Petrohawk Issues Update on Ops, Production

Petrohawk Energy Corp. on Wednesday provided an update on operations and production volumes, announced details of its 2007 drilling plans and provided information on several potentially significant discoveries.

Petrohawk completed an active 2006, closing several strategic acquisitions, executing a successful drilling program and divesting a significant number of non-core properties. The Company's net production rate (fourth quarter 2006 vs. fourth quarter 2005) increased by 175% net of divested properties which were producing approximately 30 million cubic feet of natural gas equivalent per day (Mmcfe/d) during that period.

The Company estimates that production for the fourth quarter of 2006 reached a record level of 318 Mmcfe/d. Production for the quarter was impacted by divestments, voluntary price-related shut-ins in early October and completion delays. This production rate is net of the divestment during the quarter of properties located in Wyoming, Michigan and California. These properties represented approximately 15 Mmcfe/d and contributed approximately 11 Mmcfe/d for the quarter. If the divested properties had not been sold, fourth quarter production would have been approximately 323 Mmcfe/d. Proceeds from the divestments were approximately $135 million.

Continuing the trend of unit cost reduction, the Company expects lease operating costs (excluding workover expense) to be approximately $0.60 to $0.65 per Mcfe for the fourth quarter of 2006, an improvement over third quarter. Additionally, Petrohawk estimates realized prices (before hedges) for the fourth quarter of 2006 will be approximately 99% of NYMEX for natural gas and approximately 92% of NYMEX WTI for crude oil.

The following table summarizes Petrohawk's 2006 production growth and operating expense trends:

                              Q1      Q2      Q3       Q4E     YE2006E

 Production (as reported
  - Mmcfe/d)                 136     129     290      318         219

 Pro Forma Production        267     275     297      307         286
 (production from current
  properties - Mmcfe/d)

 Lease Operating Expense
  (as reported - $/Mcfe)    0.94    0.96    0.66   0.60-0.65     0.73

"We have built an exciting growth vehicle," said Floyd C. Wilson, Chief Executive Officer. "Thanks to our strategic acquisitions and effective divestiture program, Petrohawk has one of the lowest operating cost structures in onshore E&P. We also possess a low-cost development drilling inventory that we believe is one of the deepest and most concentrated among E&P companies our size. Our goal for 2007 is to execute our drilling program which is weighted to lower risk drilling, includes high quality exploration, has sustainability and offers exceptional returns on investment."

During 2006, Petrohawk drilled 330 wells, 95% of which were completed as producers.

Exploratory Success in Mid-Continent and Gulf Coast

Petrohawk had exploratory success in five high-impact projects, including confirmation of commercial production from the deeper Gray Sand zone at Terryville field in North Louisiana, two Gulf Coast Smackover discoveries in Wayne County, Mississippi, and two significant Vicksburg discoveries in South Texas.

Terryville Field, Gray Sand Interval (Lincoln Parish, Louisiana) - In Terryville Field, Petrohawk has now completed two commercial wells at approximately 12,000' to produce natural gas from the Gray Sand, a zone which underlies the principal field pay, the Lower Cotton Valley Sands. The Wallace 9 #1 and the Hood 15 #1, both Gray Sand wells, had a combined initial production rate of 9 Mmcfe/d. During the first half of 2007, Petrohawk plans to complete an initial 50 square mile 3D seismic survey surrounding this discovery to aid in further development of Gray Sand production. The Company expects to begin drilling additional Gray Sand wells at Terryville in the second quarter of 2007.

Winchester and Coldwater Creek Prospects (Wayne County, Mississippi) - During the third and fourth quarters, the Company drilled three successful Smackover wells on its Winchester and Coldwater Creek prospects. The wells tested at rates of 1,289 Boe/d, 575 Boe/d, and 977 Boe/d. Facilities have been constructed and production is expected to start during February. At least four additional development wells are planned for 2007. The Company's working interest in this acreage is 33%.

Nabors Field (Starr County, Texas) and Colson Prospect (Brooks County, Texas) - In the Nabors Field, the Cleopatra #5 well was drilled in the third quarter and the Cleopatra #7 well was drilled in the fourth quarter - these wells began producing at a combined rate of 19 Mmcfe/d. The Company's working interest in this field is 100%. The Cleopatra #8 well is currently drilling.

On the Colson Prospect, the Palo Blanco #1 exploratory well was drilled during the fourth quarter and discovered two Vicksburg pay sands. The deepest sand has been tested at 5.0 Mmcfe/d after fracture treatment, and the upper zone tested 3.1 Mmcfe/d prior to fracture treatment. Production is expected to commence in March. An offset well is currently drilling. Petrohawk's working interest in this project is also 100%.

Two exploratory projects drilled during the fourth quarter are still in progress. The Bowdle #42-3, (WI=48%) in the Haley Field of Loving County, Texas, was completed in the Morrow and Atoka sands at an initial production rate of 1.5 Mmcfe/d. Plans to stimulate and commingle the Strawn zone are in progress.

At the Flowers Prospect in Scott County, Arkansas, the initial well, an off-structure re-entry of a well drilled in 1983, the USA 1 #1, tested as non-commercial in the Jackfork zone. An additional well drilled on the prospect acreage to test the more shallow Atoka section was non-commercial. A second Jackfork test, the Self #1-8, is currently drilling and targets the Jackfork zone in a structural position substantially updip to the USA 1#1. This well should reach total depth during February.

Fourth Quarter Development Drilling Exceeds Expectations

The Company reported better than expected results from key development programs at the Elm Grove and Terryville fields, which together account for approximately 42% of Petrohawk's current production. At Elm Grove (Bossier and Caddo Parishes, Louisiana), gross production increased to over 140 Mmcfe/d at year end 2006. During 2006, seventeen 20-acre spacing wells were drilled. That program has exceeded expectations with performance similar to 40-acre spacing wells. The average initial producing rate for the 20-acre spacing wells was 2.5 Mmcfe/d. Five operated rigs are currently drilling in the field.

Also at Elm Grove, the Hosston recompletion program is well underway. During 2006, 71 wells were recompleted to add natural gas production from the Hosston zone to existing Lower Cotton Valley production. Currently, the Hosston formation accounts for approximately one third of total production from Elm Grove.

Gross operated production from the Terryville Field (Lincoln Parish, Louisiana) increased from 20 Mmcfe/d at the end of second quarter 2006 to 55 Mmcfe/d at year end. Eleven wells were drilled during the fourth quarter with average initial production rates of 2.5 Mmcfe/d. The Company plans to continue drilling both 40 acre and 80 acre spacing wells to develop the field and step-out wells to extend the field limits. Three rigs are currently active in the field and a fourth rig is expected to be added during the second quarter.

In South Texas, the Lions Field (Goliad County, Texas) continues to be one of Petrohawk's more highly productive properties, with net production from the field reaching 17 Mmcfe/d during the quarter. The Wright Materials #3 well (WI=33%) was sidetracked and is producing at 6.4 Mmcfe/d, and the Weise #4 (WI=45%) is currently being completed. The Dehnert #3 well (WI = 53%) and the Wright Materials #2 well (WI = 44%) are drilling.

In the Arkoma region, the Company began completing the first of three wells drilled on its 10,000 net acre position in the Fayetteville Shale. The first well drilled is currently producing at a rate of 2.6 Mmcfe/d. Petrohawk has moved a rig into the area to commence drilling a new round of approximately fifteen locations. The Company has recently signed a gas gathering agreement that provides a market for natural gas produced from this evolving play.

"The combination of resource plays in North Louisiana and exploration in South Texas continue to drive organic production growth. Pro-forma production was up 7% in the third quarter and another 3% in the fourth quarter, even though a number of our new discoveries are not yet on line. Petrohawk currently has 18 operated rigs and another eight non-operated rigs drilling and expects field development and exploration to continue production growth in 2007 and beyond," said Bill Hahne, Petrohawk's Chief Operating Officer.

2007 CAPEX and Production Outlook

Based on the Company's view of relatively lower costs for 2007 and current commodity prices, the estimated capital budget for the year will be approximately $575 million. This budget is allocated approximately 50% to drilling proved locations and 50% to drilling probable and exploration locations. Regionally, 61% has been budgeted for Mid-Continent projects, 33% to Gulf Coast projects, and 6% to drilling in the Permian Basin.

During 2007, Petrohawk expects to increase net production rates by more than 10% over the 2006 pro-forma average production rate of 286 Mmcfe/d (production from continuing operations), yielding an average 2007 production rate of 315 Mmcfe/d to 325 Mmcfe/d. For the first quarter the Company expects to produce 310 Mmcfe/d to 320 Mmcfe/d.

For 2007, approximately 65% of expected production is hedged. The floor for hedged production averages $7.22/Mmbtu for natural gas, and $63.05/Bbl for crude oil. A summary of current derivative positions is available on the Company's website.

"With our 2007 drilling program, we are focusing on areas that we believe maximize margins and provide the greatest opportunity to book new reserves. Our efforts are driven by our original and ongoing strategy to assemble and develop a high margin set of properties, said Floyd Wilson. "Our combined technical staff has re-examined our inventory of projects in preparation for this year's drilling program. The results of this undertaking have fundamentally changed the profile of our drilling program to one that we feel has greater predictability and further supports future growth."

Major projects planned are as follows:

Mid-Continent - Elm Grove development drilling will continue with 140 wells planned for 2007. This is, in the Company's view, a sustainable rate of drilling for several years. Also, Petrohawk plans approximately 100 Hosston recompletions utilizing coil-tubing rigs. In the Terryville Field, 50 to 60 wells are planned utilizing four rigs. A fifth rig dedicated to Gray Sand exploration and step-out field delineation may be added upon completion of the 3D seismic survey currently underway. In the Fayetteville and Woodford shale areas, over thirty wells are planned, including 15 operated wells in the Fayetteville area.

Gulf Coast - In 2007, the Gulf Coast program will be diversified between South Texas, South Louisiana and Mississippi, with approximately 100 wells planned for the region. Lions Field development will continue with eight wells planned. Seven wells are planned in the Nabors, Cowboy and La Reforma fields. Petrohawk's Winchester prospect in Wayne County, Mississippi, is expected to have four additional wells drilled.

After nearly a year of acquiring, processing and analyzing new 3D seismic data, Petrohawk plans to commence a new round of drilling at Gueydan Field, a South Louisiana salt dome acquired in 2005. Seven wells are budgeted during 2007, including tests of deeper zones (Camerina/Miogyp).

Permian - Twenty to thirty development wells are budgeted for Waddell Ranch (Crane County, Texas) and Sawyer Canyon (Sutton County, Texas). Additional wells are also expected to be drilled in TXL Field (Ector County, Texas), where Apache Corporation has recently become operator.

Petrohawk Energy Corporation is an independent energy company engaged in the acquisition, production, exploration and development of oil and gas, with properties concentrated in the Mid-Continent, Gulf Coast and Permian regions.


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