HAWK ANNOUNCES THIRD QUARTER 2010 FINANCIAL AND OPERATING RESULTS

CALGARY, Nov. 25 /CNW/ -- 
CALGARY, Nov. 25 /CNW/ - Hawk Exploration Ltd. ("Hawk" or the
 "Corporation") announces its results for the three and nine months
 ended September 30, 2010. Selected financial and operational
 information for the three and nine months ended September 30, 2010 is
 provided as follows:






                        Three months ended         Nine months ended
                             September 30,             September 30,

                         2010         2009         2010         2009

Financial

Petroleum and    $
natural gas         1,512,288 $     42,677 $  5,254,421 $     42,677
revenue

Funds flow
from (used in)        737,811     (69,899)    2,359,543    (182,287)
operations (
(1))

 Per share (             0.02       (0.00)         0.07       (0.02)
 (1))

Net loss             (49,177)     (44,623)    (186,691)    (159,421)

 Per share             (0.00)       (0.00)       (0.01)       (0.02)

Capital          $  3,255,709 $  1,975,781   10,263,340    2,206,106
expenditures

Property                    -   12,522,658       17,910   12,522,658
acquisition

Working
capital                                         243,310    9,286,211
surplus, end
of period

Total assets,                              $ 27,669,669 $ 25,751,301
end of period

Common shares
outstanding,
end of period:

 Class A                                     21,980,953   21,980,953
 Shares

 Class B                                      1,080,000    1,080,000
 Shares

 Options to
 acquire Class                                2,076,500    1,010,000
 A Shares

Weighted
average shares
outstanding on
a combined
basis - basic
& diluted((2))     32,780,953   15,906,004   32,780,953    9,472,130

Operations

Production

 Crude oil and
 natural gas              254            8          275            2
 liquids
 (bbl/d)

 Natural gas              226            -          289            -
 (mcf/d)

 Total (boe/d)            291            8          324            2

Average
Selling Price

 Crude oil and
 ngls (per       $      61.75 $      62.13 $      65.37 $      62.13
 bbl)

 Natural gas     $       3.53 $          - $       4.23 $          -
 (per mcf)

 Total (per      $      56.49 $      62.13 $      59.44 $      62.13
 boe)

Operating
netback (per
boe at 6:1) (
(3))             $      31.57 $      16.24 $      31.85 $      16.24





((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 at $1.00 per share.


((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.


Highlights for the three months ended September 30, 2010 were as
 follows:


    --  Drilled five (3.7 net) wells resulting in four (2.7 net)
        producing oil wells, and one (1.0 net) dry hole,
    --  Shot or acquired approximately 40 kilometers of two dimensional
        seismic data in Hawk's core areas of east central Alberta and
        west central Saskatchewan,
    --  Reduced production costs to $12.57 per boe from $15.04 per boe
        in the second quarter of 2010,
    --  Reported funds flow from operations of $737,811 ($0.02 per
        share) in the third quarter of 2010, and
    --  Generated a strong operating netback of $31.57 per boe in the
        third quarter of 2010, despite lower realized commodity prices
        in the quarter.



Operations


During the third quarter of 2010, Hawk drilled five (3.7 net) wells
 resulting in four (2.7 net) oil wells and one (1.0 net) dry hole. At
 Dolcy in Alberta, the Corporation drilled two (2.0 net) infill
 development wells which were tied into Hawk's central battery during
 the fourth quarter which are producing at a combined rate of 30 bbl/d.
 Hawk also drilled one (1.0 net) exploration well at Dolcy, targeting a
 separate geological feature to the east of the main producing pool,
 which did not encounter economic quantities of oil and was subsequently
 abandoned.


At Epping in Saskatchewan, the Corporation drilled one (0.2 net)
 exploratory well resulting in a new Sparky oil discovery. The well was
 placed on production in August and has produced at an average rate of
 40 (9.2 net) bbl/d. Hawk plans to follow up this discovery with
 additional development wells in 2011. Hawk also drilled one (0.5 net)
 horizontal exploration well which, subsequent to the end of the third
 quarter, was completed as an oil well. Hawk is encouraged by the
 initial production rates to date and is actively adding to its
 substantial land base in the area.


Production for the third quarter of 2010 averaged 291 boe/d a decrease
 from second quarter average production of 346 boe/d. During the
 drilling of the two infill development wells at Dolcy in the third
 quarter, production in the surrounding wells was shut in for
 approximately 10 days which negatively impacted production in the third
 quarter. Additionally, wet weather through much of the third quarter
 delayed field activities and production from new wells at Dolcy until
 the fourth quarter of 2010.


Financial


Despite lower production and lower commodity prices in the third
 quarter, Hawk was able to generate funds flow from operations of
 $737,811, only slightly lower than the $745,461 of funds flow generated
 in the second quarter of 2010. Hawk's production costs for the third
 quarter of 2010 averaged 12.57 per boe, a 16 percent decrease from the
 $15.04 per boe production costs experienced in the second quarter of
 2010. These lower production costs, along with lower royalties, led to
 an operating netback of $31.57 per boe in the third quarter, a slight
 improvement over the second quarter operating netback of $30.14 per
 boe. Hawk had a $7.5 million credit facility with a Canadian bank that
 was undrawn at September 30, 2010. The credit facility was renewed at
 $7.5 million subsequent to the end of the third quarter with the next
 review to be conducted on or before May 31, 2011.


Outlook


The Corporation remains on track to incur qualified expenditures to meet
 its flow through obligation by December 31, 2010. Once Hawk's flow
 through commitment has been incurred, the Corporation plans to focus on
 the development of its most successful exploration discoveries and
 current development opportunities. Hawk believes this focus on
 development activity will lead to a more steady and consistent growth
 of its production base. Current production, based on field estimates,
 is approximately 400 boe/d. The Corporation plans to tie in one
 additional well prior to year end and expects its exit production rate
 to be approximately 450 boe/d, comprised mainly of crude oil.


Hawk is currently preparing its 2011 capital and operating budget.
 Details on the 2011 capital and operating for 2011 will be released at
 a later date, but Hawk intends to focus its capital budget on oil
 development opportunities. The Corporation continues to maintain a
 strong financial position with a working capital surplus of
 approximately $0.2 million at September 30, 2010 and an undrawn $7.5
 million line of credit.


The unaudited financial statements and management's discussion and
 analysis for the interim period ended September 30, 2010 have been
 filed on SEDAR and are available for viewing at www.sedar.com or on the Corporation's website at www.hawkexploration.ca.


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 production rates; 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.




p/p table border="0" valign="top"trtdbSteve Fitzmaurice /bbr/ President, CEO and Chairman br/ Tel: [phone] Ext 225 br/ Email: a href="mailto:[e-mail]"[e-mail]/a /td td /td td /td td /td td /td td /td td /td td /td td /td td /td tdbDennis Jamieson/bbr/ Chief Financial Officerbr/ Tel: [phone] Ext 234br/ Email: a href="mailto:[e-mail]"[e-mail]/a/td/tr/table

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