Good day, ladies and gentlemen, and welcome to your Halcón Resources 4Q 2014 and Full Year 2014 Earnings Conference. At this time, all participants are in a listen-only mode. Later, we'll have a question-and-answer session and instructions will be given at that time. I would now like to introduce your host for today's conference, Chairman and CEO, Floyd Wilson. Sir, you may begin. Floyd C. Wilson - Chairman & Chief Executive Officer: Thank you. Good morning. This conference call contains forward-looking statements. For a description of our disclaimer, see our earnings release issued yesterday afternoon and posted on our website. So from an operational standpoint, 2014 was another good year for Halcón. We consistently exceeded production expectations, despite through the second half of the year reducing rig count throughout. Proved reserves increased by 60% during the year and drill bit reserve replacement was 570%. We've reduced our 2015 drilling completion budget several times over the past few months. Service costs have come down significantly and continue to come down since the beginning of the year. Companywide, we currently have 26 operated wells being completed or waiting on completion. We're operating three rigs, two in the Williston and one at El Halcón in East Texas. Up in North Dakota, we had 57% production growth year-over-year in 2014. We will concentrate our two-rig drilling program during this year in our highest return area. And since it's only two rigs, there's minimal impact to our operated drilling inventory due to the low rig count. Completed well costs in this area have come down 25% since the fourth quarter of 2014; we expect to see more. The current AFE for wells drilled on acreage in the Fort Berthold area is less than $8.5 million. Wells we spud in that area continue to outperform our…

Our first question comes from Neal Dingmann of SunTrust. Your line is open.

Good morning. Say, two questions. First, you previously mentioned in your prepared remarks about the Bakken well costs. I know those continue to come down for you. Could you discuss about as far as how much ceramic you use in the proppant. I'm just wondering there if you're pretty set in the current recipe or can you continue to cut costs with that? Floyd C. Wilson - Chairman & Chief Executive Officer: (11:14) I'll make a brief comment and then he'll really respond. Looks like we're going all the way to white sand. We've had enough wells and our peers up there have drilled enough wells with this. We haven't really seen a huge difference and it saves a lot of money per well, $0.5 million to $1 million, barrels, and it'll depend on which well you're on. So some of the cost reductions are due to different design, but a lot of the cost reductions is due to just lower service costs. Charles, would you add to that? Charles E. Cusack - Chief Operating Officer & Executive Vice President: That pretty well covers it. But the key is what Floyd says: going 100% white sand. And it cuts that $0.5 million or so off of it. And we have – with our large non-opposition we're in with a lot of other companies and there's enough production history now from wells that just have 100% white sand, (12:05) and we don't see any difference in the basin. So we're very confident going into that direction. Floyd C. Wilson - Chairman & Chief Executive Officer: Also Neal, in certain areas, putting some gel in a slickwater frac reduces the water requirement. And in the north, water is not quite expensive and down at Fort Berthold, it is quite expensive. So that's a big factor as well.

Yeah, great point. And then just one last follow-up, Floyd. Just wondered, you look at liquidity out there, obviously, you guys have no problems there. So just wondering, how do you view the M&A market or more specifically are there any bolt-on opportunities you have and any interest in doing any step-outs with this kind of macro environment? Floyd C. Wilson - Chairman & Chief Executive Officer: We're very comfortable with where we are. We'll continue to grow the company for the next few years and see what goes on. The M&A market seems to be a bit quiet right now. There's a lot of shock, and shock out there with how quickly things have moved. Historically, these times create opportunities and we certainly have our eyes open. We're very focused on quality in core area disciplines. So you wouldn't expect us to try to do anything that wouldn't follow those comments.

That makes sense. Thank you.

Our next question comes from the line of Ron Mills from Johnson Rice. Your line is open. Ronald E. Mills - Johnson Rice & Co. LLC: Hey, good morning, Floyd. Maybe for you or Charles, on the production history with the hybrid slickwater and/or the use of white sand versus the resin-coated sand, how much production history do you have on using those methods? Do you still feel comfortable that the wells are outperforming as we see in your new presentation? Charles E. Cusack - Chief Operating Officer & Executive Vice President: We have a about a year on three wells that are all white sand. The ceramic wells, we have a couple of years now, plus others. But in our non-op wells and wells around us there's a couple years on all of them. And we don't see any difference at all. The bigger differences are the amount of proppant and fluid or amount of proppant in place, not the type. Ronald E. Mills - Johnson Rice & Co. LLC: Okay. And then as you talk about self-sourcing portions of it, Floyd, I think you mentioned mud maybe even some proppant and chemicals, how much of that $1.5 million of cost savings so far do you think is related to the self-sourcing versus vendor pricing? Floyd C. Wilson - Chairman & Chief Executive Officer: There's some of all that in there. The self-sourcing is more along the lines of supervisory services, which we used to farm out a lot. We're trying to do as much of that in-house as we can, so it's a combination. But over time, we expect this in-house insourcing that we're doing to be quite a factor. And also, not that we weren't close, but keep us really close to exactly what's going on minute…

Our next question comes from the line of Michael Rowe from Tudor, Pickering, Holt & Company. Your line is open. Michael J. Rowe - Tudor, Pickering, Holt & Co. Securities, Inc.: Hi. Good morning. Floyd C. Wilson - Chairman & Chief Executive Officer: (19:18) Michael J. Rowe - Tudor, Pickering, Holt & Co. Securities, Inc.: Wondering if you can maybe speak a little bit to where your corporate PDP decline rate is today? And given the reduced activity levels in 2015, how that could change as you enter into 2016? Floyd C. Wilson - Chairman & Chief Executive Officer: In a general sense – I don't have the exact numbers in front of me – the corporate decline rate when you're drilling more shale wells, more horizontal wells is higher. So it's going to be around 30% to 35%. When you're drilling fewer wells, the decline rate is lower. It's going to be closer to 25%. That's about where we're today. This can change. It all has to do about scheduling. So if you wanted to try to do to model this, if say we're going to grow 5% or 10% this year, we'll have to overcome a 25% decline as well. Michael J. Rowe - Tudor, Pickering, Holt & Co. Securities, Inc.: Okay. That's helpful. And I guess you have quite a large acreage position at El Halcón. Given your size and current level of drilling activity, you're seeing some service cost reductions so far, but it's still awaiting to get full development, certainly bring those down more. So I'm just kind of wondering – and I know you don't have liquidity issues now, but have you considered partnering with (20:35) operators to try to fast track process to get the full development and bring down that cost structure further? Floyd C. Wilson - Chairman & Chief Executive Officer: Michael, at our company everything's on the table all the time. Michael J. Rowe - Tudor, Pickering, Holt & Co. Securities, Inc.: Fair enough. Thank you.

Our next question comes from the line of James Spicer of Wells Fargo. Your line is open.

Yeah. Hi, good morning everybody. I've got a couple of quick questions on the balance sheet, probably for Mark. First of all, can you talk a little bit about how you view the appropriate level of leverage and/or absolute debt in the price environment that could be lower for an extended period of time? And as a follow-up to that, you mentioned that you're looking at some possible ways of strengthening the balance sheet. I'm wondering if you could elaborate on that a little bit? Mark J. Mize - Chief Financial Officer, Treasurer & Executive VP: Yeah. As we've indicated leverage is higher than we want it to be, of course. And it's something that we're focused on and there are some thoughts here in the company that we've been working on, on ways to bring that down. Obviously, we can't get into specifics on what may or may not happen in the future, but we're obviously very focused on it. And that's also reflected in what we've done with our 2015 capital spend to try to stay as close to within cash flow as possible so that that number doesn't continue to creep up too much on us. Floyd C. Wilson - Chairman & Chief Executive Officer: So look, appropriate level of leverage would be at least a third less than we have, but we don't have that right now. So we've backed off the spend. We've done a lot of hedging. We've made other reductions around the company so that we can get through this, and we will. Of course, it'd be lovely to have less leverage than we have right now. If you'd of called me a year ago and said that we're going to have this oil price, we would have less leverage than we have right now. But you didn't call me.

Okay. So it sounds like there's nothing that you can provide at this point in terms of additional detail on specifics about what you are looking at? Floyd C. Wilson - Chairman & Chief Executive Officer: No, not at this time, no. Thanks, though.

Okay. And the just one more question on the borrowing base redetermination. I thought that was great news that that was reaffirmed. Can you just clarify that you're in the clear now for the next six months as far as the borrowing base redetermination goes? And maybe a little bit about what drove the banks to ultimately reaffirm you guys at the current level? Floyd C. Wilson - Chairman & Chief Executive Officer: Look, Michael, that's sort of a Mark question. But let me just say, we have a long history with all of our banks. We have a long history of strong production reserve growth, which we delivered last year as well. And this weighs heavily into their thoughts. Our big hedge book also is a big factor for this because they're driven by their own price decks. So Mark got 100% of the banks in, and we're good until the next time of redetermination. And we'll see what goes on then, but I'd point out that we have a very strong hedge book at that moment too in the fall for this year and for 2016. So it's a combination of experience the banks have with us and Mark's foresight in making sure that we hedge.

All right. Thanks a lot, guys.

Our next question comes from the line of Chad Mabry of MLV & Company. Your line is open. Chad L. Mabry - MLV & Co. LLC: A question on reserves. Obviously, a strong reserve report that you put out last week. I was hoping to get a little color on your inventory up in the Bakken. Just curious how much Netherland, Sewell gave you credit for on the 660-foot downspacing? Any color you could give on the locations out there? Floyd C. Wilson - Chairman & Chief Executive Officer: Yeah. Obviously, the location count goes up and down with oil prices, and we have this five-year limitation within our estimates of those kinds of things. The great news – the sidelines or the bad news of low oil prices is that we're below rig count. We're barely touching our inventory of locations. The location spacing – and Charles is sitting here, I wanted to add, if I blow this question. But it's very dependent on where you are in the field. And we feel it's very dependent if you're drilling Three Forks wells, top bench Three Forks wells right underneath your Middle Bakken wells. So it's not just a question of, well, it's 660-foot or 800-foot or 1,000-foot. It's different across the field. And it's a highly technical discussion that leads us to draw our conclusions. There's clearly lots of the field that's good for 660-foot. And there's some of the field where the Three Forks is quite good, that you might not want to quite drill it that much or you might drill more Three Forks than you would and less Middle Bakken. So we don't really publish that inventory number. It's in the hundreds and hundreds and hundreds of wells. Charles, what else would you say? Charles E. Cusack - Chief Operating Officer & Executive Vice President: Yeah. Only general comment I'd say on that is NSA did not give us credit for as tight as we're actually drilling right now. And we are drilling everything on 660s-foot or 880s-foot, kind of depending on the existing wells that are in that unit already. But we have 20 operated DSUs, all in Fort Berthold that are already, what we call, downspacing tests. And they're not tests anymore because that's just – that's the norm these days. It's not just us. It's all the other operators in the basin as well. Chad L. Mabry - MLV & Co. LLC: That's very helpful. That's all I had. Thank you.

Our next question comes from the line of Gary Stromberg of Barclays. Your line is open.

Hi. Good morning. Just a follow-up, Mark, on the borrowing base question, when will the next borrowing base redetermination be? And do you have any expectations on where that could wind up? Mark J. Mize - Chief Financial Officer, Treasurer & Executive VP: Yeah, Gary, the next redetermination will be in the fall. We typically do that kind of in the October, maybe into early November timeframe. Where it's going to go clearly will be dependent of what commodity prices do. But again, with the hedges that we have in place, we'll have some protection there. And we're also going have the impact of drilling between now and then that will, of course, be beneficial to the redetermination.

And what... Floyd C. Wilson - Chairman & Chief Executive Officer: With our hedge book, I'd be surprised if it changes. But I could be wrong.

Okay. And do you know what price deck the banks use for the $1.05 billion borrowing base? Floyd C. Wilson - Chairman & Chief Executive Officer: It's varied. Mark J. Mize - Chief Financial Officer, Treasurer & Executive VP: Every bank, as you would expect, is a little different. The JPMorgan deck, I believe, starts in the – it was in the high $40s, and I think worked up to a long-term price in the $70 to $75, somewhere in that ballpark.

Okay. And then, Mark, on the budget $350 million to $400 million (29:07) doesn't include capitalized costs, how we should think about capitalized costs this year? Mark J. Mize - Chief Financial Officer, Treasurer & Executive VP: I believe probably up $150 million to $200 million.

Okay. That's all I had. Thank you.

Our next question comes from the line of Jason Gilbert of Goldman Sachs. Your line is open. Jason A. Gilbert - Goldman Sachs & Co.: Hey. Good morning, guys. Thanks for taking my questions. I guess sort of a production guidance question. I think you said the backlog on wells uncompleted right now was at 26 maybe. I was wondering where do you see that at year-end 2015? Where do you see the exit rate 2015 production versus where we were at year-end 2014? Floyd C. Wilson - Chairman & Chief Executive Officer: This current level has been driven by postponing frac jobs. Last year, at the end of 2013, we had 20 or 25 wells that were waiting on completion that were driven by a higher rig count. By the end of this year, assuming costs come to line, we would guess this inventory would be a bit smaller, but we'll still have an inventory by the end of the year. It's just timing and, particularly up in Fort Berthold, doing three and four and five fracs at a time on pads. It's inevitable we'll have some. It's not a matter of us not going to frac the wells. We're just trying to get the cost in sync with what the real-time oil prices are unhedged and that's coming into line. So we're about to release some new frac work, and we're bidding everything several times because it's changing for the service providers, too. So the inventory will be up and down a little bit during the year, but I'd say it'd be down by the end of the year a bit. We'll still have 10 or 20 wells by the end of this year though, 10 or 15 wells. We don't really project that right now. Jason A.…

Our next question comes from the line of Jason Wangler of Wunderlich Securities. Your line is open.

Good morning. Just at El Halcón, you talked about obviously just drilling the one well. And where are we in the lease capture side of this business? And is it next year when we're going to start looking at pads? And just kind of the cadence of that? Floyd C. Wilson - Chairman & Chief Executive Officer: Charles, can answer that. Charles E. Cusack - Chief Operating Officer & Executive Vice President: Yeah, that's our current plan right now. And like Floyd mentioned earlier, it's over a million dollars, $1.25 million less cost once you go in development mode. So that gives an extra 10% to 15% rate of return on top of that. Floyd C. Wilson - Chairman & Chief Executive Officer: We're probably around 75% or plus or minus of the lease capture. Some of the leases we don't care about because they're small chunks within units that we control. And it's just like the frac jobs. If you're going to re-lease something, you have to wait for the lease prices to get in sync with oil prices. And so you don't rush around to do anything. We'll hold all of the acreage that we really care about with our drilling program this year and the first part of the next. And we'll be into pad drilling sometime next year, towards the end of the year.

That's helpful. Thank you.

And we have no further questions in the queue. I would like to turn the call back to Mr. Floyd Wilson for closing remarks. Floyd C. Wilson - Chairman & Chief Executive Officer: Well, there are no remarks. Thanks for dialing in. And if you think of something we didn't answer, just give us a call. Thanks, operator.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the call. You may now disconnect. Everyone, have a wonderful day.