CALGARY, Dec. 17, 2014 /CNW/ – Hawk Exploration Ltd. (“Hawk” or the “Corporation“) is pleased to announce an operational update and provide guidance on the Corporation’s 2015 capital budget.
Hawk drilled three (3.0 net) oil wells in western Saskatchewan in the fourth quarter of 2014 all of which are now currently on production. At Rush Lake, the Corporation drilled one (1.0 net) slant well in the fourth quarter of 2014 which encountered oil pay in the Waseca and Sparky/GP formations. This well is directly offsetting an existing Sparky/GP pool and a proposed SAGD thermal development in the Sparky/GP formation. Hawk’s well has been on production since the start of December 2014 from the Sparky/GP formation and is currently averaging approximately 55 barrels of oil per day (“bopd”).
At Eureka, the Corporation drilled its first horizontal well (1.0 net) on its developing Basal Mannville play. This well has been on production for approximately three weeks and is currently producing 60 bopd. Hawk is very encouraged by this initial production rate and is evaluating future drilling plans using horizontal wells to fully develop the Corporation’s land in this area. The producing horizontal well was drilled on crown acreage and is eligible for a crown royalty holiday of 2.5 percent on the first 38,000 barrels of produced oil. Hawk expects to drill an additional well in the first quarter of 2015 to evaluate the potential on the northern portion of the play.
Lastly, at Yonker, the Corporation drilled a McLaren discovery well that encountered three metres of net pay. This well has been placed on production and is currently producing 65 bopd. Hawk plans to acquire some additional two dimensional seismic data on this play in the first quarter of 2015 and expects to drill further development wells on this play in the second half of 2015.
First Half 2015 Capital Budget
The Corporation has set a first half 2015 budget that will see Hawk drill two (2.0 net) vertical wells in western Saskatchewan both of which are expected to be drilled in the first quarter of 2015. Hawk is planning on drilling its second earning well at Forest Bank in the first quarter of 2015 whereby Hawk will pay 100% of the capital costs of the earning well to earn a 65% working interest in one section of land at Forest Bank. The Corporation’s first earning well at Forest Bank is currently producing 65 (42 net) bopd. The Corporation also plans to drill one vertical well at Eureka which will earn the Corporation a 100% working interest in 480 acres of land. Hawk has chosen to decelerate drilling on our current prospects, but is taking advantage of the current low price environment to drill two wells that earn significant additional acreage and add to our inventory of future opportunities. These wells are Hawk’s only remaining commitment locations.
Hawk will determine its second half 2015 capital budget during the second quarter of 2015 which will be dependent on the oil price forecast for the second half of 2015. Hawk will remain disciplined and flexible with its second half 2015 capital budget as it monitors oil prices and business conditions.
The Corporation has developed an inventory of development drilling at its four core areas of Forest Bank, Rush Lake, Eureka and Yonker, all in western Saskatchewan for the second half of 2015 and into 2016. The Corporation has also identified several well recompletion candidates at Forest Bank where the Corporation anticipates it can add production with low capital costs and anticipates one (0.65 net) recompletion in the first and second quarter of 2015.
All of the Corporation’s planned capital projects for 2015 are operated and controlled by Hawk. The Corporation will control the pace of development of its projects and accelerate or delay capital spending depending on the price of oil and the Corporation’s cash flow.
Updated Corporate Presentation
An updated corporate presentation is available for viewing on the Corporation’s website at www.hawkexploration.ca under Investor Info – 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 of Hawk trade on the TSX Venture Exchange under the trading symbols of HWK.A.
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 the first half of 2015;and the expected sources of funding for the 2015 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.
SOURCE Hawk Exploration Ltd.
For further information: Steve Fitzmaurice, President, CEO and Chairman, Tel: (403) 264-0191 Ext 225, Email: email@example.com; Dennis Jamieson, Chief Financial Officer, Tel: (403) 264-0191 Ext 234, Email: firstname.lastname@example.org