ZAR: HK sells its North Dakota assets for CAD$62,500/boepdI posted OXY's and DNR's recent deals in the Williston Basin on this bullboard a few weeks ago. I did this because ZAR has low decline, oil-weighted (95%+ light oil), producing properties in North Dakota. And based on the key metrics for OXY's and DNR's recent deals in North Dakota, ZAR can sell its North Dakota oily assets at a fair price to collect at least CAD$15 million and reduce its net debt (held in debentures that mature in 2019) at just CAD$20 million.
Halcon (HK) announced yesterday another oily deal in North Dakota. Although HK is a highly leveraged producer with limited negotiating power and its North Dakota oily assets are UNCONVENTIONAL with HIGH decline rates, HK managed to sell them for US$48,200 per boepd or CAD$62,500 per boepd, see below:
Halcn Resources Announces the Sale of its Operated Williston Basin Assets for $1.4 Billion
Deal Highlights
Per the deal, Halcn will offload the Williston Basin assets in North Dakota to a private energy firm unit Bruin E&P Partners, LLC. Halcn will offload around 104,000 net acres of oil and gas properties in McKenzie, Williams, Mountrail and Dunn counties in North Dakota. The assets have a production capacity of around 29,000 barrels of oil equivalent per day (boe/d).
The transaction is valued at $1.4 billion, all in cash. Halcn plans to use the proceeds from the sale for debt reduction. The company intends to purchase up to half of its 6.75% unsecured notes due 2025 and redeem all outstanding 12.0% second lien notes due 2022, including related prepayment premiums.
Subject to regulatory approvals and satisfactory closing conditions, the deal is scheduled to close in August.