Halcon Ressources, Corp. (NYSE:HK) Bounced From the Bottom with a Gap
[[tagnumber 0]]Halcon Ressources, Corp. (NYSE:HK) jumped with a gap at market open on Friday and formed a bullish doji pattern on the chart. The increase was not initiated by any news from the company but followed the general move of energy stocks as HK recently released a third quarter report that did not suggest higher value for the stock.[[tagnumber 1]] [[tagnumber 2]][[tagnumber 3]][[tagnumber 1]] [[tagnumber 2]]HK closed at $0.653 for a share on Friday, representing an 11.03% gain from the previous close. The trading volume was only slightly higher than the daily average, yet technical indicators reversed sharply upwards and now imply further increase towards the middle of the trading range today. The 10–day moving average looks like a level of resistance for the share price.[[tagnumber 1]] [[tagnumber 2]]As with all energy companies this year, HK did not file a very optimistic quarter report earlie[[tagnumber 8]]r this month. Oil and gas sales dropped to less than one half while the company also reported nearly three times higher operating expenses due to some impairment charges. On the other hand, KH negotiated some debt restructuring that could have short–term positive effects on its balance sheet.[[tagnumber 1]] [[tagnumber 2]]HK long–term debt was reduced by over $300 million due to the conversion of certain notes, however, that came at the cost of massive shareholder dilution. More than 145 million shares were issued during the first nine months of the year upon conversion of senior notes, while another 16 million were issued after redemption of preferred stock. That makes a 45% increase in the total number of issued and outstanding shares within just a few months.[[tagnumber 1]] [[tagnumber 2]]Though HK still reports positive cashflows from operations, its working capital was only $88 million at the end of September. Thus, it will most probably again need to make draw downs on its credit line which has a borrowing base of $850 million. That means more debt on its balance sheet.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]]
