Halcon Energy Pays Record Price for Drilling Leases
YOUNGSTOWN, Ohio – A Texas company has closed a $194 million deal to lease mineral rights for a huge swath of land in Trumbull and Mahoning counties, paying what appears to be a record high price per acre. And while none of that money will go to the actual landowners, they could be in line to negotiate royalties.
Halcon Energy Properties Inc., a wholly owned subsidiary of Halcon Resources Corp. of Houston, paid $194 million in cash, or in round numbers $6,100 per acre, to NCL Appalachian Partners LP to purchase the mineral rights for 27,000 acres in Trumbull County and 4,000 acres in Mahoning County. The deal closed June 28, according to documents filed with the Securities and Exchange Commission, and came to light Thursday with Halcon’s filing of second-quarter financial results.
Halcon now owns the oil, gas and/or mineral leases for the Utica Shale formation on the 31,000 acres but not any mineral royalty interests in the properties covered by the leases, the purchase agreement states. Most of the leases are for land in Lordstown, Jackson and Milton townships.
Specifically stated in the agreement is there will be “no press releases … except as may be required under applicable law.”
The per acre price of $6,100 Halcon paid is considerably higher than BP’s price of $3,900 per acre it negotiated with the Associated Landowners of the Ohio Valley to lease the mineral rights for 84,000 acres in Trumbull County. That agreement was announced in March.
The publicly traded Halcon filed its SEC notification of the NCL Appalachian purchase agreement July 2. NCL Appalachian Partners, also based in Texas, is not publicly traded and does not maintain a website easily found through online searches.
In its quarterly financial report filed Thursday, Halcon said it incurred, in addition to the Trumbull County acreage, “approximately $274.5 million in capital expenditures on unevaluated oil and gas leaseholds through numerous leasing and acquisition transactions. No oil or natural gas production or proved reserves are currently attributable to the leasehold assets, which [are] primarily located in Texas, Louisiana, Ohio and Pennsylvania.”
Halcon reported net income of $2.8 million, or 2 cents per share, for the second quarter of 2012. This compares to net income of $2.3 million or 9 cents per share, for the second quarter of 2011.
The company said it produced an average of 3.812 barrels of oil equivalent per day during the quarter, 73% of which was oil and natural gas liquids.
Copyright 2012 The Business Journal, Youngstown, Ohio.
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