UPDATE 1-Halcón sale still probable, though work remains, CEO says

Mon Mar 24, 2014 9:01pm EDT

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By Ernest Scheyder

NEW ORLEANS, March 24 (Reuters) - More work needs to be done to develop Halcón Resources Corp's oil and natural gas assets before the company can be sold, Chief Executive Floyd Wilson said on Monday.

Executives have long stated that their endgame for the company, formed in 2011, would be a sale, although weak well results in Ohio's Utica shale formation have hampered that goal. The company's stock is down 45 percent in the past year.

"Our model is still to look for a sale at some point in the future," Wilson said in an interview on Monday at the Howard Weil energy conference in New Orleans. "Wall Street may or may not like us at the moment, but I'm certain they'll recognize us at some point."

Investors and analysts have been eager to see if Wilson can replicate the feat he pulled off in 2011 when he sold Petrohawk Energy to BHP Billiton Plc for $12.1 billion, a 65 percent premium over the share price before the sale was announced.

In 2012, Wilson forecast that a sale of Halcón would take place by 2015. Last fall, he modified that time frame, saying any potential sale could come within "a few years."

Wilson said on Monday that his latest goal of a sale at some point in the future was not a delay in the goal, but rather an acknowledgment that the company has more work to do to attract a potential buyer.

"At some point in time it'll be appropriate to look for a home for these properties," Wilson said.

Wall Street had grown anxious last year about the company's preoccupation with its 142,000 Utica acres, most of which are in a remote, northwest part of the shale formation far from where larger rivals Chesapeake Energy Corp and Gulfport Energy Corp are focusing.

Most of the wells drilled proved to not be up to Wall Street's high expectations for prolific production.

Acknowledging the misstep, Wilson said the northern Utica wells "were average" and Halcón is now looking at the potential of its holdings in the southern part of the Utica.

"I'm not saying the Utica is dead, but we have other things that are doing better," he said. "It's been a strategic shift in that, as always is the case in oil and gas, you spend money where you get the best returns."

Meanwhile, the company is devoting more than 90 percent of its capital budget to holdings in North Dakota's Bakken and the El Halcón play in Texas, he said.

"They've totally blossomed," Wilson said of the two shale fields. "We're completely focused on these two plays at this time." (Reporting by Ernest Scheyder; Editing by Paul Tait and Stephen Coates)

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