Hawk Exploration Ltd. (TSXV:HWK.A)
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CALGARY, Dec. 9 /CNW/ --
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.
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/December2010/09/c4148.html
table border="0" valign="top"trtdbSteve Fitzmaurice /b/td tdbDennis Jamieson/b/td/tr trtdPresident, CEO and Chairman /td tdChief Financial Officer/td/tr trtdTel: (403) 264-0191 Ext 225 /td tdTel: (403) 264-0191 Ext 234/td/tr trtdEmail: a href="mailto:steve@hawkexploration.ca"steve@hawkexploration.ca/aa cr="true" /a/td tdEmail: a href="mailto:dennis@hawkexploration.ca"dennis@hawkexploration.ca/a/td/tr/table