ADoseOfData

Halcon – Is that Similar to a Li-ger?

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Oil production in North Dakota surged by 70 MBpd in October, after steady declines from July 2015 to September 2016. The bump in production surprised many, but is logical given the increase in oil prices that spurred completions of the massive basin DUC inventory. However, more factors are at play here. Halcon Resources (HRC) emerged from bankruptcy in October 2016 and brought wells online that were shut-in during restructuring. In May 2016, HRC’s gross production tumbled 10 Mbpd from April due to cash constraints. Now that the company is back online, its oil production was up nearly 10 MBpd in October to total 38 MBpd. Most of HRC’s production in Dunn County, ND, is gathered by Crestwood (CEQP).

Increased production is good news for CEQP as we expect Q4 volumes on the Arrow System to be up from Q3. This is also somewhat good news for ONEOK (OKS) since it processes the gas supply via a CDP from CEQP’s Arrow System. However, the gas supply increase is only expected to be about 7 MMcf/d. (Tickers: HK, CEQP, OKS)

About The Author Justin Carlson

I have over 10 years of experience in data analysis, research, and consulting across the energy sector. I currently serve as Vice President of Research and Managing Director at East Daley Capital, an energy assets research firm that is changing how investors look at midstream energy risk with an asset-driven information service that combines proprietary research with a trusted team of unbiased, experienced energy analysts. My insights and analysis bring greater transparency to the energy financial market by quantifying potential risks by asset and enabling investors to make more informed and accurate projections and investments. Prior to joining East Daley Capital, I was a senior manager at Platts, a division of McGraw Hill Financial, which acquired Bentek Energy, where I was a senior member of the leadership team.