CALGARY, Dec. 9 /CNW/ - Hawk Exploration Ltd. ("Hawk" or the "Corporation") is pleased to provide an operational update and announces its capital budget for 2011.

Operational Update

Hawk has recently participated in the drilling and completion of one (0.5 net) exploratory horizontal well in western Saskatchewan. Over the first month of production, the single leg horizontal well averaged over 80 (40 - net) bbl/d of heavy crude oil with an associated water cut of 45%. Based on Hawk's analysis, this discovery represents the first commercial production from this formation in western Saskatchewan and is a significant discovery for the Corporation. Although the production period is relatively short, Hawk is very encouraged with the results of the well to date and believes that this area will be a significant repeatable horizontal oil project for the Corporation.

This formation is a Devonian aged carbonate reservoir located at a relatively shallow depth with excellent permeability. No fracture stimulation of the reservoir was performed in the initial horizontal well nor is any expected in future wells. The shallow drilling depths, excellent reservoir permeability and the Saskatchewan crown royalty incentive on horizontal drilling (first 100,600 bbls at a crown royalty rate of 2.5%) gives this project very attractive economics.

The Corporation has assembled eleven (5.5 - net) sections of land in the area through crown land sales and by way of a farm-in agreement, all of which are considered to be prospective for development of this play. Full development of the play could see up to 16 horizontal legs drilled per section of prospective land. Hawk plans to start development of this play by drilling three (1.5 - net) dual-leg horizontal wells in the first quarter of 2011.

2011 Capital Budget

The Corporation's Board of Directors has approved a capital budget of approximately $9.5 million for 2011 which is expected to be funded by way of Hawk's existing credit facility and funds generated by operations. This budget will facilitate the drilling of six (3.0 - net) dual-leg horizontal development wells and five (4.2 net) vertical development wells, all in western Saskatchewan. With this budget, the Corporation is forecasting average production of 560 boe/d for 2011 with a year end exit rate of 680 boe/d, with oil comprising over 85 percent of both volumes.

Hawk is an emerging 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; planned development of the Corporation's oil and natural gas properties; future capital expenditure programs; expected sources of funding for future capital expenditures programs; and expected 2011 average and year-end exit production rates.

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.

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  Dennis Jamieson
President, CEO and Chairman  Chief Financial Officer
Tel: (403) 264-0191 Ext 225  Tel: (403) 264-0191 Ext 234
Email: steve@hawkexploration.ca           Email: dennis@hawkexploration.ca

Organization Profile

Hawk Exploration Ltd.

More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890