Energy Prospectus

Here is some good news on a crap day in the market.

SM Energy Company (SM) announces today the successful completion of an exploratory test well in San Jacinto County, Texas. The Horizon Properties 2H (SM 100% WI), a horizontal completion in the Woodbine interval, produced approximately 740 BOE/d in a 24-hour test, flowing at 1,520 PSIG casing pressure on a 27/64ths inch choke, while cleaning up after fracture stimulation. Production consisted of 305 Bbl/d of 42 degree API gravity oil and 2,600 MCFD of rich gas (approximately 1250 BTU/scf). The well will be shut-in to await construction of a gathering system.

The Company has increased its acreage position in East Texas to approximately 105,000 net acres and expects to drill additional test wells targeting the Woodbine formation as well as other intervals of interest beginning in the third quarter of 2013. SM Energy expects to construct the necessary gathering system once several of these wells have been drilled. Capital for the 2013 delineation program will be funded largely from the Company’s existing New Venture budget.

SM Energy also announces that the borrowing base under the Company’s existing revolving credit facility has been increased to $1.9 billion, from $1.55 billion, as a result of its lenders’ regularly scheduled semi-annual redetermination process. The Company also amended the terms of its credit facility to increase the commitment amount from the bank group to $1.3 billion, from $1.0 billion, and to extend the maturity of the facility by approximately two years to April of 2018.

Tony Best, CEO, commented, “We are excited about the initial results in our first Woodbine test in East Texas. The Horizon Properties 2H well was a science well with approximately 2,500 feet of effectively stimulated lateral length. We expect to be able to improve our results on subsequent wells in this play. We have recently added approximately 10,000 net acres to our position and are still working to further expand our acreage position in this exciting play. I am also pleased by the increase in our borrowing base, as it reflects the growth in our proved reserve base.

“Success in our New Ventures program allows us to add inventory to our portfolio, which provides opportunities to create value for our shareholders through high-grading, increasing activity, or asset monetization. As always, we remain committed to a disciplined allocation of capital that creates long-term value for shareholders and maintains the financial strength of the Company.”

Check out SM's new corporate presentation that they are making in NY on April 16. Wall Street should love this new Eaglebine play. High btu gas with access to several markets.

HOUSTON, TEXAS, April 15, 2013 (GLOBE NEWSWIRE) -- Halcón Resources Corporation (NYSE: HK) ("Halcón" or the "Company") today unveiled a new East Texas Eagle Ford Shale play and provided a general update.

New East Texas Eagle Ford

Internally referred to as El Halcón, this new East Texas Eagle Ford Shale play has been established as the Company's fourth core area. The play extends across several counties in East Texas. Halcón is targeting 150,000 net acres in the play and currently has in excess of 50,000 net acres leased or under contract.

The Company has seven wells producing, one well being completed and three wells being drilled in this play. The average initial and 30 day rates for the producing wells have been 859 barrels of oil equivalent per day ("Boe/d", 94% oil) and 694 Boe/d (94% oil), respectively. These seven Eagle Ford wells have an average effective lateral length of 5,632 feet and were completed with an average of 28 frac stages. Expectations are to spud 15 to 20 wells in the play in 2013 by operating 1 to 3 rigs while spending approximately $100 million. Halcón's early stage estimates for reserves per well are 350,000 to 400,000 barrels of oil equivalent with development costs of $7 million to $8 million.

Floyd C. Wilson, Chairman and Chief Executive Officer, commented, "This management team knows a thing or two about the Eagle Ford Shale, and we intend to utilize our extensive knowledge of the formation to exploit this new opportunity to create shareholder value."

General Update

The Company is fully engaged in the drilling phase of its development and is currently operating 16 rigs on its assets. Halcón estimates it will add up to three operated drilling rigs to its program by year end 2013.

Wilcox

Based on 3D seismic data and drilling results, the Company has decided to dedicate more resources to its 110,000 net acre Wilcox position predominantly located in Southwest Louisiana. Halcón recently embarked on a multi-well program in this play.

The first well, the Smartt 1, is currently flowing back and was completed with 11 perforated intervals via a 3 stage frac in a 900 foot thick Wilcox section. This well was drilled to a total measured depth ("TMD") of 11,500 feet. Halcón anticipates a significant increase in activity in this play during the balance of 2013.

Bakken/Three Forks

The Company is in the process of implementing several drilling and completion modifications across its 130,000 net acre Williston Basin position that are expected to improve recoveries and lower costs. Halcón is optimistic that an ongoing focus on these modifications will continue to yield positive results.

Initial results from the implementation of several drilling and completion modifications are encouraging. In Williams County, North Dakota, the initial production rate on the most recently drilled and completed Middle Bakken well in the Marmon area was 1,142 Boe/d (85% oil), which is 37% higher than the average initial rate for all previously drilled Company-owned Middle Bakken wells in the area. Halcón believes this increase is largely due to a modified completion technique. In addition, the Company believes modified completion techniques that included an increased number of stages, increased proppant volumes and a reduced gel component, resulted in the two most recently drilled and completed Three Forks wells in the McGregory Buttes area on the Fort Berthold reservation having an average initial production rate of 1,819 Boe/d (95% oil), which represents a 20% improvement to the average initial rate for all previously drilled Three Forks wells owned by Halcón in the McGregory Buttes area.