Year End Financials (HWK trading 2x trailing cfps) Hawk (hwk.a) recently reported its year end financials, affirming its undervalued status trading at 2 times trailing 2013 cash flow per share of 0.18. Comments below courtesy of rodball (another site)...
Highlights include:
- cash flow per year of 0.18 / share (2 times current sp of 0.365)
- annual production increase of 25% to 637 boepd from 510 boepd in 2012
- Q1 production of 700 boepd
- reported a loss over year of 0.04 / share compared to 0.00 in 2012, predominantly from lower operating netbacks in Q4...since then WCS for heavy oil has increased
See below for details.
2014-04-17 20:32 ET - News Release
Mr. Steve Fitzmaurice reports
HAWK ANNOUNCES 2013 ANNUAL RESULTS AND FILING OF RESERVES DATA
Hawk Exploration Ltd. has filed on SEDAR its audited annual financial statements, and related management's discussion and analysis. The corporation also filed its annual information form for the period ended Dec. 31, 2013, containing the corporation's statement of reserves data, and other oil and gas information, as of Dec. 31, 2013, as mandated by National Instrument 51-101, standards of disclosure for oil and gas activities, of the Canadian Securities Administrators. Copies of these filings can be found on SEDAR or on the corporation's website under investor info, financial reports.
Highlights for the year ended Dec. 31, 2013, were as follows:
- Increased annual production by 25 per cent to average 637 barrels of oil equivalent per day of production in 2013, from 510 barrels of oil equivalent per day in 2012;
- Increased fourth quarter 2013 oil and liquids production 19 per cent to 665 barrels of oil equivalent per day, from 558 barrels of oil equivalent per day in the fourth quarter of 2012;
- Improved cash flow from operations by 10 per cent, from $5.6-million in 2012, to $6.2-million in 2013;
- Drilled 14 (12.3 net) wells in 2013, resulting in 12 (10.6 net) oil wells, one (0.7 net) standing gas well, and one (1.0 net) dry and abandoned well;
- Increased first quarter 2014 production to approximately 700 barrels of oil equivalent per day, a 11-per-cent increase over first quarter 2013 average production of 630 barrels of oil equivalent per day.
SELECTED FINANCIAL AND OPERATIONAL INFORMATION Three months ended Dec. 31, Year ended Dec. 31, 2013 2012 2013 2012 Financial (in thousands of dollars, except per-share amounts) Petroleum and natural gas sales $ 3,795 $ 3,294 $ 15,394 $ 12,030 Cash flow from operations 1,298 1,484 6,221 5,654 Per share 0.04 0.04 0.18 0.16 Comprehensive income (loss) (1,532) (529) (1,292) 96 Per share $ (0.05) $ (0.02) $ (0.04) $ 0.00 Capital expenditures 3,105 2,919 8,894 9,221 Working capital deficit, excluding bank debt and commodity contracts, end of period 2,726 3,206 Bank debt, end of period 4,900 1,700 Total assets, end of period 34,460 30,713 Operations Production Crude oil and natural gas liquids (bbl/d) 665 558 613 482 Natural gas (mcf/d) 107 205 142 165 Total (boe/d) 683 592 637 510 Oil and liquids as percent of total 97% 94% 96% 95% Average selling price Crude oil and NGLs ($/bbl) 61.41 62.96 68.00 67.27 Natural gas ($/mcf) 3.58 3.31 3.28 2.52 Total ($/boe) 60.36 60.48 66.21 64.46 Operating netback ($/boe at 6:1) Price 60.36 60.48 66.21 64.46 Royalties (13.70) (12.76) (13.83) (13.46) Production expense (17.89) (14.94) (17.77) (16.49) Transportation expense (1.44) (1.53) (1.67) (1.71) Operating netback ($/boe) 27.33 31.25 32.94 32.80
Operational review and update
In 2013, Hawk drilled 14 (12.3 net) wells, resulting in 12 (10.6 net) oil wells in its core area of western Saskatchewan, one (0.7 net) standing gas well in central Alberta, and one (1.0 net) dry and abandoned well in east-central Alberta. The drilling program in 2013 was concentrated on vertical development drilling in western Saskatchewan, where the corporation drilled six (4.8 net) successful vertical oil wells in the Silverdale area. Hawk also drilled five (5.0 net) successful vertical oil wells in the Rusk Lake, Lashburn, Dulwich, Eureka and Neilburg areas, all in western Saskatchewan.
In the first quarter of 2014, Hawk followed up its successful drilling in the Neilburg area with two (2.0 net) additional successful vertical oil wells at Neilburg, as well as a successful vertical well in the Lloydminster area of east-central Alberta, directly offsetting its production in the Silverdale area of western Saskatchewan. Hawk expects production for the first quarter of 2014 to average approximately 700 barrels of oil equivalent per day based on field estimates.
Financial
Hawk achieved record cash flow from operations in 2013 of approximately $6.2-million, compared with $5.6-million for 2012. The corporation generated an operating netback of $32.94 per barrel of oil equivalent in 2013, which is comparable with the 2012 operating netback of $32.80, as increased pricing in 2013 was offset by a slight increase in production expenses.
Revenue for the year increased by 28 per cent to $15.4-million in 2013, from $12.0-million in 2012, as a result of increased annual production and slightly improved pricing in 2013. Hawk's annual production increased 28 per cent to 637 barrels of oil equivalent per day, with oil and liquids production contributing 613 barrels per day, or 96 per cent of total annual production, while the corporation's average realized oil price increased 1 per cent in 2013, to average $68 per barrel, compared with $67.27 per barrel in 2012.
At Dec. 31, 2013, Hawk had $4.9-million drawn on its existing $12-million credit facility. The corporation continues to maintain a solid balance sheet with net debt and working capital deficit of approximately $7.6-million at Dec. 31, 2013, which equates to a net debt to annual cash flow from operations of 1.2:1.
Outlook
The corporation has set a $10-million capital budget for 2014 that will focus on development opportunities in western Saskatchewan and east-central Alberta targeting heavy crude oil. Hawk plans to drill four (3.7 net) vertical wells targeting heavy oil mainly in western Saskatchewan in the second quarter of 2014, after spring breakup and once surface conditions allow access, which the company expects to be in June, 2014. In addition, the corporation expects to drill one (1.0 net) vertical well targeting heavy oil in the Eureka area of western Saskatchewan, which is a follow-up to a well drilled by Hawk in the fourth quarter of 2013.
Western Canadian Select (WCS) pricing for heavy oil, to date in 2014, has improved and has been less volatile than in the first quarter of 2013. For the first quarter of 2014, the WCS differential to West Texas Intermediate (WTI) averaged $23.13 (U.S.) per barrel, compared with $31.96 (U.S.) per barrel for the first quarter of 2013, and $32.20 (U.S.) per barrel in the fourth quarter of 2013. Additionally, a weaker Canadian dollar relative to the U.S. dollar has increased the Canadian dollar oil price that Hawk has received to date in 2014. Although the WCS differential has improved to date in 2014, the corporation expects this differential to remain volatile. Hawk has entered into both WTI commodity contracts and WCS differential contracts for the remainder of 2014, to provide downside oil price protection to ensure the $10-million capital budget for 2014 can be financing mainly through cash flow from operations with a limited increase to the corporation's credit facility.