HWK.A

CALGARY, March 28 /CNW/ -- CALGARY, March 28 /CNW/ - Hawk Exploration Ltd. ("Hawk" or the "Corporation") is pleased to provide a summary of its December 31, 2010 reserve information as evaluated by GLJ Petroleum Consultants Ltd. ("GLJ"). HIGHLIGHTS - Proved plus probable reserves increased by 50 percent to 1.4 million barrel of oil equivalent ("Boe") at December 31, 2010 from 0.9 million boe in 2009. - Crude oil and natural gas liquids comprised 81 percent of proved plus probable reserves. - At Seagram Lake in Western Saskatchewan, GLJ assigned proved plus probable reserves of 61,600 bbls (30,800 - net) to Hawk's producing Leduc horizontal oil well. - GLJ assigned one (0.5 net) proved undeveloped dual-leg horizontal location and two (1.0 net) probable dual-leg horizontal locations at Seagram Lake in the Leduc formation each with proved plus probable reserves of 130,000 bbls (65,000 - net). OPERATIONS Through 2009 and 2010, Hawk focused almost entirely on drilling exploratory oil opportunities in order to satisfy its $12 million flow through commitment. With this commitment fulfilled, Hawk intends to shift its focus to the development of its oil properties. Hawk has assembled approximately 35,000 net acres of undeveloped land within its core areas of eastern Alberta and west central Saskatchewan which supports a large inventory of horizontal and vertical oil drilling locations. At Seagram Lake in western Saskatchewan, the Corporation has acquired twelve sections (6 net) or 7,680 acres (3,840 net) of land adjacent to its producing horizontal well. The Corporation has recently received licenses for three (1.5 net) dual-leg horizontal wells to be drilled in the second quarter of 2011 following spring break-up. Based on mapping of the Leduc formation over its existing land base and with continued drilling success, Hawk could potentially drill up to 50 (25 - net) additional dual-leg horizontal locations on this play. During the first quarter of 2011, Hawk drilled one (1.0 net) vertical oil well in the Edam area of western Saskatchewan. The well is expected to be completed in the Waseca formation in the second quarter of 2011 following spring break-up. The Corporation plans to drill three (2.2 net) vertical oil wells during the summer of 2011 in the Edam, Silverdale and Hoosier areas of western Saskatchewan. Production for the first quarter of 2011 is expected to average approximately 400 boe/d with current production averaging approximately 450 boe/d. Hawk's producing gas well in the Hoosier area of Saskatchewan was shut-in for 5 weeks by the plant operator which negatively impacted production in the first quarter of 2011 by approximately 35 boe/d. This well was back on production in March 2011. RESERVES GLJ prepared an independent engineering report in accordance with National Instrument 51-101 ("NI 51-101") with an effective date of December 31, 2010 (the "GLJ Report"). The tables below are a summary of the oil, NGL and natural gas reserves attributable to the Corporation and the net present value of future net revenue attributable to such reserves as evaluated in the GLJ Report. The net present value of future net revenue attributable to reserves is stated without provision for interest costs and general and administrative costs, but after providing for estimated royalties, production costs, development costs, other income, future capital expenditures and well abandonment costs for only those wells assigned reserves by GLJ. It should not be assumed that the undiscounted or discounted net present value of future net revenue attributable to reserves estimated by GLJ represents the fair market value of those reserves. Other assumptions and qualifications relating to costs, prices for future production and other matters are summarized herein. The recovery and reserve estimates of oil, NGL and natural gas reserves provided herein are estimates only. Actual reserves may be greater than or less than the estimates provided herein. The reserve data provided in this press release only represents a summary of the disclosure required under NI 51-101. Additional reserves disclosure will be provided in the Corporation's Annual Information Form to be filed on SEDAR (www.sedar.com) on or before April 30, 2011. Summary of Oil and Gas Reserves as of December 31, 2010 Reserves Summary ------------------------------------------------------------------------- Natural Gas Total Oil Oil Natural Gas Liquids Equivalent ------------ ------------ ------------ ------------ Reserves Gross Net Gross Net Gross Net Gross Net Category (Mbbl) (Mbbl) (MMcf) (MMcf) (Mbbl) (Mbbl) (Mboe) (Mboe) ------------------------------------------------------------------------- Proved Developed Producing 498 423 465 349 11 9 587 491 Undeveloped 136 112 87 69 4 3 154 126 ------------------------------------------------------------------------- Total Proved 635 535 552 418 15 12 742 617 Probable 459 393 976 624 6 5 628 501 ------------------------------------------------------------------------- Total Proved plus Probable 1,095 928 1,528 1,043 21 16 1,370 1,118 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Net Present Value Summary as of December 31, 2010 Unit Value Net Present Value of Future Net Before Income Revenue Before Income Taxes Tax Discounted Discounted At (%/year) at 10%/year --------------------------------------- -------------- Reserves 0% 5% 10% 15% 20% Category M$ M$ M$ M$ M$ $/boe ------------------------------------------------------------------------- Proved Developed Producing 20,017 17,717 15,955 14,558 13,422 27.18 Undeveloped 4,770 3,857 3,231 2,728 2,334 20.98 ------------------------------------------------------------------------- Total Proved 24,787 21,604 19,185 17,286 15,757 25.86 Probable 19,583 13,318 9,866 7,699 6,212 15.71 ------------------------------------------------------------------------- Total Proved plus Probable 44,370 34,922 29,051 24,985 21,969 21.20 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Total Future Net Revenue (Undiscounted) as of December 31, 2010 Future Net Capital Revenue Operat- Develo- Aband- Before Royal- ing pment onment Income Reserves Revenue ties Cost Costs Costs Tax Category M$ M$ M$ M$ M$ M$ ------------------------------------------------------------------------- Total Proved 50,724 8,021 15,856 1,350 710 24,787 Total Proved plus Probable 94,158 15,850 29,003 4,049 885 44,370 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Summary of Forecast Pricing and Inflation Assumptions The GLJ Report used the following prices, exchange rates, and inflation rate assumptions as of December 31, 2010: Edmonton WTI 40 degree Lloyd Cushing API Blend at AECO - Exchange Oklahoma Crude Oil Hardisty NIT Spot Inflation Rate Year ($US/bbl) ($Cdn/bbl) ($Cdn/bbl)($Cdn/mmbtu) Rate % ($US/$Cdn) ------------------------------------------------------------------------- 2011 88.00 86.22 74.58 4.16 2.0 0.98 2012 89.00 89.29 74.55 4.74 2.0 0.98 2013 90.00 90.92 73.73 5.31 2.0 0.98 2014 92.00 92.96 74.83 5.77 2.0 0.98 2015 95.17 96.19 77.44 6.22 2.0 0.98 2016 97.55 98.62 79.39 6.53 2.0 0.98 2017 100.26 101.39 81.62 6.76 2.0 0.98 2018 102.74 103.92 83.65 6.90 2.0 0.98 2019 105.45 106.68 85.88 7.06 2.0 0.98 2020 107.56 108.84 87.61 7.21 2.0 0.98 Escalated at 2.0 % per year thereafter. FINDING, DEVELOPMENT AND ACQUISITION COSTS (1) ------------------------------------------------------------------------- ------------------------------------------------------------------------- Two Year 2010 2009 Average --------------- --------------- --------------- Proved Proved Proved plus plus plus Proved Probable Proved Probable Proved Probable ------------------------------------------------------------------------- ------------------------------------------------------------------------- Exploration and development costs (M$)(2) 15,280 15,280 4,163 4,163 19,443 19,443 Acquisitions (M$)(2) - - 12,621 12,621 12,621 12,621 Change in future development cost (M$) Exploration and development 936 3,211 - 23 936 3,234 Acquisitions - - 414 815 414 815 Net reserve additions and revisions (Mboe) Exploration and development 268 573 75 125 343 698 Acquisitions - - 553 826 553 826 ------------------------------------------------------------------------- 268 573 628 951 896 1,524 ------------------------------------------------------------------------- Finding, Development and Acquisition costs - including future development cost ($/boe) Exploration and development 60.50 32.27 55.65 33.41 59.45 32.47 Acquisitions - - 23.58 16.27 23.58 16.27 ------------------------------------------------------------------------- Total FD&A costs ($/boe) 60.50 32.27 27.40 18.53 37.30 23.70 ------------------------------------------------------------------------- ------------------------------------------------------------------------- (1) The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total finding and development costs related to reserve additions for that year. (2) The Corporation's annual audit of the 2010 financial statements has not been completed and accordingly all financial amounts are management's best estimates which are unaudited and subject to change. NET ASSET VALUE ------------------------------------------------------------------------- ------------------------------------------------------------------------- M$, except per share amounts December 31, 2010 ------------------------------------------------------------------------- Proved plus probable reserves discounted at 10% (before taxes) 29,051 Undeveloped land(1) 4,396 Net debt(2) (3,989) Proceeds from dilutive options 1,446 ------------------------------------------------------------------------- Net asset value 30,904 Fully diluted Class A shares outstanding (000's)(3) 24,090 Net asset value per fully diluted Class A share $1.28 ------------------------------------------------------------------------- Fully diluted Class A and Class B shares outstanding (000's)(4) 34,890 Net asset value per fully diluted Class A and Class B shares $0.89 ------------------------------------------------------------------------- (1) Undeveloped land is based on management internal estimate at December 31, 2010. Hawk had a total of 35,143 net acres of land at December 31, 2010 assessed at an average value of approximately $125 per net acre. (2) The Corporation's annual audit of the 2010 financial statements has not been completed and accordingly all financial amounts are management's best estimates which are unaudited and subject to change. (3) Includes Class A shares outstanding at December 31, 2010 of 21,980,953 plus dilutive options of 2,109,500. (4) For purposes of this calculation, Class B shares were converted to Class A shares at $1.00 per share such that the 1,080,000 Class B shares outstanding at December 31, 2010 were converted into 10,800,000 Class A shares. LAND HOLDINGS ------------------------------------------------------------------------- ------------------------------------------------------------------------- Developed Undeveloped Total --------------- --------------- --------------- Acres Gross Net Gross Net Gross Net ------------------------------------------------------------------------- ------------------------------------------------------------------------- Alberta 1,840 1,836 24,463 23,311 26,303 25,147 Saskatchewan 1,750 1,363 14,845 11,552 16,595 12,915 Manitoba - - 280 280 280 280 ------------------------------------------------------------------------- Total 3,590 3,199 39,588 35,143 43,178 38,342 ------------------------------------------------------------------------- ------------------------------------------------------------------------- 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: the volumes and estimated value of the Corporation's oil and gas reserves; future oil and natural gas prices; future costs, expenses, royalty rates and the exchange rate between the $US and $CAD; supply and demand for oil and natural gas; planned development of the Corporation's oil and natural gas properties; and future capital expenditure programs. 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. 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. Steve Fitzmaurice, President, CEO and Chairman, Tel: (403) 264-0191 Ext 225, Email: steve@hawkexploration.ca; Dennis Jamieson, Chief Financial Officer, Tel: (403) 264-0191 Ext 234, Email: dennis@hawkexploration.ca

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