded at 43.3 cents/share. Oops. So it will be no surprise that Halcon, like several other northeast drillers, has decided to suspend paying dividends on their preferred stock…
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Halcon Resources Announces 1-for-5 Stock Split to Avoid De-Listing

Halcon Resources is a driller that “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play and currently doesn’t drill in any of that acreage. Halcon is one of the one of eight Marcellus/Utica companies on David Fessler’s “Oil Company Death List” (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). As an interesting aside, the “Death List” also includes Marcellus/Utica driller Magnum Hunter, a company filing for bankruptcy earlier this week (see Sad Day: Magnum Hunter Files for Chapter 11 Bankruptcy). In August Halcon refinanced $1 billion worth of outstanding IOUs with a third lien, paying a 13% interest rate on debts that had been 8.875% to 9.75%, and in November Halcon offered second liens for certain other IOUs, offering a new interest rate of 12% for debts that previously had rates of 8.875% to 9.75%. Halcon’s latest move came yesterday when the company announced a reverse stock split in which they will combine five shares into one share effective Jan. 5. What’s a reverse split and what does it mean?…
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Halcon Resources Refinances More IOUs at High Interest Rate

Halcon Resources, a company that “guessed wrong” by leasing 140,000 Utica Shale acres in the northern part of the play and currently doesn’t drill in any of that acreage, is one of the eight Marcellus/Utica companies on David Fessler’s “Oil Company Death List” (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). In August, Halcon refinanced $1 billion worth of outstanding IOUs with a third lien, paying a 13% interest rate on debts that had been 8.875% to 9.75% (see Halcon Resources Put on Notice by NYSE; Refi Debt at Higher Rate). Yesterday Halcon launched yet another offer–this time offering second liens for IOUs. The new interest rate offered is 12% for debts that previously had rates of 8.875% to 9.75%. We don’t pretend to understand high finance, but why would anyone, in these market conditions, purchase a second or third lien IOU? That means one or two other people are in line before you to collect money if the company defaults and can’t repay the IOUs, which seems like all too real a possibility…
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Halcon Resources Put on Notice by NYSE; Refi Debt at Higher Rate

trouble ahead signHalcon Resources, with with some 140,000 net acres in the Ohio Utica Shale, said in January they would not do any Utica drilling in 2015 (see Halcon Resources: Slashes Drilling Budget 50%, No Utica for 2015). In February on an analyst call, Halcon’s colorful CEO, Floyd Wilson, responded to a question from one of the analysts asking about the company’s Utica program by responding with a wisecrack (see Halcon CEO Floyd Wilson: “What’s the Utica?”). Halcon guessed wrong about the Utica and leased acreage in the northern part of the play where production is not as great. Also in February, Halcon appeared on David Fessler’s oil and gas company “death list” of companies that a debt ratio of 4 times or higher earnings (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). Halcon issued a press release yesterday to say: (a) they’ve refinanced $1.02 billion worth of outstanding IOUs with a third lien, forced to pay 13% interest on notes that previously had interest rates ranging from 8.875% to 9.75%; and (b) Halcon has been put on notice by the New York Stock Exchange that because the company’s stock has slipped below $1 per share, they are in danger of being de-listed by the exchange. That is, Halcon’s stock will have to trade on the Pink Sheets as a penny stock unless they can, in the next few months, get the average per share price above $1 again…
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