Halcon Webcast, page-25

Haven't sold out yet - but like BBB I really feel like I ought to cut the position - as the company refuses to reasonably update its shareholders IMO.

Just to repost something regarding the HK Webcast - Richard Zeits comment is as follows:

"During the conference call, Halcón provided several interesting data points. The 8 wells brought on production during Q2 had an average 24-hour IP rate of 804 boe/d and an average 30-day IP rate of 620 boe/d. These rates represent a substantial improvement over the first quarter.

In July, El Halcón turned to sales another three wells that had average initial production rate of 1,091 Boe/d (93% oil), a solid improvement over the Q2 average."

So, doublespeak should not be permitted. AKK should not be allowed to say 650 boepd (250 boepd net) without backing it up.


Firstly the obvious being those rates cannot be reached without Stifflemire and 1 more EFS (possibly 2 but that means both would be late in June). So the company should be allowed to simply say that 2 EFS were completed during the Qtr (they aren't saying which ones, when or what rate) and they could just as easily add that a 3rd was put online after Qtr end.

Secondly its also obvious that the "net production" somehow doesn't translate to revenue (oh that's right revenue doesn't flow until after payout). It's true though (I think Rob79 brough this up) that an "asset" is being grown in that there is revenue accruing to HK that is building up the APO amount. So AKK should at least keep its shareholders updated that as at Qtr end the Stifflemire well was xx% of $APO. surely that can't be hidden in the AR accounts - has to show up as an asset IMO.

Thirdly, with 3 carried wells and a 4th contributed WI well drilled, it is important for shareholders to know how much of the acreage JVed with HK is now held by production. That can't be too hard to advise can it?

All of the above could be said without explicit numbers if HK is concerned about confidentiality.

Then of course AKK could also just as easily add the production from Colorado (after all they are the operator and would have filed to reports) and there is nothing super secret about MS so no reason why that production could not be reported either. Likewise KY.

So I will be writing to GG. I think we all should. Prove 250 net boepd to AKK and show how the revenue was calculated. Tell us the well head pricing average by properties and netbacks.

Its not a rant. Its basic information that shareholders want to know (ps check LNR for how it should be done). There is a lot more that should be in the Qtrly too IMO.