Financial Strength - FREE CF will continue in H2 2015No production decline in Q2, FREE CF, high operating netback, high cash netback, and debt reduction that brought the debt to CF ratio at 2.2 times.
Given that the company will
spend only $900K in the second half of 2015, the
FREE CF in H2 2015 will help Hawk reduce futher its net debt and bring it well below 2 times.
You can't find 750 boepd (97% oil) and no debt problems in a North American company valued now at only C$15 million!
https://www.marketwatch.com/story/hawk-announces-second-quarter-2015-results-2015-08-21-7173114
I quote from Q2 report:
Despite only drilling one (0.7 net) well in 2015, Hawk has not experienced any significant production decline to date. The Corporation's current production is estimated to be approximately 750 boe/d, a modest decline from our first quarter 2015 average production rate of 779 boe/d.
Hawk generated an operating netback of $21.06 per boe for the second quarter of 2015 compared to $42.35 per boe for the second quarter of 2014 with the decrease solely due to significantly lower realized oil pricing. The Corporation continues to see improvement in its cost structure as combined operating and transportation costs per boe averaged $20.19 per boe compared to $23.42 per boe for the second quarter of 2014 which is a 14 percent reduction.
At June 30, 2015, Hawk had $9.6 million drawn on its credit facility. The Corporation reduced its net indebtedness from $11 million at the end of the first quarter of 2015 to $10.2 million at June 30, 2015. Based on second quarter cash flow of $1.16 million, the corporation's net debt to annualized cash flow ratio improved to 2.2 times.
Hawk set a 2015 capital budget of $2 million of which $1.1 million was spent up to June 30, 2015.
Despite minimal capital investment in 2015, the Corporation's production has been resilient with current production estimated at 750 boe/d which speaks to the solid asset base the Corporation has built.