Halcón Resources Corporation plans to slash spending and cut rigs next year as crude prices continue to tumble, sending some of the strongest signals so far that plummeting oil prices are taking their toll on small, independent exploration and production companies.
Although Halcón posted a $186.9 million profit and saw production surge 16 percent in the third quarter, the Houston-based independent oil and gas company said falling oil prices necessitate a more conservative approach in 2015.
“The service cost side of our business is out-of-sync with crude oil prices,” CEO Floyd C. Wilson said in a statement. “As a result, we are electing to reduce spending next year while still preserving our ability to grow production.”
The company plans to cut its capital expenditures from more than $1.1 billion this year to $750 to $800 million next year, Halcón said in a release of its third-quarter earnings. The firm also said it will pull back on the number of rigs it plans to operate next year from 11 to six, down from the eight Halcón is currently operating.
Despite the spending cuts, Halcón still expects to pump more oil next year, thanks to its drilling program in the Williston Basin in the Bakken/Three Forks shale and the El Halcón in the East Texas Eagle Ford region.
The company projected a 15 to 20 percent increase in production in 2015.
Halcón executives will discuss the earnings with investors in a conference call Tuesday morning.
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