Floyd Wilson made a $303 million Texas land deal last week that buys time and provides cash for the chief executive of Halcón Resources to do what he does best: spruce up an oil company and sell it off to the highest bidder.
Wilson sold less-desirable land in northern Texas, but retained lucrative land in eastern Texas. The move immediately lowered average operating costs and gave a $13 million after-tax boost to the $3 million cash reserves Halcón reported at the end of the second quarter.
The deal also enables Wilson and the company's 450 employees to focus on assets in the El Halcón and Woodbine shales in Texas, as well as in the Bakken in North Dakota and the Utica field in Ohio.
"We will be successful," Wilson said in an interview on Thursday over a glass of Diet Coke. "I've been doing this a long time. Nothing keeps me up at night."
Wall Street is anxiously waiting to see if Wilson can replicate the feat he pulled off in 2011 when he sold Petrohawk Energy to BHP Billiton for $12.1 billion, a 65 percent premium over the share price before the sale was announced.
Although his new company is only two years old, Wilson is already testing the patience, and wallets, of his investors. Halcón's stock price is down more than 30 percent this year following multiple stock offerings and concerns about a $2.71 billion debt load, which exceeds the company's market value.
Also dogging the Texas oilman are uncertainties about the potential of 142,000 acres in Ohio's Utica shale, a formation of oil- and natural gas-rich rock.
Last week's sale included old wells in northern Texas that require injection of water to extract oil. Their lease costs are five times higher than Halcón's wells in North Dakota's Bakken shale.
Wilson began his career as a completion engineer in 1970, overseeing equipment that extracts oil from a well site. He made his mark founding oil companies and then selling them to the likes of Chesapeake Energy and Plains Exploration & Production Inc.
Together with several former colleagues from Petrohawk, Wilson pooled $55 million to form Halcón in 2011. EnCap Investments LP, a private equity firm, together with a subsidiary of Liberty Mutual Holding, invested $550 million.