Reinforces some of what I've been saying (repeatedly). Bolding is me
Halcón's production volumes in the Eagle Ford (no different from any other resource play with high initial well declines) is a function of the number of well completions during each specific period. Therefore, a lack of growth should not be interpreted as operating weakness, as long as individual well performance is strong.
What is driving this noticeable slowdown in Halcón's completions schedule in the Eagle Ford? In part, it reflects the timing of completions that I just discussed. However, I also see a reduction in the pace of capital spending in El Halcón, which, in my opinion, should not be surprising. Halcón's drilling activity in the Ealge Ford is still HBP-driven. As long as the company feels comfortable about being on track to meet its lease retention goals, the Forth Berthold area in the Bakken - Halcón's highest-return asset - will likely be the priority in capital allocation.
August appears to be another slow month in terms of the number of new wells turned to sales. My review indicates that only two new wells, the Redbud 1H and Manta 1H, contributed to the August volumes, after four tie-ins during the month of July.
In terms of well performance in the Eagle Ford, Halcón's results remain consistent and, on average, are slowly improving. The company added several strong wells in the past several months. The Keystone #1H (~69 Mbo in 5 months), J.B. Ranch #1H (43 Mbo in 2 months), and Wilco Unit #1H (41 Mbo in 2 months) are performing far above the average.
