Halcon Resources buys Petro-Hunt Williston Basin assets for $1.45 billion

Houston (Platts)--22 Oct 2012 159 pm EDT/1759 GMT

Halcon Resources is buying undeveloped oil and gas assets in the Williston Basin from Petro-Hunt, in a $1.45 billion deal, Halcon said Monday.

The assets include 81,000 net acres prospective for the Bakken Shale and the Three Forks formation in the North Dakota counties of Williams, Mountrail, McKenzie and Dunn, Houston-based Halcon said in a statement.

Article continues below...

Request a free trial of: Oilgram News Oilgram News
Oilgram News

Oilgram News brings fast-breaking global petroleum and gas news to your desktop every day. Our extensive global network of correspondents report on supply and demand trends, corporate news, government actions, exploration, technology, and much more.

Request a trial to Oilgram News Request More Information

There are five operated drilling rigs now running on the properties.

The current average net production from these assets is more than 10,500 boe/day, Halcon said. Total proved reserves, as estimated by third party reserve engineers, are about 42.4 million boe, the company said.

Floyd Wilson, Halcon's chairman and CEO, said the purchase "is consistent with our strategy of building an oil company with a multi-year drilling inventory in several liquids-rich basins."

"The assets we are acquiring are located in what is arguably the most attractive oil producing basin in the lower 48, on a risk adjusted basis," he added.

Wilson also said the transaction will improve the company's leverage profile and increase its estimated proved reserves on a pro forma basis by over 58% to about 115 million boe, 79% of which is liquids.

The $1.45 billion purchase will consist of $700 million in cash and $750 million in equity, Halcon said.

The company also announced that Canada Pension Plan Investment Board will buy $300 million of Halcon's common stock at $7.16 per share, subject to customary closing conditions and the successful closing of the acquisition of the Williston Basin assets.

According to Imperial Capital in a later note on the deal, the Williston Basin assets "were acquired at an attractive valuation."

Based on Imperial's calculation, the transaction implies a valuation of $34.20 per proved boe, $138,095/flowing boe of production and $7,531/acre.

--Eunice Bridges, eunice_bridges@platts.com
--Edited by Richard Rubin, richard_rubin@platts.com

Copyright © 2016 S&P Global Platts, a division of S&P Global. All rights reserved.