doing fine

I think the Hartleys report openly available from the company website dated 31st August 2011 is fairly accurate of the company and should be relied upon more then a few disgruntled people...

Strong Production from Ukraine Continues
Hawkley Oil and Gas Limited (?Hawkley?, ?HOG?, ?Company?) has reported
another strong month of production from its 100% owned Sorochynska field,
located onshore in the Ukraine. Production averaged 6.5 million cubic feet of gas
per day with 220 barrels of condensate per day (July production 6.6mmcf/d and
230boc/d). Post VAT revenue was $2.5m (vs $2.6m in July). Cash remains
steady at $13m as revenues offset overheads and costs related to the drilling of
the Chernetska-1 well.
Since February, the Sorochynska-201 well has now generated >$17m in post
VAT revenue with a margin of ~45% (Hartleys estimate). We currently value the
Sorochynska field (based on a 3 well development) at 45cps.
This does not include potential value from the independently estimated
contingent resource of 217 billion cubic feet of gas and 5.6 million barrels of
condensate at the Sorochynska licence.
Chernetska Drilling Could Add 20cps in Near Term
Drilling at the Company?s Chernetska-1 well is on track to hit the primary oil
target in the B20 horizon sometime in October. We had estimated that the
primary target may be intersected several weeks earlier; however, drilling rates
have slowed in the deeper, more complex sections.
The well is updip from an historic well that flowed oil at 920 barrels per day
before water influx. This updip location may hold as much as 5 million barrels of
oil. We have modelled a more conservative case with recovery of 3.4 million
barrels and estimate that this could add 20cps in value for Hawkley.
The well may also be deepened to test several other horizons that are
prospective for both oil and gas. These zones are considered more risky but
also have much larger upside potential. The magnitude of the potential is
indicated by independently estimated prospective and contingent resources of
378 billion cubic feet of gas and 15 million barrels of condensate at the
Chernetska licence.
Not Exploration, Cashflow Positive, >0.5tcf Resource
All of Hawkley?s targets, upon which the resource estimates have been based,
have been de-risked by discoveries made by State-run exploration companies
during the Soviet era. Reservoir performance has been considered the main
risk, which HOG has shown can be mitigated successfully at Sorochynska by
using modern drilling and completion techniques.
Sorochyska has delivered strong positive operating cashflow since February and
payback on drilling costs is likely before the end of the year, with another 8 years
of production expected. In addition, at least two development wells are likely
over the next 18 months, which should deliver significant production and
revenue uplifts.
Drilling at Chernetska is likely to deliver production from the B20 oil bearing
horizon (we estimate >75% chance of success) and may also test some of the
>500 billion cubic feet of gas resource from deeper horizons. The Company is
also likely to have high impact appraisal drilling in 2012 in addition to
development wells at Sorochynska.
Hawkley is cashflow positive with development upside, has large appraisal
upside potential and several near term positive catalysts. We rate Hawkley Oil
and Gas Ltd as a Buy with a price target of 63cps.