Citadel Advisors Boost Stake in Halcon Resources


Citadel Advisors LLC has boosted its stake in Halcon Resources Corporation, according to a 13G filing. Kenneth Griffin’s value oriented hedge fund now owns a 5.2% stake in the company. According to a 13F filed for the third quarter, Citadel Advisors owned a 4.2% stake in the Delaware based company. The hedge fund now owns 11,238,005 shares in Halcon Resources, making the fund the second largest shareholder.

On November 9th, Halcon Resources Corp (NYSE:HK)  reported 3Q12 EPS of -$0.01, versus consensus of $0.00, and largely in line EBITDA of $39 million, versus consensus of $40 million.

Management is focusing its 2013 drilling program less aggressively towards high-risk exploration and more towards the Bakken, Woodbine and Utica Shale plays. Analysts believe that the proposed-to-be-acquired Petro-Hunt properties would provide a lower-risk source of visible production growth, while in the Woodbine, Halcon Resources Corp (NYSE:HK could be a key leader. Drilling is early in the Utica, and results represent a key catalyst.

Halcón plans to evaluate the results in Tuscaloosa Marine Shale and Utica Shale by drilling wells across its acreage before stepping into the development phase, enabling Halcón to find sweet spots in the play prior to committing capital for development wells. This makes 2013 a key year, as much of its areal positions will be tested.

Halcón expects to lower well costs by $1 million in the Woodbine play by reducing the size of intermediate hole.

Management indicated it is not looking to make another material acquisition.

For the nine months ended 30 September 2012, Halcon Resources Corp revenues increased 58% to $123.3M. Net loss applicable to common stockholders totaled $134.3M vs. income of $10.8M. Revenues reflect Oil increase of 75% to $109M. Net loss reflects Net gain (loss) on derivative contracts decrease from $16.6M (income) to $849K (expense), Interest expense and other, net increase of 60% to $22M (expense).

Disclosure: no position