Hawk Announces First Quarter 2012 Results
24 Mayo 2012 - 2:24AM
PR Newswire (Canada)
CALGARY, May 25, 2012 /CNW/ - Hawk Exploration Ltd. ("Hawk" or the
"Corporation") announces its results for the three months ended
March 31, 2012. Selected financial and operational information for
the three months ended March 31, 2012 are provided as follows:
Three monthsendedMarch31, 2012 2011 % Change Financial ($000's
exceptper share amounts) Petroleum and natural gas sales $ 2,889 $
2,242 29% Funds flow from operations (1) 1,461 863 69% Per share
0.04 0.03 33% Comprehensive income (loss) 509 (133) 483% Per share
0.01 (0.01) 200% Capital expenditures (2) 2,278 643 254% Working
capital deficit - excluding bank debt and commodity contracts, end
of period(3) $ 1,857 $ 1,218 52% Bank debt, end of period - 2,550
(100%) Total assets, end of period $ 29,588 25,803 15% Common
Shares outstanding end of period: Class A Shares 34,481 21,981 57%
Class B Shares 1,080 1,080 0% Options to acquire Class A Shares
2,110 2,110 0% Operations Production Crude oil and natural gas
liquids (bbl/d) 402 348 16% Natural gas (mcf/d) 188 388 (52%) Total
(boe/d) 434 413 5% Oil and liquids as percent of total 93% 84% 9%
Average SellingPrice Crude oil and ngls (per bbl) $ 77.91 $ 67.15
16% Natural gas (per mcf) 2.19 3.96 (45%) Total (per boe) $ 73.23 $
60.35 21% Operating netback (per boe at 6:1) (4) Price $ 73.23 $
60.35 21% Royalties (15.48) (10.88) 42% Production expense (17.48)
(18.53) (6%) Transportation expense (2.13) (1.67) (28%) Operating
netback ($/boe) $ 38.14 $ 29.27 30% ((1) )Management uses funds
flow from operations and funds flow from operations per share to
analyze operating performance, leverage and liquidity. Funds flow
from operations and funds flow from operations per share as
presented do not have any standardized meaning prescribed under
Generally Accepted Accounting Principles ("GAAP") and therefore may
not be comparable with the calculation of similar measures by other
entities. ((2)) Capital expenditures include cash exploration and
evaluation expenditure plus cash property, plant and equipment net
of dispositions and exclude asset retirement obligations and
capitalized share-based payments. ((3) )Working capital is a
non-GAAP measure that includes trade and other accounts receivable,
prepaid expenses, and trade and other accounts payables. ((4)
)Management considers operating netbacks as an important measure as
it demonstrates profitability relative to current commodity prices.
Operating netbacks do not have a standardized meaning prescribed by
GAAP and therefore may not be comparable with the calculation of
similar measures by other entities. HIGHLIGHTS Highlights for the
three months ended March 31, 2012 were as follows: -- Achieved
record quarterly funds flow from operations of $1.5 million in the
first quarter of 2012, a 69% increase from the $0.9 million in the
first quarter of 2011; -- Recorded net income of $0.5 million in
the first quarter of 2012 compared to a net loss of $0.1 million in
Q1 2011; -- Improved operating netbacks by 30% to $38.14 in Q1 2012
from $29.27 per boe in the first quarter of 2011 and by 12%
compared to the fourth quarter of 2012 netback of $34.09 per boe;
-- Averaged 434 boe/d of production for the first quarter of 2012,
a 5% increase over Q1 2011 with oil production increasing by 16%;
-- Increased the oil weighting as a percent of total production to
93% for the first quarter of 2012 from 84% in Q1 2011; -- Drilled,
completed and commenced production on seven (2.4 net) oil wells in
the first quarter of 2012 in western Saskatchewan; -- Completed
three seismic programs in western Saskatchewan in the first quarter
of 2012 to delineate drilling locations for later in 2012; and --
Subsequent to March 31, 2012, increased the revolving credit demand
facility from $8.5 million to $12 million. Operational Update In
the first quarter of 2012, Hawk drilled seven (2.4 net) wells
resulting in seven (2.4 net) producing oil wells in its core area
of western Saskatchewan. At Silverdale, the Corporation drilled six
(1.4 net) wells targeting the Sparky formation, with all six (1.4
net) being completed and on production prior to end of the first
quarter. These six (1.4 net) wells are currently producing
approximately 275 (63 net) bbl/d of oil. To date in the second
quarter of 2012, Hawk has drilled an additional two (1.0 net) wells
on this play at Silverdale and expects to have these completed and
on production by the end of the second quarter. Two (0.5 net)
additional wells at Silverdale are expected to be drilled in the
second quarter once weather conditions permit. Hawk also drilled
one (1.0 net) successful well at Edam in the first quarter of 2012
targeting the Waseca formation. This well was completed and is
currently producing approximately 35 (35 net) bbl/d of oil. The
Corporation was also active in the first quarter 2012, conducting
three separate seismic programs at Dankin, Carruthers, and
Prairiedale, all in western Saskatchewan. These seismic programs
have all been processed and interpreted and were used to delineate
horizontal drilling locations at Dankin and Carruthers which are
expected to be drilled later in 2012. Financial Hawk achieved
record quarterly funds flow from operations in the first quarter of
2012 of approximately $1.5 million compared to $0.9 million for the
first quarter of 2011. The Corporation continues to generate strong
operating netbacks which averaged $38.14 per boe in the first
quarter of 2012, 30 percent higher than the operating netback for
the first quarter of 2011 of $29.27 per boe. This increase in
operating netbacks is attributable to higher realized oil prices
offset slightly by higher royalty costs. At March 31, 2012, Hawk
had existing credit facilities of $11 million consisting of an $8.5
million revolving line of credit and a $2.5 million acquisition and
development line of credit, which was undrawn. Subsequent to March
31, 2012, the revolving line of credit was increased from $8.5
million to $12 million with the next review to occur prior to
October 1, 2012. The Corporation continues to maintain a solid
balance sheet with net debt and working capital deficit of
approximately $1.9 million at March 31, 2012 which equates to a net
debt to annual funds flow from operations of 0.3:1. Outlook The
Corporation has set an $8.5 million capital budget for 2012 that
will focus on development opportunities in western Saskatchewan
targeting heavy crude oil both through horizontal and vertical
drilling. Hawk has an active summer planned as it expects to drill
three (2.5 net) horizontal wells at Seagram Lake, Carruthers and
Dankin in Western Saskatchewan targeting heavy oil during the
second and third quarters of 2012. The capital budget is expected
to be funded by way of cash flow from operations and from the
recently expanded revolving line of credit. As previously
disclosed, Hawk expects second quarter 2012 production to average
approximately 500 boe/d weighted 94 percent to crude oil. Annual
General Meeting Hawk's annual general meeting of shareholders will
be held on Tuesday, June 12, 2011 at 3:00 pm in the R.G. Black
Boardroom at the offices of McCarthy Tetrault LLP, Suite 3300,
421-7th Avenue SW, Calgary, AB. 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;
capital expenditure programs for the remainder of 2012; the timing
of and nature of capital expenditure program for 2012;expected
second quarter 2012 production rates; 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. Hawk Exploration Ltd. CONTACT: Steve
Fitzmaurice President, CEO and ChairmanTel: (403) 264-0191 Ext
225Email: steve@hawkexploration.caDennis JamiesonChief Financial
OfficerTel: (403) 264-0191 Ext 234Email: dennis@hawkexploration.ca
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