The assets include over 24,000 net acres with estimated reserve potential
of over 500 billion cubic feet equivalent (Bcfe), approximately 50% operated.
The properties are located in the core of the
Based on 60-acre spacing, the properties add a substantial number of
drilling locations to Petrohawk's current inventory in the play. Of the total
net acreage acquired, the Company estimates that only 11% is classified as
proved. Petrohawk's total acreage position in the
'Today's acquisition is another strategic step in our building a uniquely
resource-rich company. This valuable property is contiguous to our existing
position in the
Current net production from the properties is approximately 11 million cubic feet of natural gas equivalent per day (Mmcfe/d). The average initial gross production rate for the eight operated wells drilled on the acreage during 2007 is approximately 2.0 Mmcfe/d. Petrohawk estimates proved reserves to be approximately 60 Bcfe.
Additionally, the asset purchase will qualify as a like-kind exchange for property to be sold in Petrohawk's recently announced Gulf Coast divestment, with expected deferred tax benefits to the Company.
Petrohawk Energy Corporation is an independent energy company engaged in the acquisition, production, exploration and development of natural gas and oil with properties concentrated in North Louisiana, Arkansas, East Texas, Oklahoma and the Permian basin.
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Additional Information for Investors
This press release contains forward-looking information regarding Petrohawk that is intended to be covered by the safe harbor 'forward-looking statements' provided by of the Private Securities Litigation Reform Act of 1995, based on Petrohawk's current expectations and includes statements regarding acquisitions and divestitures, estimates of future production, future results of operations, quality and nature of the asset base, the assumptions upon which estimates are based and other expectations, beliefs, plans, objectives, assumptions, strategies or statements about future events or performance (often, but not always, using words such as 'expects', 'anticipates', 'plans', 'estimates', 'potential', 'possible', 'probable', or 'intends', or stating that certain actions, events or results 'may', 'will', 'should', or 'could' be taken, occur or be achieved). Statements concerning oil and gas reserves also may be deemed to be forward-looking statements in that they reflect estimates based on certain assumptions that the resources involved can be economically exploited. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those, reflected in the statements. These risks include, but are not limited to: the risks of the oil and gas industry (for example, operational risks in exploring for, developing and producing crude oil and natural gas; risks and uncertainties involving geology of oil and gas deposits; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to future production, costs and expenses; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; health, safety and environmental risks and risks related to weather such as hurricanes and other natural disasters); uncertainties as to the availability and cost of financing; fluctuations in oil and gas prices; risks associated with derivative positions; inability to realize expected value from acquisitions, inability of our management team to execute its plans to meet its goals, shortages of drilling equipment, oil field personnel and services, unavailability of gathering systems, pipelines and processing facilities and the possibility that government policies may change or governmental approvals may be delayed or withheld. Additional information on these and other factors which could affect Petrohawk's operations or financial results are included in Petrohawk's other reports on file with the SEC. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from the projections in the forward-looking statements. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Petrohawk does not assume any obligation to update forward-looking statements should circumstances or management's estimates or opinions change.
The SEC permits oil and gas companies to disclose in their filings with the SEC only proved reserves, which are reserve estimates that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. In this presentation, Petrohawk uses the terms 'probable' and 'possible' reserves, which SEC guidelines prohibit from being included in filings with the SEC. Probable reserves are unproved reserves which are more likely than not to be recoverable. Possible reserves are unproved reserves which are less likely to be recoverable than probable reserves. Estimates of probable and possible reserves which may potentially be recoverable through additional drilling or recovery techniques are by their nature much more uncertain than estimates of proved reserves and accordingly are subject to substantially greater risk of not actually being realized by the Company. In addition, our production forecasts and expectations for future periods are dependant upon many assumptions, including estimates of production decline rates from existing wells and the undertaking and outcome of future drilling activity, which may be affected by significant commodity price declines or drilling costs increases.
SOURCE Petrohawk Energy Corporation
