Halcon buys back $91.3 million notes at market prices since year-end, looks to cut debt further

By Susanna Moon

Chicago, Feb. 26 – Halcon Resources Corp. bought back $91.3 million principal amount of its senior notes at market prices since its fiscal year ended Dec. 31, according to a 10-K filing with the Securities and Exchange Commission.

The repurchases consisted of $15 million principal amount of the company’s 9¼% senior notes due 2022, $51.8 million principal amount of its 8 7/8% senior notes due 2021 and $24.5 million principal amount of its 9¾% senior notes due 2020.

At settlement, the company also paid accrued interest.

In the fourth quarter, the company used $14.8 million of net cash to repurchase $44.5 million principal amount of its senior notes.

The company bought back $6.2 million principal amount of its 9¾% senior notes due 2020, $28 million principal amount of its 8 7/8% senior notes due 2021 and $10.3 million principal amount of its 9¼% senior notes due 2022.

In response to the prolonged oil slump, the company said it has reduced its spending and completed a series of transactions that has reduced long-term debt by about $1 billion and cut annual interest burden by about $53.5 million.

The company said it is “continuing to actively explore and evaluate various strategic alternatives to reduce the level of our long-term debt and lower our future cash interest obligations, including through debt repurchases, exchanges of existing debt securities for new debt securities and exchanges or conversions of existing debt securities for new equity securities.”

The company said that although it has enough liquidity over the next 12 months to operate its business and to meet cash requirements, based on current market conditions, the company needs to ease its long-term debt and cash interest obligations in order to improve its financial position and flexibility and “to position us to take advantage of opportunities that may arise out of the current industry downturn.”

Halcon Resources is a Houston-based oil and natural gas company.

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