The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group

Hawk Announces 2012 Capital Budget and Guidance

Monday, December 19, 2011

Hawk Announces 2012 Capital Budget and Guidance19:07 EST Monday, December 19, 2011CALGARY, Dec. 19, 2011 /CNW/ - Hawk Exploration Ltd. ("Hawk" or the "Corporation") is pleased to announce that the Corporation's Board of Directors has approved a capital budget of approximately $8.5 million for 2012. The capital budget facilitates the drilling of twelve (5 - net) vertical heavy oil wells in the Epping, Edam and Hoosier area of western Saskatchewan and four (3.5 - net) horizontal wells targeting heavy oil in western Saskatchewan. At Seagram Lake, Hawk has budgeted for the drilling of one (0.5 - net) single leg horizontal well in the first half of 2012.Based on the approved capital budget, Hawk anticipates average annual production of approximately 530 boe/d with an exit rate of 650 boe/d and net debt at the end of 2012 of $3.8 million. The 2012 capital budget is expected to be funded by way of cash flow from operations and the Corporation's existing credit facility of $11 million, comprised of an $8.5 million revolving line of credit and a $2.5 million acquisition/development line of credit, of which only $0.7 million is currently drawn.The Corporation also recently participated in the drilling of a well in the Rainbow Lake area of northern Alberta. The well was drilled to its targeted depth but did not encounter an economic reservoir and was abandoned. Hawk has a 33.75 percent working interest in the well.Hawk is an emerging exploration 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 market prices and cost; supply and demand for oil and natural gas; planned development of the Corporation's oil and natural gas properties; the timing of and nature of capital expenditure program for 2012; and the expected sources of funding for the 2012 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.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