Halcón Resources Corp. is scaling back its drilling plans in the Tuscaloosa Marine Shale (TMS).
Because of the oil price slump that has many companies recalculating profit margins, Halcón is cutting down on activity in the TMS in Louisiana and Mississippi. Drilling in the TMS is costly and has yet to yield a great deal of profit. The low prices make the pricey project too risky.
According to an article by Rhiannon Meyers for Fuelfix, instead of adding two additional rigs to the TMS, Halcón is electing to remove the two rigs already operating. Company resources will be funneled into its two key shale plays: the Bakken and Eagle Ford.
Halcón has adjusted its plans for next year’s operations as a whole. The company currently has eight rights in operation and had planned to boost that number to 11. However, Halcón will only keep six rigs operating in the two major shale plays.
Tudor Pickering Holt calculated that West Texas Intermediate prices would have to fall between $70 and $90 per barrel in order for TMS drilling to remain economical.