The Halcon Plan
I had a nice discussion with someone active in the Bakken play during a similar time period as what we are in now...and beyond.
He shared some history of that play and some insights he had into the Tuscaloosa Marine Shale. Fascinating stuff.
I shared observations I had, particularly about Halcon. He made no comment, but didn't disagree.
So, I thought I would share it with you and get your thoughts.
Halcon is seemingly following the history of its founders, which isn't necessarily a bad thing for the TMS. Only the future will tell us if it will be good or bad. But, I think it is fair to at least throw the observation out there.
Floyd Wilson, CEO of Halcon, has a long history of building up a company and then selling it. The Tuscaloosa Marine Shale appears to be the center piece of that, most likely, last rodeo for this colorful oil shale maverick.
Listening to Halcon management during their last couple of presentations and keeping the history in mind, here is what I perceive the company and TMS plan to be.
1. Drill and hold as much acreage as an operator as they can as quickly as they can.
2. Figure out how to drill the TMS profitably along the way.
3. Set up multiple markets for the oil via the Natchez terminal.
4. Set up smooth operating capabilities within the play...the 3 planned mini-terminals will accomplish this goal quite nicely...they will likely be able to utilize gas produced via these terminals.
5. After drilling roughly 100 wells, Halcon will hold roughly 200,000 acres of land by production and have roughly 900 wells capable of being drilled and produced as profitably as is possible in our little part of the world.
6. Sell the company at a nice profit and ride off into the sunset.
Others may disagree, but this is what I see.
Let's listen in to Floyd Wilson's presentation scheduled for next Wednesday with this observation in mind and see if anything fits. Here is the link to the Halcon news release about the scheduled presentation.