Hawk Exploration Ltd. (“Hawk” or the “Corporation”) is pleased to provide an operational update. Hawk’s fourth quarter 2012 production averaged approximately 590 boe/d, a 36% increase from the fourth quarter of 2011 while current production is approximately 600 boe/d weighted 95% to crude oil.
Most of the Corporation’s oil production is considered heavy oil and, as such, is subject to the current wide differentials (the price difference between Western Canadian Select (“WCS”) and West Texas Intermediate) of over $30 per bbl. Hawk’s budget for 2013 was based on a WCS price of $67.50 per bbl while current quoted WCS prices are trading at approximately $65.00 per bbl, but are expected to remain volatile. Hawk plans to monitor the impact of these differentials on the Corporation’s cash flow and, if necessary, will adjust capital spending to maintain its strong financial position.
The Corporation is planning an active drilling program in the first quarter of 2013 and expects to drill five (4.0 net) vertical wells targeting heavy oil at Silverdale and Dulwich in western Saskatchewan in the first quarter of 2013. Hawk expects to drill three (2.0 net) vertical wells at Silverdale targeting the Sparky formation delineated from three dimensional seismic data shot in the fourth quarter of 2012. Hawk has also recently completed three separate two dimensional seismic programs in western Saskatchewan and eastern Alberta which are expected to lead to vertical oil drilling in the second and third quarters of 2013. The five (4.0 net) well vertical drilling program is anticipated to start later in February, depending on rig availability.
An updated corporate presentation is available for viewing on the Corporation’s website at www.hawkexploration.ca under Investor Information – Presentation.
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: projections of market prices including heavy oil differentials and cost; planned development of the Corporation’s oil and natural gas properties; and the expected timing and nature of the planned drilling activities and 2013 capital 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.