CALGARY, April 28 /CNW/ - Hawk Exploration Ltd. ("Hawk" or the "Corporation") announces that it has filed on SEDAR its audited financial statements, and related management's discussion and analysis. The Corporation also filed its Annual Information Form for the period ended December 31, 2009 containing the Corporation's Statement of Reserves Data and Other Oil and Gas Information as of December 31, 2009 as mandated by National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators. Copies of these filings can be found at www.sedar.com or on the Corporation's website at www.hawkexploration.ca under Investor Info - Financial Reports.
Selected financial and operational information for the three months ended December 31, 2009 and the period from February 2, 2009 to December 31, 2009 is provided as follows:
Three months ended February 2, 2009
December 31, 2009 to December 31, 2009
Petroleum and natural gas
revenue $ 2,015,954 $ 2,058,631
Funds flow from operations(1) 1,040,644 858,357
Per share(1) 0.04 0.06
Net income (loss) 81,865 (77,556)
Per share 0.00 (0.01)
Capital expenditures 2,060,514 4,262,620
Property acquisition $ 98,656 $ 12,621,314
Working capital surplus,
end of period $ 8,165,018
Total assets, end of period $ 26,625,081
Common Shares outstanding,
end of period:
Class A Shares 21,980,953
Class B Shares 1,080,000
Options to acquire
Class A Shares 1,010,000
Weighted average shares
outstanding on combined
basis, basic and diluted(2) 28,152,382 14,633,040
Three months ended February 2, 2009
December 31, 2009 to December 31, 2009
Crude oil and natural gas
liquids (bbl/d) 301 85
Natural gas (mcf/d) 425 117
Total (boe/d) 372 105
Average Selling Price
Crude oil and ngls (per bbl) $ 66.22 $ 66.12
Natural gas (per mcf) $ 4.66 $ 4.66
Total (per boe) $ 58.93 $ 59.00
Operating netback (per boe
at 6:1)(3) $ 35.79 $ 35.41
(1) Management uses funds flow from operations to analyze operating
performance, leverage and liquidity. Funds flow from operations as
presented does not have any standardized meaning prescribed by Canadian
GAAP and, therefore, may not be comparable with the calculation of
similar measures by other entities.
(2) Class B Shares were converted to Class A Shares based on the
December 31, 2009 closing price for the Class A Shares of $1.75 per
(3) Management considers operating netbacks as an important measure as it
demonstrates profitability relative to current commodity prices.
Operating netbacks do not have a standardized meaning prescribed by
Canadian GAAP and therefore may not be comparable with the calculation of
similar measures by other entities.
It is a great pleasure to report on Hawk activities for 2009. Hawk was incorporated in February 2009 and commenced operations in June 2009. Since that time, the Corporation accomplished the following:
- Completed Hawk's initial public offering, raising gross proceed of
$12 million during a period of pronounced economic uncertainty.
- Acquired approximately 350 boe/d of crude oil and solution gas at
Provost ("Dolcy") for cash consideration of $12.6 million.
- Completed a second equity issue, raising gross proceeds of $13 million
to finance the Dolcy acquisition.
- Drilled seven (6.3 net) wells resulting in four (3.7 net) crude oil
wells, two (2.0 net) standing wells and one (0.6 net) dry hole.
- Added significantly to the Corporation's land base by acquiring
approximately 12,943 net acres of undeveloped land at Alberta and
Saskatchewan crown land sales,
- Shot and acquired 85 kilometers ("kms") of two dimensional ("2D")
seismic data and 38 square kms ("kms(2)") of three dimensional ("3D")
seismic data to evaluate Hawk's land.
- Established a $6 million line of credit with a Canadian bank, adding
to the Corporation's financial flexibility.
- Generated cash flow of $1,040,644 ($0.04 per share) and net income of
$81,865 ($0.00 per share) for the fourth quarter of 2009, and
- Averaged 372 boe/d of production in the fourth quarter, of which 81%
was crude oil, with an operating netback of $35.79 per boe.
Hawk's growth strategy was formulated, refined and carried forward from its two successful predecessor companies, Hawk Energy Corp and Hawk Oil Inc. The current management of Hawk successfully grew and sold the two entities, earning exceptional rates of return for the companies' shareholders. The basic growth strategy remains unchanged as Hawk is focused on growing its production base, cash flow and cash flow per share in a profitable manner through the drill bit and intends to accomplish this by targeting high netback oil production in low-cost areas. These areas are characterized by year-round access, available infrastructure, moderate drilling depths, lower land costs, and significant in-house technical expertise. The key principles of Hawk's growth strategy are:
- Focus on areas where Management has technical experience and
- Focus on moderate risk, moderate reward drilling opportunities with
- Operate at 100% working interest, where possible,
- Control costs, and
- Supplement drilling focus with selective, strategic acquisitions.
In 2009, Hawk executed on this strategy by accumulating 12,943 net acres of undeveloped land, shooting and acquiring 85 kms of 2D seismic data, 38 km(2) of 3D seismic data, and drilling seven (6.3 net) wells, while executing a strategic acquisition in the Dolcy area of Alberta in September 2009.
Based on the current commodity price environment and ongoing depressed natural gas prices, Hawk intends to continue to focus its capital spending on oil prospects. The Corporation has set a capital budget of $15 million for 2010, of which approximately $10 million is budgeted for the drilling and completion of up to 25 net wells. In order for the Corporation to fulfill its flow-through spending commitment, a large percentage of the Corporation's drilling budget for 2010 will be exploratory in nature. Success from this year's exploratory drilling will fuel the growth for the Corporation's development program in 2011 in conjunction with Hawk's existing development projects at Dolcy and Carruthers.
Hawk has planned an active summer drilling program and intends to drill ten (9.0 net) wells targeting light, medium and heavy oil zones in its core plains area of Alberta and Saskatchewan. The drilling program is expected to commence immediately following spring break-up, weather permitting, and includes the anticipated drilling of two (2.0 net) infill development wells and one (1.0 net) exploratory well at its main producing property at Dolcy.
Current production is approximately 430 Boe/d, of which 84 % is crude oil. The Corporation continues to maintain a strong financial position with a working capital surplus of approximately $8.2 million at December 31, 2009 and an undrawn $6 million line of credit, which, along with cash flow from operations, will fund Hawk's 2010 capital budget.
President, Chief Executive Officer & Chairman
An updated version of Hawk's corporate presentation will be available on April 29 on the corporation's website at www.hawkexploration.ca under Investor Info - Presentations.
Hawk is a newly formed company engaged in the exploration, development and production of conventional crude oil and natural gas in western Canada and is based in Calgary, Alberta. The Class A Shares and Class B Shares of Hawk trade on the TSX Venture Exchange under the trading symbols of HWK.A and HWK.B, respectively.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain statements contained in this press release constitute forward-looking statements. All forward-looking statements are based on the Corporation's beliefs and assumptions based on information available at the time the assumption was made. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Hawk believes the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct. Such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release
In particular, but without limiting the forgoing, this press release contains forward-looking statements pertaining to the following: the performance characteristics of Hawk's oil and natural gas properties; business strategies and plans; projections of market prices and cost; supply and demand for oil and natural gas; planned development of the Corporation's oil and natural gas properties; capital expenditure programs; and the expected sources of funding for the capital expenditure program.
The material factors and assumptions used to develop these forward looking statements include, but are not limited to: the ability of the Corporation to engage drilling contractors, to obtain and transport equipment, services, supplies and personnel in a timely manner and at an acceptable cost to carry out its activities and plans; the ability of the Corporation to market its oil and natural gas and to transport its oil and natural gas to market; the timely receipt of regulatory approvals and the terms and conditions of such approval; the ability of the Corporation to obtain drilling success consistent with expectations; and the ability of the Corporation to obtain capital to finance its exploration, development and operations.
Actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors including, without limitation: volatility in market prices for oil and natural gas; liabilities inherent in oil and natural gas operations; uncertainties associated with estimating oil and natural gas reserves; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions and exploration and development programs; geological, technical, drilling and processing problems; changes in tax laws and incentive programs relating to the oil and natural gas industry; failure to realize the anticipated benefits of acquisitions; general business and market conditions; and certain other risks detailed from time to time in Hawk's public disclosure documents (including, without limitation, the other factors discussed under "Risk Factors" in the Corporation's most recently filed Annual Information Form).
Statements relating to "reserves" or "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the resources and reserves described can be profitably produced in the future. Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Except as required under applicable securities laws, Hawk does not undertake any obligation to publicly update or revise any forward-looking statements.
Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil is based on an energy conversion method primarily applicable at the burner tip and is not intended to represent a value equivalency at the wellhead. All boe conversions in this press release are derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil. Certain financial amounts are presented on a per boe basis, such measurements may not be consistent with those used by other companies.
SOURCE Hawk Exploration Ltd.
For further information: For further information: Steve Fitzmaurice, President, CEO and Chairman, Tel: (403) 264-0191 Ext 225, Email: firstname.lastname@example.org; Dennis Jamieson, Chief Financial Officer, Tel: (403) 264-0191 Ext 234, Email: email@example.com