Halcon Resources told investors during a Nov. 11, 2014, earnings call that it will be scaling back drilling in the Tuscaloosa Marine Shale in southeast Louisiana and southwest Mississippi due to falling oil prices.
“[Regarding the] Tuscaloosa Marine Shale, I’m going to do my darndest to make sure that people understand that we’re highly confident and we like the play,” said Halcon Chairman and Chief Executive Officer Floyd Wilson. “There is a lot of oil there, but it’s an early-stage development project. The core of the play has plenty of commercial locations, however, it is currently a relatively high-cost play, and with currently low crude prices, we will not be devoting a significant portion of our resources to the Tuscaloosa Marine Shale in the near term. We don’t have any lease issues we care about.”
The company said that it plans to pull its two rigs from the shale and focus on growing its prospects in the Williston Basin in North Dakota and Montana and the El Halcon Basin in eastern Texas.
Earlier this year, the company secured investments to expand operations in the Tuscaloosa Marine Shale. The company announced in June its plan to spud 10 to 12 operated wells in the shale, running an average of two rigs in 2014. The company signed an agreement with affiliates of Apollo Global Management for an investment of up to $400 million to support Halcon’s efforts.