HKRS - Halcon Resources: Cost Structure Is An Issue After Emergence From Bankruptcy
Halcon Resources (OTCPK:HKRS) has emerged from bankruptcy with around $130 million borrowed under its new credit facility. The challenge for Halcon is that its 2018 water infrastructure sale has left its lease operating costs quite high. As well, Halcon's non-oil production is fetching low prices currently and its sour gas treatment costs are still significant. This combination results in Halcon achieving pretty low margins for its production.
As a result, it doesn't appear that Halcon can maintain production without cash burn at high-$50s oil. It also needs higher production levels, as its cash