Halcon Resources Corp. (NYSE: HK) has reduced its 2014 capital spending program and unveiled 2014 divestment program plans.
Halcon is lowering its drilling and completions budget guidance for 2014 by 14% to approximately $950 million, which is inclusive of planned drilling activity in all areas. In addition, the company expects to spend $100 to $125 million in aggregate on leasehold, infrastructure, seismic and other, excluding capitalized interest and G&A. Halcon is reaffirming previously issued 2014 production guidance of 38,000 to 42,000 barrels of oil equivalent per day.
As reported previously, the company is in the process of divesting certain non-core conventional assets in three separate transactions for total proceeds of approximately $300 million, two of which have closed.
Halcon expects the third transaction to close on December 20, 2013. The company plans to continue the portfolio management process and currently expects to divest additional non-core assets in 2014 for total proceeds of approximately $300 to $400 million.
Floyd C. Wilson, chairman and CEO, stated, "We expect to fund our entire 2014 capital budget with a combination of cash flow from operations, borrowings under our revolving credit facility and proceeds from additional non-core asset sales. We are well positioned to deliver significant growth of reserves, production and cash flow while maintaining capital discipline. In addition, we are focused on capital efficiency and intend to achieve higher rates of return across our asset portfolio via a persistent emphasis on technological innovation."