HAWK ANNOUNCES THIRD QUARTER 2010 FINANCIAL AND OPERATING RESULTS

CALGARY, Nov. 25 /CNW/ - Hawk Exploration Ltd. ("Hawk" or the "Corporation") announces its results for the three and nine months ended September 30, 2010. Selected financial and operational information for the three and nine months ended September 30, 2010 is provided as follows:

					Three months ended September 30,				Nine months ended September 30,
					2010		2009		2010		2009
Financial
Petroleum and natural gas revenue				$	1,512,288	$	42,677	$	5,254,421	$	42,677
Funds flow from (used in) operations ^(1)					737,811		(69,899)		2,359,543		(182,287)
	Per share ^(1)				0.02		(0.00)		0.07		(0.02)
Net loss					(49,177)		(44,623)		(186,691)		(159,421)
	Per share				(0.00)		(0.00)		(0.01)		(0.02)
Capital expenditures				$	3,255,709	$	1,975,781		10,263,340		2,206,106
Property acquisition					-		12,522,658		17,910		12,522,658
Working capital surplus, end of period									243,310		9,286,211
Total assets, end of period								$	27,669,669	$	25,751,301
Common shares outstanding, end of period:
	Class A Shares								21,980,953		21,980,953
	Class B Shares								1,080,000		1,080,000
	Options to acquire Class A Shares								2,076,500		1,010,000
Weighted average shares outstanding on a combined basis - basic & diluted^(2)					32,780,953		15,906,004		32,780,953		9,472,130
Operations
Production
	Crude oil and natural gas liquids (bbl/d)				254		8		275		2
	Natural gas (mcf/d)				226		-		289		-
	Total (boe/d)				291		8		324		2
Average Selling Price
	Crude oil and ngls (per bbl)			$	61.75	$	62.13	$	65.37	$	62.13
	Natural gas (per mcf)			$	3.53	$	-	$	4.23	$	-
	Total (per boe)			$	56.49	$	62.13	$	59.44	$	62.13
Operating netback (per boe at 6:1) ^(3)				$	31.57	$	16.24	$	31.85	$	16.24

⁽¹⁾ Management uses funds flow from operations to analyze operating performance, leverage and liquidity. Funds flow from operations as presented does not have any standardized meaning prescribed by Canadian GAAP and, therefore, may not be comparable with the calculation of similar measures by other entities.

⁽²⁾ Class B Shares were converted to Class A Shares at $1.00 per share.

⁽³⁾ 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 Canadian GAAP and therefore may not be comparable with the calculation of similar measures by other entities.

Highlights for the three months ended September 30, 2010 were as follows:

• Drilled five (3.7 net) wells resulting in four (2.7 net) producing oil wells, and one (1.0 net) dry hole,
• Shot or acquired approximately 40 kilometers of two dimensional seismic data in Hawk's core areas of east central Alberta and west central Saskatchewan,
• Reduced production costs to $12.57 per boe from $15.04 per boe in the second quarter of 2010,
• Reported funds flow from operations of $737,811 ($0.02 per share) in the third quarter of 2010, and
• Generated a strong operating netback of $31.57 per boe in the third quarter of 2010, despite lower realized commodity prices in the quarter.

Operations

During the third quarter of 2010, Hawk drilled five (3.7 net) wells resulting in four (2.7 net) oil wells and one (1.0 net) dry hole. At Dolcy in Alberta, the Corporation drilled two (2.0 net) infill development wells which were tied into Hawk's central battery during the fourth quarter which are producing at a combined rate of 30 bbl/d. Hawk also drilled one (1.0 net) exploration well at Dolcy, targeting a separate geological feature to the east of the main producing pool, which did not encounter economic quantities of oil and was subsequently abandoned.

At Epping in Saskatchewan, the Corporation drilled one (0.2 net) exploratory well resulting in a new Sparky oil discovery. The well was placed on production in August and has produced at an average rate of 40 (9.2 net) bbl/d. Hawk plans to follow up this discovery with additional development wells in 2011. Hawk also drilled one (0.5 net) horizontal exploration well which, subsequent to the end of the third quarter, was completed as an oil well. Hawk is encouraged by the initial production rates to date and is actively adding to its substantial land base in the area.

Production for the third quarter of 2010 averaged 291 boe/d a decrease from second quarter average production of 346 boe/d. During the drilling of the two infill development wells at Dolcy in the third quarter, production in the surrounding wells was shut in for approximately 10 days which negatively impacted production in the third quarter. Additionally, wet weather through much of the third quarter delayed field activities and production from new wells at Dolcy until the fourth quarter of 2010.

Financial

Despite lower production and lower commodity prices in the third quarter, Hawk was able to generate funds flow from operations of $737,811, only slightly lower than the $745,461 of funds flow generated in the second quarter of 2010. Hawk's production costs for the third quarter of 2010 averaged 12.57 per boe, a 16 percent decrease from the $15.04 per boe production costs experienced in the second quarter of 2010. These lower production costs, along with lower royalties, led to an operating netback of $31.57 per boe in the third quarter, a slight improvement over the second quarter operating netback of $30.14 per boe. Hawk had a $7.5 million credit facility with a Canadian bank that was undrawn at September 30, 2010. The credit facility was renewed at $7.5 million subsequent to the end of the third quarter with the next review to be conducted on or before May 31, 2011.

Outlook

The Corporation remains on track to incur qualified expenditures to meet its flow through obligation by December 31, 2010. Once Hawk's flow through commitment has been incurred, the Corporation plans to focus on the development of its most successful exploration discoveries and current development opportunities. Hawk believes this focus on development activity will lead to a more steady and consistent growth of its production base. Current production, based on field estimates, is approximately 400 boe/d. The Corporation plans to tie in one additional well prior to year end and expects its exit production rate to be approximately 450 boe/d, comprised mainly of crude oil.

Hawk is currently preparing its 2011 capital and operating budget. Details on the 2011 capital and operating for 2011 will be released at a later date, but Hawk intends to focus its capital budget on oil development opportunities. The Corporation continues to maintain a strong financial position with a working capital surplus of approximately $0.2 million at September 30, 2010 and an undrawn $7.5 million line of credit.

The unaudited financial statements and management's discussion and analysis for the interim period ended September 30, 2010 have been filed on SEDAR and are available for viewing at www.sedar.com or on the Corporation's website at www.hawkexploration.ca.

Hawk is a newly formed 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 production rates; supply and demand for oil and natural gas; planned development of the Corporation's oil and natural gas properties; capital expenditure programs; and the expected sources of funding for the 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.

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