FIELD ACTIVITIES / Hawk Oil Company Strikes Strategic Alliance
HAWK OIL INC. - 65,000 ACRE STRATEGIC ALLIANCE FOR GAS EXPLORATION -
EAST CENTRAL ALBERTA
Date: 7/21/98 5:17:28PM
Stock Symbol: HWK.B
Hawk Oil Inc. is pleased to announce that it has negotiated a
strategic alliance under two separate agreements with PanCanadian
Petroleum Limited and AltaGas. The first agreement, with
PanCanadian (the "Exploration and Development Agreement"), grants
Hawk the right to explore and farmin, for gas rights only from
surface to basement, on a block of land comprising over 65,000
undeveloped acres (in excess of 100 sections). These fee simple
lands are highly gas prone and located in east central Alberta.
The Company also has the right to earn additional acreage from
PanCanadian where only partial gas rights are available. The
Exploration and Development Agreement also establishes an 800,000
acre (1260 sections) Area of Mutual Interest. The second
agreement, with AltaGas (the "Tie In and Processing Agreement"),
gives Hawk access to AltaGas' facilities within the Area of
Mutual Interest. These agreements offer Hawk very favorable
exploration and processing terms.
The lands are located in close proximity to prolific, multi-zone
gas wells and an extensive and under utilized gas infrastructure
system. Under the terms of the Exploration and Development
Agreement Hawk will evaluate and re-work approximately 1100 km.
of PanCanadian seismic data prior to September 1, 1998 and then
may elect to drill at least five gas wells on or before January
31, 1999. The agreement also includes two additional option
periods between January 31, 1999 and December 31, 2000 whereby
Hawk can earn additional lands through drilling. The Company
will be drilling its wells at 100% working interest.
This land base is ideally suited for Hawk's growth strategy as it
offers prospects with multi-zone potential. Offset wells are
producing gas from the Viking, Colony, McLaren, Sparky,
Glauconite, Basal Quartz, Camrose and Nisku formations. These
drilling prospects can be readily identified with modern seismic
techniques, can be drilled and operated in a low cost structure
and can be quickly tied into the existing infrastructure. The
land block is being actively explored as offsetting competitors
have licensed 26 wells in the last year alone.
Under the Tie In and Processing Agreement Hawk receives firm
gathering and processing service for gas production from wells
within the Area of Mutual Interest at a very reasonable fixed
fee. This arrangement enables Hawk to dedicate the majority of
its 1998 capital budget on drilling.
Hawk has recently formed a second core gas area in the Cardiff
region in west central Alberta where the Company has quietly been
accumulating a land position. Hawk now controls approximately
2500 acres in this active gas prone area and has finished
shooting and analyzing an extensive seismic program. The Company
will be drilling between two and four high working interest wells
before year-end.
Hawk further announces that it has extended the expiry date on
its listed Class A Share Purchase Warrants to December 18, 1998.
The Class A Share Purchase Warrants are listed and posted for
trading on The Alberta Stock Exchange under the symbol
"HWK.WT.A", and were to expire on September 18, 1998.
Hawk Oil Inc. is a Calgary based oil and gas exploration company.
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