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Halcon Resources upped at Barclays on move to Delaware Basin pure play

Published 07/13/2017, 02:45 PM
© Reuters.  Halcon Resources upped at Barclays on move to Delaware Basin pure play
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  • Halcon Resources (HK +1.8%) is upgraded to Equal Weight from Underweight with an $8 price target, raised from $5, at Barclays (LON:BARC), which believes HK's pending $1.4B sale of its Williston Basin assets essentially transforms the company into a pure-play Delaware Basin producer with a significantly improved balance sheet.
  • Pro forma for the sale, the firm estimates HK trades at 6.7x enterprise value per estimated 2018 EBITDAX, a 16% discount to Permian-focused peers, a valuation gap the firm thinks is justified for now but could narrow as the company de-risks its acreage with additional drilling and potentially delivers more visible and capital efficient growth.
  • Now read: Permian Basin: Is The Land Grab Turning Into Permania?


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