Mar 24, 2014 22:50 Halcón buys larger stake in Tuscaloosa shale in La., Miss. Halcón buys larger stake in Tuscaloosa shale in La., Miss. Deal is Houston company’s latest move in expansion of Tuscaloosa Marine activity BY TED GRIGGS| email@example.com March 24, 2014 Comments Halcón Resources has acquired 95 percent of Encana Corp.’s Tuscaloosa Marine Shale leases in East and West Feliciana parishes and Wilkinson County, Miss., in a deal that could be worth as much as $400 million. Baton Rouge landman Dan Collins said the Halcón-Encana agreement — filed March 6 at the West Feliciana Parish Clerk of Court’s Office — is a positive development for the Tuscaloosa shale. Halcón Chairman and Chief Executive Officer Floyd Wilson took a look at the Tuscaloosa in the mid-2000s while CEO of Petrohawk Energy Corp., Collins said. But he chose then to explore the Eagle Ford Shale in Texas. Petrohawk’s success in that formation allowed Wilson to sell the company in 2011 to BHP Billiton, Australia’s largest energy company, for $12 billion. “If anybody can find oil and make it work, it’s Mr. Wilson,” Collins said. Kirk Barrell, author of the Tuscaloosa Trend blog and head of Amelia Resources LLC, said Halcón’s management and technical teams have a good record of success. From Encana’s standpoint, shedding some acreage is probably a smart strategic move, Barrell said. The company probably couldn’t drill all 300,000-plus acres it has under lease before those agreements expire. Canadian energy giant Encana kept all of its interests in only three wells: two in Wilkinson County and one in East Feliciana Parish, according to the filing. The company retained a 5 percent interest in the rest of its leases. Halcón subsidiary HK TMS LLC mortgaged the leases to Encana for an amount up to $400 million, records at the Clerk of Court’s Office show. The amount of acreage involved is unclear in the deal with Halcón. The filing included close to 5,000 leases. UpstreamOnline.com has reported that the deal will include at least 100,000 acres at $1,000 to $1,250. At that price, the deal would be worth $100 million to $125 million. SeekingAlpha.com put the acreage at 235,000 acres. The Tuscaloosa formation, which stretches across the middle of Louisiana and into Mississippi, holds an estimated 9 billion barrels of oil. Officials with Halcón declined to comment Friday. Encana spokesman Doug Hock said the company will not be commenting. The deal is the latest move in Halcón’s aggressive expansion of its Tuscaloosa Marine Shale activity. In 2013, the Houston-based company boosted its acreage in the oil-rich formation from 75,000 to 300,000-plus. Halcón CEO Wilson has said the company will spend about $95 million to drill 10 to 12 wells in the Tuscaloosa in 2014 but to look for “a huge impact” in 2015. Halcón’s original foray into the Tusacaloosa Marine Shale involved leases in the western part of Louisiana, Collins said. Those wells didn’t generate great results, and Halcón has since acquired acreage east of the Mississippi River. According to UpstreamOnline, Halcón is expected to form a joint venture with private equity firm Apollo Global Management taking a 25 percent interest, or more, in the acreage in exchange for the capital needed to develop the leases.