Mr. Steve Fitzmaurice reports

HAWK ANNOUNCES SECOND QUARTER 2014 RESULTS

Hawk Exploration Ltd. has released its results for the three and six months ended June 30, 2014. The corporation's interim financial statements for the three and six months ended June 30, 2014, and its management's discussion and analysis for the three and six months ended June 30, 2014, are available for viewing on SEDAR under Hawk's profile or on the corporation's website.

Highlights for the three months ended June 30, 2013, were as follows:

• Generated cash flow from operations of $1.9-million in the second quarter, a 28-per-cent increase from the $1.6-million in cash flow in the second quarter of 2013;
• Averaged 659 barrels of oil equivalent per day (boe/d) of production in the second quarter of 2014, a 5-per-cent increase over the 628 boe/d average production in the same period of 2013;
• Earned comprehensive income of $300,000 in the second quarter of 2014, a 1-per-cent increase over the second quarter of 2013;
• Drilled three (2.9 net) wells in western Saskatchewan during the second quarter of 2014;
• Subsequent to the second quarter, entered into a new revolving credit facility in the amount of $13.5-million with a Canadian bank;
• Subsequent to the second quarter, entered into a purchase and sale agreement with Trihawk Energy Ltd. to acquire certain producing assets in the plains region of Alberta and western Saskatchewan.

                                   FINANCIAL HIGHLIGHTS
                         (In thousands except per share amounts)

                                                          Three months            Six months
                                                        ended June 30,        ended June 30,
                                                       2014       2013       2014       2013

Petroleum and natural gas sales                      $4,979     $3,893     $9,639     $6,810
Cash flow from operations                             1,949      1,613      3,708      2,817
Per share                                              0.06       0.05       0.11       0.08
Comprehensive income (loss)                             334        332      (317)        173
Per share (loss)                                       0.01       0.01     (0.01)       0.01
Capital expenditures                                  1,849        419      4,717      2,537
Working capital deficit -- excluding bank
debt and commodity contracts, end of period                                 1,900        876
Bank debt, end of period                                                    6,700      3,750
Total assets, end of period                                                36,849     31,227


                                       OPERATIONAL RESULTS   
                                                     
                                         Three months ended June 30, Six months ended June 30,
                                                      2013      2012          2013        2012
Production
Crude oil and natural gas liquids (bbl/d)              643       598           662         598
Natural gas (mcf/d)                                     95       178           110         168
Total (boe/d)                                          659       628           680         626
Oil and liquids as percentage of total                 98%       95%           97%         96%
Average selling price
Crude oil and NGL (per bbl)                         $84.33    $70.44        $79.55      $61.97
Natural gas (per mcf)                                 4.81      3.61          5.38        3.47
Total (per boe)                                      83.00     68.13         78.27       60.13
Operating netback (per boe at 6:1)
Price                                                83.00     68.13         78.27       60.13
Royalties (loss)                                   (17.23)   (14.84)       (16.15)     (11.65)
Production (expense)                               (21.61)   (18.03)       (21.51)     (17.60)
Transportation (expense)                            (1.81)    (1.99)        (1.73)      (1.75)
Operating netback ($/boe)                            42.35     33.27         38.88       29.13

Operational review and update

During the second quarter of 2014, Hawk drilled three (2.9 net) wells in western Saskatchewan; however, wet weather in this area delayed completion activities until late July, 2014. The corporation drilled one (one net) vertical well targeting heavy oil in the Eureka area of western Saskatchewan, which was a follow-up to an exploration well drilled in the fourth quarter of 2013. The new well encountered 21 metres of net oil pay in the Basal Mannville formation, was completed and placed on production at an average rate of 25 barrels of oil per day. Hawk has received approval for a horizontal well project and plans to drill its first horizontal well at Eureka during the third or fourth quarter of 2014.

The corporation also drilled two (1.9 net) vertical wells targeting heavy oil in the Baldwinton and Neilburg areas of western Saskatchewan. This Baldwinton well (0.9 net) was completed in the Sparky formation and placed on production at a rate of 20 (18 net) bopd while the Neilburg well was completed and encountered uneconomic quantities of oil and was subsequently suspended.

In July, 2014, Hawk shot six square kilometres of three-dimensional seismic data in the Forest Bank area of western Saskatchewan where the corporation recently entered into a 1,440-acre farm-in agreement with a major company. The 3-D seismic has been interpreted and Hawk has identified a number of drilling prospects. Hawk expects to drill its first prospect on the Forest Bank property in the third or fourth quarter of 2014 at which point Hawk will earn a 65-per-cent working interest in one section of land covered under the farm-in. The corporation also expects to re-enter several existing well bores on the Forest Bank property later in 2014, after Hawk has earned an interest in the farm-in lands. These well bores are expected to be recompleted in formations that have not been tested and appear to have bypassed pay on logs.

Financial

Hawk achieved cash flow from operations in the second quarter of 2014 of approximately $1.9-million compared with $1.6-million for the second quarter of 2013 due to an 8-per-cent increase in oil production and a 19-per-cent increase in oil prices in the second quarter of 2014 compared with the second quarter of 2013. Average Western Canadian Select (WCS) prices for the second quarter of 2014 increased 11 per cent to $82.95 (U.S.) per bbl compared with $75.06 (U.S.) per bbl in the second quarter of 2013 while a weaker Canadian dollar, relative to the U.S. dollar, led to a 19-per-cent increase in Hawk's realized oil prices in the second quarter of 2014 to $84.29 per bbl. The differential between WCS and West Texas Intermediate crude oil increased slightly to $20.04 (U.S.) per bbl in the second quarter of 2014 compared with $19.16 (U.S.) per bbl for the second quarter of 2013.

Hawk generated an operating netback of $42.35 per boe for the second quarter of 2014, a 27-per-cent increase from the operating netback for the second quarter of 2013 of $32.50 per boe due to increased oil prices in second quarter 2014. Production expenses increased in the second quarter of 2014 to average $21.61 per boe compared with $18.03 per boe in the second quarter of 2013 due to increased workover costs in the second quarter of 2014 as well as increased road maintenance due to wet spring weather.

At June 30, 2014, Hawk had $6.7-million drawn on its existing $12-million credit facility. In August of 2014, Hawk entered into a new $13.5-million revolving credit facility with another Canadian bank to replace its existing $12-million facility. The corporation continues to maintain a solid balance sheet with net debt and working capital deficit of approximately $8.6-million at June 30, 2014, which equates to a net debt to annualized cash flow from operations of 1.2:1.

Outlook

The corporation will continue to focus on developing its heavy oil properties in east-central Alberta and western Saskatchewan and has set a $10-million capital budget for 2014. Hawk expects to drill five (4.7 net) vertical wells and one (1.0 net) horizontal well in the second half of 2014. Hawk plans to drill vertical wells at Forest Bank (1.0 net) in western Saskatchewan and Cadogan (0.7 net) in east-central Alberta in the second half of 2014. The corporation also expects to drill a horizontal well (one net) in the Eureka area of western Saskatchewan in the second half of 2014. The remainder of Hawk's capital program for 2014 is expected to include a combination of additional vertical drilling in the Lloydminster area of Saskatchewan and recompletion activities at Forest Bank.

Hawk's current production is approximately 680 boe/d, based on field estimates. As a result of wet spring and summer weather in western Saskatchewan that delayed drilling and completion activities, Hawk expects its 2014 production to average between 700 and 725 boe/d, down from its previous average 2014 production guidance of 800 boe/d.

We seek Safe Harbor.