HAWK PROVIDES OPERATIONAL UPDATE AND 2011 CAPITAL BUDGET
December 09 2010 - 6:02PM
PR Newswire (Canada)
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
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