Halcon Resources Corp
Analyzing Crude Oil Rigs, Production, and Prices
The US crude oil rig count was 341 for the week ending July 1, 2016. That was 11 more than the previous week, according to data released by Baker Hughes.
Can the Fall in the Dollar Boost Crude Oil?
From June 14–21, 2016, crude oil rose 0.7%, while the US Dollar Index (UUP) fell about 0.96%. The index initially fell after the Fed kept interest rates unchanged on June 15.
Rigs and Production: How Do They Impact Crude Oil Prices?
The US crude oil rig count was 357 for the week ending July 15, 2016—six more than in the previous week, according to data released by Baker Hughes (BHI).
Energy ETFs: What Drove Their Performances?
Among the top energy ETFs, the Energy Select Sector SPDR ETF (XLE) had the highest correlation of 70.4% with US crude oil in the trailing month to June 9, 2016.
Which Upstream Stocks Should You Consider as Oil Nears $50?
On May 27, 2016, US crude oil (USO)(OIIL) closed at $49.33, just 0.47% below its 2016 high of $49.56 on May 25.
Horizontal rig count tapers off after attaining historic high
Horizontal rig counts had been setting and breaking new records before last week’s fall, which marked the third decrease in the past 16 weeks.
Lower US Crude Oil Production Forecasts for 2019
The EIA reported that US crude oil production increased by 100,000 bpd (barrels per day) to a record high of 10.9 MMbpd on June 1–8.
A snapshot of Halcon Resources compared to its peers
Although Halcon’s quality of earnings is among the weakest in the group, its asset turnover ratio and projected earnings growth are in line with its peers.
Horizontal rig count on top again in the US
Horizontal wells increase the length of the well that’s exposed to the reservoir. This increases production. In vertical drilling, a well goes straight down until it reaches the formation.
Crude Prices Fell Again Due to Long-Term Oversupply Concerns
NYMEX-traded WTI crude oil futures for March delivery fell and closed at $29.64 per barrel on February 19. Oil prices fell due to long-term oversupply concerns.
Weakest Upstream Stocks in the Week Ending September 21
Talos Energy, an exploration and production company involved in offshore drilling, was the weakest upstream stock in the week ending September 21.
ConocoPhillips Outperformed Crude Oil: Positive for Its Uptrend
For the week ending October 20, 2017, crude oil (USO) prices rose from $51.45 per barrel to $51.84 per barrel—an increase of 0.76%.
Crude Oil Prices Have Fallen 11% since October 9
December WTI crude oil futures contracts trading in NYMEX fell by 1.4% on Monday, October 26, 2015. Crude oil prices fell for the second day.
Can the US Dollar Index Help WTI Crude Oil Prices?
The US Dollar Index fell ~0.13% to 93.89, and July WTI oil futures rose ~1.2% on June 5.
Crude Oil Prices Fell Again! Renewed Concerns of Rising Supplies
June WTI (West Texas Intermediate) crude oil futures contracts fell 2.5% and closed at $43.65 per barrel yesterday.
North American Oil and Gas Producers’ Debt Rose in 2015
AlixPartners surveyed 134 public companies in the US and Canada. The surveys showed that they had a cumulative long-term debt of more than $353 billion in 2015.
Long Positions Fall in the CFTC’s Commitment of Traders Report
The CFTC’s COT report states that hedge funds reduced their long positions for the week ending January 12, 2016. The net long positions fell by 20,673 contracts to 163,504 contracts during the week.
Will the Crude Oil Supply and Demand Gap Narrow by Early 2017?
The IEA forecast that the global crude oil supply and demand gap would decline to 200,000 bpd in 2H16—compared to 1.5 MMbpd in 1H16.
May Natural Gas Futures Down – Ahead of Inventory Data
Natural gas performance, relative to other commodities, was poor on April 1, 2015. However, the best performer for the day was WTI crude oil.
Why the horizontal rig count broke a record again
For the week ending November 14, 2014, the number of horizontal rigs increased by seven from the previous week’s count. Currently, there are 1,369 horizontal rigs.
Russia and OPEC: Key Bearish Catalysts for 2016
Russia’s energy minister reported that Russia is targeting to produce ~10.9 MMbpd of crude oil in 2016 compared to 10.7 MMbpd in 2015. It’s the highest in 30 years.
Why Halcon Resources’ market outperformance decreased lately
In 2014, Halcon Resources (HK) outperformed the industry and broader market. HK’s stock has returned ~34% year-to-date (or YTD). On an annualized basis, this means a return of ~50%. In comparison, the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has returned ~12% YTD—or ~17% annualized.
Could Cushing Crude Oil Inventories Curb the Drop in Oil Prices?
The EIA (U.S. Energy Information Administration) reported that Cushing crude oil inventories fell by 1.3 MMbbls to 65.2 MMbbls for the week ending June 17 compared to the previous week.
OPEC-Russia Meeting: Will It Stabilize the Crude Oil Market?
On March 14, OPEC’s delegates reported that Russia, Saudi Arabia, Venezuela, and Qatar will meet in Doha in April. The meeting will renew talks to stabilize the oil market.
Why Are Cushing Crude Oil Stocks Crushing Crude Oil Prices?
The EIA reported that Cushing crude oil stocks rose by 523,000 barrels to 64.7 MMbbls for the week ending February 5, 2016—the highest number since April 2004.
Moving Averages: WTI Crude Oil Prices Could Trend Higher
July WTI crude oil futures were trading above their 50-day, 100-day, and 200-day moving averages on May 25.
Horizontal rig count reaches record high
The number of horizontal rigs increased when large quantities of oil and gas in shale formations were discovered in the US. Rig counts can gauge companies’ upstream activity.
Halcon’s market underperformance signals a sedate 2015 outlook
In YTD 2014, Halcon Resources has underperformed in comparison to the industry and the broader market, signaling a sedate 2015 outlook.
US Crude Oil Inventory, Canadian Wildfires Affected Crude Prices
The larger-than-expected rise in US crude oil inventories limited the upside for US crude oil prices despite supply disruptions in Canada.
Horizontal rig count is back on record breaking spree
For the week ending September 26, 2014, the number of horizontal rigs increased by six to 1,347—compared to 1,341 last week. This is the highest horizontal rig count on record.
What’s the Correlation between Crude Oil Inventories and Prices?
US commercial crude oil inventories rose by 2.8 million barrels compared to the previous week.
How Does Seasonality Impact Crude Oil Inventories?
US commercial crude oil inventories fell by around 4.2 MMbbls for the week ending on May 20, 2016—compared to the previous week.
Does Seasonality Impact the Crude Oil Inventory?
US commercial crude oil (USO) (UWTI) inventories fell by 3.4 MMbbls (million barrels) compared to the previous week for the week ending May 6, 2016.
Oil Producing Companies’ Impairment Hit $38 Billion in 3Q15
The EIA (U.S. Energy Information Administration) reported that the fall in crude oil prices led to a massive impairment of assets by oil producing companies.
Oil-Weighted Stocks after Crude Oil’s 2016 High and Low
On February 11, 2016, US crude oil (USL) touched a 12-year low. Between February 11, 2016, and May 9, 2016, US crude oil gained 65.7%.
Crude oil prices may determine future for some shale plays
From August to November, returns on drilling wells in shale plays such as the Eagle Ford dropped from more than 20% to the 15% range.
Why Did USO Outperform UNG from June 16–23?
From June 16–23, 2016, the United States Oil ETF (USO) outperformed the United States Natural Gas ETF (UNG). USO rose 7.5%, and UNG rose 3.9%.
An overview of Halcon Resources’ 3Q14 revenues
Halcon Resources recorded $306.51 million in total revenues for 3Q14, which remained almost unchanged from $305.0 million recorded in 3Q13.
Why investors should monitor last week’s drop in oil rig count
This week’s fall in oil rig count marked the third decrease in the past four weeks, and the highest decrease since August 22’s fall.
Jim Rogers Expects Crude Oil Prices to Bottom in 2015
Crude oil prices lost more than 10% in the last four trading sessions. The collateral damage might continue if demand from China and Europe doesn’t improve.
US oil rigs lose steam after reaching a record high
Last week, the Baker Hughes oil rig count decreased by nine—from 1,601 to 1,592. This marked the first decrease in the past five weeks. Despite the decrease, oil rigs are still close to the record high.
Will Halcon Resources’ strategies pay off?
Halcon Resources implemented hedging strategies to protect from future movements or volatility in commodity prices, which affect its profitability.
Diving into Southwestern Energy’s operating profitability
EBITDA’s widely used in the valuation of companies. And in this regard also, SWN’s EBITDA margin—when scaled by revenues—is strong, holding near ~60% in recent years.
US Tech Companies Face Hong Kong National Security Law
China’s controversial Hong Kong national security law could be a nightmare for US tech companies. Overall, the law would give China more power.
Must-know: Changes in horizontal and vertical rig counts
For the week ending October 31, 2014, the number of horizontal rigs decreased by two from the previous week’s count. Currently, there are 1,353 horizontal rigs.
Why the horizontal rig count is the highest on record
For the week ended October 24, the number of horizontal rigs increased by two to 1,355, the highest horizontal rig count on record.
Why is the breakeven price of crude oil so important?
Knowing the breakeven price of crude oil is important when trying to figure out what OPEC needs in order to regain market share.
Why it’s important to know the crude oil extraction process
Before learning the costs components of crude oil extraction, let’s take a look at how producers extract crude oil from the ground.
How does the production cost of crude oil affect oil prices?
Recent consensus says the production cost of crude oil could range from $20 to $25 per barrel.
Upstream Losses This Week: LGCY, HK, WTI, SN, and XEC
In the week starting July 2, Legacy Reserves (LGCY) decreased from $6.90 to $6.22, a fall of almost 9.9%.
Upstream Gainers This Week: Gulfport Energy Leads
As of June 26, Gulfport Energy (GPOR) had risen ~6.9% from last week’s close of $11.62 to $12.42, above its 50-day and 200-day moving averages of $10.31 and $11.59, respectively.
Russia’s Crude Oil Production and OPEC’s Meeting
Russia’s crude oil output averaged 10.97 MMbpd (million barrels per day) in May. Russia’s crude oil production averaged 11.1 MMbpd in early June.
Analyzing Wall Street’s Targets for HK, XEC, JAG, LPI, and COG
To conclude our series, we’ll discuss analysts’ recommendations for this year’s weakest upstream stocks.
Wall Street Analysts’ Targets for XOG, GPOR, HK, CHK, and QEP
Five analysts gave a “strong buy,” seven analysts gave a “buy,” and three analysts gave a “hold” recommendation on Extraction Oil & Gas.
Halcon Resources’ Normalized Free Cash Flow Fell in 2017
For 2017, Halcon Resources (HK) had a negative normalized FCF of -236%—the third-lowest FCF among the upstream producers in the US.
Gulfport Energy: Poor Normalized Free Cash Flow in 2017
In 2017, Gulfport Energy reported a negative FCF of -$1.8 billion—317% higher compared to Gulfport Energy’s FCF of -$420 million in 2016.
Upstream Companies with the Lowest Free Cash Flow 2017
Extraction Oil & Gas had a normalized 2017 FCF of -345%—followed by Gulfport Energy, Halcon Resources, Chesapeake Energy, and QEP Resources.
Wall Street’s Targets for the Worst-Performing Upstream Stocks
We’ll now look at Wall Street’s recommendations for the worst performers in 2018 from the US oil and gas production, or upstream, sector.
Halcon Resources’ Performance Year-to-Date
Year-to-date in 2018, Halcon Resources (HK) is turning out to be the worst-performing energy stock from the US oil and gas production, or upstream, sector.
Upstream Losers this Week: COG, SRCI, HK, AREX, and BBG
Having looked at the percentage gainers, we’ll now move on to the percentage losers from the oil and gas production—or upstream—sector in the United States this week.
Which Upstream Company Is the Biggest Gainer This Week?
So far this week, Legacy Reserves (LGCY) has risen from its last week’s close of $1.49 to $1.63 on October 10—a significant rise of more than 9%.
Top 5 Upstream Stocks with High and Low Implied Volatilities
On August 5, 2016, Stone Energy (SGY) had the highest implied volatility among the upstream stocks. Its implied volatility was ~355.5%.
Which Energy ETF Tracks Crude Oil Closer?
The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) had the highest correlation of 84.4% with US crude oil between June 21 and July 21, 2016.
Oil Producers Brace for Impact of US Dollar Depreciation
August West Texas Intermediate crude oil futures contracts trading on the NYMEX rose slightly by 0.59% and closed at $45.95 per barrel on July 15, 2016.
Which Energy ETFs Have the Highest Correlation with Oil?
Over the last three months, XOP had the highest correlation of 77.0% with US crude oil.
How Will the Crude Oil Market React to OPEC’s Crude Oil Production?
A Bloomberg survey reported that OPEC’s crude oil production rose by 240,000 bpd to 32.95 MMbpd in June 2016—compared to the previous month.
Why Do Crude Oil and Natural Gas Drive Energy ETFs?
The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) had the highest correlation of 84% with US crude oil in the last month to June 30, 2016.
Nigeria, Canada, OPEC, and Negative Crude Oil Price Drivers
In the previous three parts of this series, we covered bullish catalysts for crude oil prices. Now, let’s look at some important bearish drivers for crude oil prices in 2016.
US On-Highway Diesel Fuel Prices Trade near 2016 Highs
The EIA reported that US on-highway diesel fuel prices fell by 0.4% week-over-week to $2.42 per gallon on June 20. Prices fell for the first time in ten weeks.
Crude Oil Fell almost 8% in the Last 2 Days: Is It the Turning Point?
August West Texas Intermediate crude oil futures contracts fell by ~2.8% and settled at $46.33 per barrel on Monday, June 27, 2016. Prices fell for the second day due to the aftermath of the Brexit vote on June 24.
Why the Rig Count Is Important for Crude Oil
The US oil rig count was 328 for the week ended June 10, 2016, three more than in the previous week, according to data released by Baker Hughes.
Saudi Arabia’s Crude Oil Production Rose in May 2016
A Reuters survey reported that Saudi Arabia’s crude oil production rose by 10,000 barrels per day to 10.3 MMbpd in May 2016—compared to April 2016.
Understanding Halcón Resources’ Balance Sheet Restructuring Plans
All Halcón’s debt junior in seniority to its existing 8.625% second lien notes due 2020 and its 12% second lien notes due 2022 will be eliminated.
The Inside Details of Halcón Resources’ Mounting Debt
As of March 31, 2016, Halcón’s total debt stood at ~$2.88 billion. With only ~$9 million in cash and cash equivalents, its net debt was ~$2.87 billion.
Could US Crude Oil Inventory Rise for 3rd Straight Week?
On April 26, 2016, the API (American Petroleum Institute) released its weekly crude oil inventory report. It showed that US crude oil inventory fell 1.1 MMbbls for the week ended April 22.
How Are Crude Oil Prices Related to the Rig Count?
Over the last ten years, the oil rig count and crude oil price bottoms have been between three to four months apart.
Total US Crude Oil Inventories Hit the Highest Level Ever
On April 27, the EIA released its weekly crude oil inventory report. The US crude oil inventory rose by 2 MMbbls to 540.6 MMbbls between April 15 and April 22.
What Are the Bullish Catalysts for Crude Oil Prices This Week?
The rise in gasoline demand in 2016 compared to 2015 has boosted gasoline prices. Consequently, it boosted crude oil prices.
Why US Crude Oil Production Levels Are Key for Global Oil Market
The EIA reported that the weekly US crude oil production fell by 14,000 bpd (barrels per day) to 9 MMbpd (million barrels per day) for the week ending April 1, 2016.
How Long Will US Crude Oil Production Support Crude Oil Prices?
Monthly US crude oil production peaked at 9.7 MMbpd in April 2015, which was the highest level since the 1970s.
How Long Can Bullish Catalysts Benefit Crude Oil Prices in 2016?
On April 5, 2016, Kuwait’s OPEC governor made bullish comments regarding the crude oil producers’ meeting in Qatar on April 17.
API Crude Oil Inventories Could Add Pressure to Crude Oil Prices
Crude oil inventories are 14% more than the same period in 2015. US crude oil stocks rose by 3.3 MMbbls for the week ending March 25.
API Crude Oil Inventory: Is It Time for Crude Oil Price Correction?
On March 22, 2016, the API estimated that the US crude oil inventory rose by 8.8 MMbbls (million barrels) for the week ending March 18, 2016, compared with the previous week.
Bull Market: Crude Oil Prices Trade at 2016 Highs
Crude oil supply outages in Iraq and Nigeria have been boosting crude oil prices in March 2016. Supply outages increased by 0.25 MMbpd in March.
Crude Oil Prices Have Rallied almost 40% in the Past Month
The recent uptick in crude oil prices benefits crude oil producers like Halcón Resources (HK), Hess (HES), Sanchez Energy (SN), Energy XXI (EXXI), and Goodrich Petroleum (GDP).
Why OPEC’s Crude Oil Production Fell in February 2016
OPEC’s (Organization of the Petroleum Exporting Countries) crude oil production fell by 79,000 bpd (barrels per day) to 33.1 MMbpd (million barrels per day) in February 2016 compared to January 2016.
WTI and Brent Crude Oil Prices Fall Due to the Rising Dollar
WTI (West Texas Intermediate) crude oil futures contracts for April delivery fell 0.88% and settled at $32.78 per barrel on Friday, February 26, 2016.
Did the Distillate Inventory Diverge from Crude Oil Prices?
On February 24, 2016, the EIA (U.S. Energy Information Administration) reported that the US distillate inventory fell by 1.7 MMbbls (million barrels) to 160.7 MMbbls for the week ending February 19, 2016.
Double Bottom Pattern: Crude Oil Prices Could Trend Higher
Crude oil prices fell below the key psychological mark of $30 per barrel on February 19. The double bottom pattern suggests that crude oil prices could trend higher.
API Crude Oil Inventory: Up, Up, Up, and Up Again
On February 9, 2016, the API published its weekly crude oil inventory report. API crude oil inventory rose for the fourth straight week.
Lower Investments in Oil and Exploration: Implications?
US investments in mining and exploration fell by 35% in 2015. Barclays estimates that investments will fall by 15% in 2016. It fell by 23% in 2015.
Flat US Crude Oil Production Puts Pressure on Crude Oil Prices
The EIA (U.S. Energy Information Administration) reported that US crude oil production fell marginally by 14,000 bpd (barrels per day) to 9.2 MMbpd (million barrels per day) for the week ending January 22, 2016.
WTI Crude Oil Prices Rose after EIA Report
Crude oil prices have gained ~6.4% within the last two days, ignoring the gasoline and crude oil inventory builds.
Will the EIA’s Petroleum Status Report Reflect Crude Inventory?
The API released its crude oil inventory report on January 26. It reported that the US crude oil inventories rose by 11.4 MMbbls for the week ending January 22.
US Crude Oil Production Could Be a Game Changer in 2016
The US crude oil production rose due to technological advancement, higher crude oil prices between 2010–2014, and cheaper credit facilities in 2015.
Could Bargain Hunting Support Crude Oil Prices?
Lower oil prices and bargain hunting could boost oil prices. The next resistance level is $40 per barrel. Prices tested this level in November 2015.
Sales Performance of XOP Companies by Production Mix
The sales of XOP upstream companies operating with a production mix of crude oil greater than 90% fell by 9% on a YoY (year-over-year) basis in 3Q15.
US Oil and Gas Companies’ Debt Exceeds $200 Billion
US oil and gas exploration and production companies are under severe pressure.
What Were OPEC Policies during Previous Crude Oil Crashes?
During the 1985-86 crude oil crash, OPEC (Organization of Petroleum Exporting Countries) decided to defend its market share by pumping more oil.
Commodity Meltdown: 19 Oil and Gas Companies in Bankruptcy
The net debt of US oil and gas exploration and production companies increased from $81 billion in 2010 to $169 billion by 1H15. The main reason is the catastrophic fall in crude oil prices.