Halcon – Is that Similar to a Li-ger?
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)