Last month, Halcon Resources Corp (HK) announced a 14% cut in its planned 2014 capital expenditure spending plan. On the one hand, there was some very good news as the company reiterated its production guidance, meaning the spending cut wouldn't lead to lower production. That said, there still are reasons to worry about Halcon Resources in 2014, and here's why.

Flat production
Halcon Resources now plans to spend $950 million in 2014 on drilling and completing new wells. Those funds should enable the company to produce an average of 38,000 to 42,000 barrels of oil equivalent per day, or Boe/d, in 2014. What's a bit concerning about those numbers is that Halcon Resources produced 37,707 Boe/d in the third quarter of 2013. Essentially, that near billion dollars in capital isn't leading to a whole lot of production growth in 2014.

One reason Halcon Resources doesn't see much growth is due to the fact that it's selling assets to pay for its 2014 plan. While that could pay dividends down the road, there are plenty of other energy companies actually growing production in 2014. For example, Concho Resources (CXO) recently accelerated its drilling program in the Permian Basin. Concho Resources now sees its production growth averaging 25% over the next three years, which has it on pace to double its production by 2016.

Funding gap
The other issue facing investors is the fact that Halcon Resources is still aggressively spending, but not aggressively growing. For example, the company is funding its 2014 capital plan with a combination of internally generated cash flow, borrowing under its credit facility and additional non-core asset sales.

Lately, we've been witnessing more and more energy companies shy away from aggressive, underfunded capital plans. One of the leaders of that strategy, Chesapeake Energy Corporation (CHKA.Q) is backing away from it in 2014. Under the leadership of new CEO Doug Lawler, Chesapeake Energy is lowering its capital spending to the point where its growth is funded within its cash flow.

Similarly, other aggressive growers like Kodiak Oil & Gas Corp (NYSE: KOG) are shifting gears to reduce capital spending to match cash flow. In 2014 Kodiak Oil & Gas is reducing its planned capital spend by about $60 million to match its expected cash flow for the year. However, the company also expects to grow its production by 45% for the year.

Investor takeaway
The fact that Halcon Resources is reducing its planned capital spending isn't a bad thing. However, it's not reducing it enough to match its planned cash flow. Further, the money it is spending isn't producing the growth that some of its peers will enjoy in 2014. That's a worrisome combination for me and why I plan on steering clear of the stock in 2014. I simply see much better opportunities elsewhere.

One great oil stock to buy in 2014