For shares in a company to surge 27% while the S&P 500 gains a modest 7.8%, something had to go right. In the case of Halcon Resources (NYSE:HK) , its rise was almost serendipitous. So far this year, there have been a myriad of factors that sent shares of Halcon up more than 90%, but looming issues have brought the company back down to where it is today.

What exactly has happened for Halcon's stock to fly through the roof, only to become slightly more grounded in a couple of months? Let's take a quick look at what has happened so far this year, and see what may lie ahead for Halcon.

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What's all the excitement about?

Even by the standards of the go-go shale revolution here in the U.S., Halcon Resources has been a bit of a wild child. After CEO and Chairman Floyd Wilson discovered the Eagle Ford shale formation with his previous company Petrohawk -- now owned by BHP Billiton -- he took the reins at Halcon, and started exploring a lesser-known region the company has dubbed "El Halcon," which is basically an extension of the eastern boundaries of the Eagle Ford. On top of that, Halcon has also built out a position in the Bakken shale formation. These two formations account for a wide majority of the company's current production and, so far, they have allowed Halcon to more than double production on a year-over-year basis.

Source: Halcon Resources Investor Presentation.

Those numbers alone might be enough to see shares climb, but Halcon has been held back the past couple of years in search of a third shale formation to round out its portfolio. So far, it has struck out in the Utica formation in Ohio, as well as some other Texas properties that resulted in the company taking a $1.2 billion asset writedown about a year ago. The troubles with these positions have sent shares of Halcon on a wild ride over the past couple years.

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However, it appears that it has finally found its third shale formation, this time in the Tuscaloosa Marine Shale in Louisiana. The company has staked out a 315,000 acre position -- more than its Bakken and El Halcon acreage positions combined -- in this relatively unknown and unproven shale formation.

Source: Halcon Resources Investor Presentation.

However, it looks like this risk could yield some high rewards. Halcon and the two other major acreage holders in the Tuscaloosa Marine Shale -- Goodrich Petroleum and Encana -- have all released some promising well results that seem to indicate that this formation could be what Halcon was looking for. These well results more than anything else are why we saw shares spike earlier this year.

Dragged down by debt

Despite the impressive production growth and the promising well results, there's one thing that has investors increasingly nervous about owning shares of Halcon: debt. At last count, the company's debt-to-capital ratio was at an eyepopping 70.6%, close to double its peer average. All of that debt is rated well below investment grade, carrying with it a high coupon rate.

The theory that Halcon's management has held recently is that all this debt was necessary to fund its rapid production plans, and that the company would grow into its debt as production came online. The only problem with this theory is that Halcon has not yet been able to kick its debt dependence. During the past 12 months, capital expenditures have exceeded cash from continuing operations by more than three times. At the current pace, it will take a while before its operations are self-funding, and those funding shortfalls will need to come from somewhere -- debt, equity issuances, or asset sales.

There are no immediate issues with Halcon's debt. Its first senior notes aren't due until beyond 2020. However, those high coupon rates mean the company needs to shell out close to $120 million in interest payments per year, almost 10% of revenue during the past 12 months. These high debt payments will eat into profitability, and will ultimately lower investors' returns as the company hopefully turns toward profits. 

What a Fool believes

Halcon Resources has been a perfect study of the wildcat spirit of the American shale boom. Excitement about some of its findings has sent shares exploding, while disappointments have claimed just about all of that back. With what looks to be a solid third asset base to work from, it appears that Halcon has the potential to grow production, revenue, and, hopefully with it, earnings and share prices. With so much of the company's capital tied up in high-yield debt, though, investors should be slightly weary that this year's gains could just as easily be lost.