Halcon has established the TMS as a third core area. In aggregate, the Company has approximately 307,000 net acres leased or under contract in the play. Approximately 77% of the acreage is located in Southwest Mississippi and the Louisiana Florida Parishes, also known as the "Eastern TMS."
The proceeds from the pending sale of non-core assets are expected to provide Halcon the ability to internally fund the TMS program. However, the Company is evaluating joint venture options for its entire TMS position and is engaged in ongoing discussions with several potential partners. Halcon employs an experienced exploration staff that has been working the TMS for more than a year with access to hundreds of well logs and core data from a number of wells. As a result, geologic mapping from these efforts have allowed for the acquisition of land within a well-defined area believed to be the geologic core.
The Company plans to operate an average of 2 rigs for the remainder of 2014 and spud 10 to 12 gross operated wells in the TMS. Halcon also expects to participate in several non-operated wells in 2014. Expectations are to spud the next operated well in March of 2014 near producing TMS wells in Wilkinson County, Mississippi. No changes to guidance are being made as a result of this announcement as TMS drilling activity was incorporated into the Company's 2014 business plan and budget. Halcon plans to spend approximately 10% of its drilling and completions budget in the play in 2014, subject to reduction dependent upon ongoing negotiations with potential joint venture partners.
Charles E. Cusack III, Chief Operating Officer, stated, "We have been working the Tuscaloosa Marine Shale from a geologic standpoint and monitoring industry activity in the play for quite some time. Our strategy is to identify scalable and repeatable resources plays where we feel we can meaningfully improve the economics by applying the extensive technical experience. We believe the TMS fits that strategy, and we are excited about our position in the play."
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