Halcon Rig Leaving - Alternate Explanation
Several days ago I reported the rumor that Halcon was likely transferring a rig out of the TMS, but may be returning the rig back in 2015, pending results of its latest TMS wells.
Here is a link to that original post:
Multiple sources have assured me this rig move is very likely to occur, but I have been offered an alternate explanation to why the rig is moving by a couple of folks and believe this alternate explanation is worth repeating.
The original reason for the move offered was that Halcon was not pleased with its production numbers on recent wells and simply wanted to back off a little on the TMS while it reassessed things and waited to see how completed wells performed. This theory, coupled with lay-offs of landmen and other supporting information, made enough sense for me to report it.
However, while the production numbers on Halcon's last two wells may have been poor, we don't really know until an official report is made, and the fact is that 2 wells (George Martens, et. al. and Shuckrow) have not even been fractured, yet, much less started flowing back, so there was no way to know how good these wells would be.
The move seemed a bit premature under the circumstances. (As did the land men lay-offs, for that matter.)
So, the alternate explanation bears consideration.
The alternate explanation is that Halcon has simply overspent its budget for 2014 in the TMS and has room to spend more in another play. Consequently, the move is a matter of keeping the company spending in line with the plans reported to shareholders.
IF this last theory proves to be true, then I would expect Halcon to actually hit the ground running in 2015 with MORE rigs rather than less.
We shall see. Stay tuned!