Halcón Resources Plunge 9% As Q3 Results Miss Estimates

(RTTNews) - Shares of Halcon Resources Corp. (HK) plunged nearly nine percent in extended trading on Monday after the independent oil and gas company reported results for the third quarter that missed analysts' expectations.

However, the company reported a profit for the quarter compared to a loss last year, reflecting significantly lower operating expenses.

"We had another solid quarter in both of our core plays and announced our preliminary outlook for 2015 today. That outlook is driven by our view that the service cost side of our business is out-of-sync with crude oil prices," Chairman and CEO Floyd Wilson said in a statement.

The Houston, Texas-based independent energy company reported net income of $186.85 million or $0.36 per share for the third quarter, compared to a net loss of $859.90 million or $2.19 per share for the prior-year quarter.

Excluding items, adjusted net income for the latest quarter was $10.87 million or $0.03 per share. On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $0.05 per share for the quarter. Analysts' estimates typically exclude special items.

Total operating revenues for the quarter grew to $306.51 million from $305.01 million in the same quarter last year, but missed fourteen Wall Street analysts' consensus estimate of $317.69 million.

Production for the quarter increased 16 percent to an average of 43,554 barrels of oil equivalent per day (Boe/d) from last year, with 82 percent oil, 8 percent natural gas liquids (NGLs) and 10 percent natural gas.

Average prices realized price declined 13 percent to $76.46 per Boe, and total operating costs per unit decreased 17 percent to $24.81 per Boe from last year.

Total operating expenses for the quarter was $235.01 million, sharply lower than $1.45 billion last year, which primarily included $909 million of full cost ceiling impairment and goodwill impairment of $229 million.

Looking ahead to fiscal 2014, Halcón is currently operating eight rigs across its holdings and expects to deliver annual production towards the high end of the previously disclosed production guidance range of 40 to 42 MBoe/d.

For fiscal 2015, the company expects to operate six rigs, five rigs less than originally planned, in response to lower oil prices. However, the company expects pro forma production growth of 15 to 20 percent, with reduced drilling & completion budget of $750 million to $800 million.

"While we are substantially hedged through 2015 and into 2016, we believe that the precipitous drop in crude prices calls for conservatism. We will remain flexible and are prepared to adjust our 2015 capital program as future events dictate," Wilson added.

HK closed Monday's regular trading session at $3.25, up $0.01 or 0.31% on a volume of 8.62 million shares. However, the stock plunged $0.28 or 8.62% in after-hours trading.