##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D. C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the quarter ended September 30, 2005
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 Commission file number 000-25717
 PETROHAWK ENERGY CORPORATION
  Delaware
(State or other jurisdiction of
incorporation or organization)
    
    86-0876964
(I.R.S. Employer
Identification Number)
 1100 Louisiana, Suite 4400, Houston, Texas 77002
  (832) 204-2700
   þ  o
  o  þ
  o  þ




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##### Table of Contents



TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONITEM 1.Consolidated Financial Statements (Unaudited)
    
    
    3Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30,
2005 and 2004
    
    
    3Consolidated Balance Sheets as of September 30, 2005 and December 31, 2004
    
    
    4Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2005 and 2004
    
    
    6Notes to the Consolidated Financial Statements
    
    
    7ITEM 2.Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21ITEM 3.Quantitative and Qualitative Disclosures about Market Risk
    
    
    28ITEM 4.Controls and Procedures.
    
    
    29PART II. OTHER INFORMATIONITEM 4.Submission of Matters to a Vote of Security Holders
    
    
    30ITEM 6.Exhibits
    
    
    31SignaturesCertificate of CEO Under Section 302Certificate of CFO Under Section 302Certificate of CEO and CFO Under Section 906
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PETROHAWK ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
In thousands, except per share amounts
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004OPERATING REVENUES:Oil and gas
    
    $
    81,447
    
    
    $
    5,589
    
    
    $
    149,957
    
    
    $
    14,629OPERATING EXPENSES:Production expenses:Lease operating
    
    
    10,276
    
    
    
    887
    
    
    
    19,826
    
    
    
    2,531Workover and other
    
    
    941
    
    
    
    36
    
    
    
    2,180
    
    
    
    53Taxes other than income
    
    
    6,405
    
    
    
    291
    
    
    
    10,842
    
    
    
    780Gathering, transportation and other
    
    
    515
    
    
    
    
    
    
    
    1,135
    
    
    
    5General and administrative:General and administrative
    
    
    5,782
    
    
    
    1,597
    
    
    
    13,258
    
    
    
    4,017Stock-based compensation
    
    
    780
    
    
    
    898
    
    
    
    3,003
    
    
    
    2,925Accretion expense
    
    
    332
    
    
    
    23
    
    
    
    716
    
    
    
    69Depletion, depreciation and amortization
    
    
    22,398
    
    
    
    1,271
    
    
    
    44,522
    
    
    
    3,532Total operating expenses
    
    
    47,429
    
    
    
    5,003
    
    
    
    95,482
    
    
    
    13,912INCOME FROM OPERATIONS
    
    
    34,018
    
    
    
    586
    
    
    
    54,475
    
    
    
    717Net loss on derivative contracts (Note 7)
    
    
    (83,585
    )
    
    
    (592
    )
    
    
    (120,568
    )
    
    
    (592
    )Interest expense and other (Note 4)
    
    
    (9,923
    )
    
    
    (656
    )
    
    
    (20,306
    )
    
    
    (1,131
    )Loss before income taxes
    
    
    (59,490
    )
    
    
    (662
    )
    
    
    (86,399
    )
    
    
    (1,006
    )Income tax benefit
    
    
    23,066
    
    
    
    61
    
    
    
    33,521
    
    
    
    24NET LOSS
    
    
    (36,424
    )
    
    
    (601
    )
    
    
    (52,878
    )
    
    
    (982
    )Preferred dividends
    
    
    (110
    )
    
    
    (111
    )
    
    
    (329
    )
    
    
    (333
    )Net loss applicable to common shareholders
    
    $
    (36,534
    )
    
    $
    (712
    )
    
    $
    (53,207
    )
    
    $
    (1,315
    )Basic loss per share
    
    $
    (0.56
    )
    
    $
    (0.05
    )
    
    $
    (1.10
    )
    
    $
    (0.13
    )Diluted loss per share
    
    $
    (0.56
    )
    
    $
    (0.05
    )
    
    $
    (1.10
    )
    
    $
    (0.13
    )WEIGHTED AVERAGE SHARES OUTSTANDING:Basic
    
    
    64,877
    
    
    
    13,818
    
    
    
    48,425
    
    
    
    9,763Fully Diluted
    
    
    64,877
    
    
    
    13,818
    
    
    
    48,425
    
    
    
    9,763
 The accompanying notes are an integral part of these consolidated financial statements.
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PETROHAWK ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
In thousands, except share and per share amounts
 September 30, 2005
    
    
    December 31, 2004CURRENT ASSETSCash and cash equivalents
    
    $
    4,180
    
    
    $
    5,660Accounts receivable
    
    
    52,729
    
    
    
    23,151Deferred income taxes
    
    
    33,559
    
    
    
    Receivables from price risk management activities
    
    
    
    
    
    
    4,973Prepaid expenses and other
    
    
    6,967
    
    
    
    2,238Total current assets
    
    
    97,435
    
    
    
    36,022OIL AND GAS PROPERTY(full cost method)Evaluated properties
    
    
    1,054,522
    
    
    
    484,233Unevaluated properties
    
    
    161,037
    
    
    
    48,840Total gross oil and gas property
    
    
    1,215,559
    
    
    
    533,073Less  accumulated depreciation and depletion
    
    
    (92,828
    )
    
    
    (48,740
    )Net oil and gas properties
    
    
    1,122,731
    
    
    
    484,333OTHER OPERATING PROPERTY AND EQUIPMENTGas gathering system and equipment
    
    
    1,506
    
    
    
    1,504Other
    
    
    3,000
    
    
    
    1,261Total gross other operating property and equipment
    
    
    4,506
    
    
    
    2,765Less  accumulated depreciation
    
    
    (1,369
    )
    
    
    (934
    )Net other operating property and equipment
    
    
    3,137
    
    
    
    1,831OTHER NON-CURRENT ASSETSReceivables from price risk management activities
    
    
    
    
    
    
    3,363Deferred income taxes
    
    
    
    
    
    
    981Goodwill
    
    
    138,944
    
    
    
    Debt issuance costs, net of amortization
    
    
    2,130
    
    
    
    3,875Other
    
    
    4,507
    
    
    
    3,794TOTAL ASSETS
    
    $
    1,368,884
    
    
    $
    534,199
 The accompanying notes are an integral part of these consolidated financial statements.
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PETROHAWK ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
In thousands, except share and per share amounts (Continued)
 September 30, 2005
    
    
    December 31, 2004CURRENT LIABILITIESAccounts payable and accrued liabilities
    
    $
    78,078
    
    
    $
    24,676Liabilities from price risk management activities
    
    
    86,441
    
    
    
    1,990Current portion of long-term debt
    
    
    500
    
    
    
    500Total current liabilities
    
    
    165,019
    
    
    
    27,166LONG-TERM DEBTRevolving credit facility
    
    
    170,000
    
    
    
    155,000Term B facility loan
    
    
    149,500
    
    
    
    49,50097⁄8% Notes, including $10,831 of unamortized premium
    
    
    140,831
    
    
    
    Subordinated convertible note payable
    
    
    
    
    
    
    35,000Total long-term debt
    
    
    460,331
    
    
    
    239,500LIABILITIES FROM PRICE RISK MANAGEMENT ACTIVITIES
    
    
    46,265
    
    
    
    67ASSET RETIREMENT OBLIGATIONS
    
    
    51,439
    
    
    
    12,726DEFERRED INCOME TAXES
    
    
    159,769
    
    
    
    OTHER NONCURRENT LIABILITIES
    
    
    5,137
    
    
    
    7,649COMMITMENTS AND CONTINGENCIES (NOTE 6)STOCKHOLDERS EQUITYConvertible Preferred Stock: 5,000,000 shares of
$.001 par value authorized; 593,271 and 598,271
shares issued and outstanding at September 30, 2005
and December 31, 2004, respectively, with a
liquidation value of $5.5 million.
    
    
    1
    
    
    
    1Common Stock: 125,000,000 shares of $.001 par value
authorized; 73,501,016 and 39,788,238 shares issued
and outstanding at September 30, 2005 and December
31, 2004, respectively.
    
    
    74
    
    
    
    40Additional paid-in capital
    
    
    549,052
    
    
    
    262,045Treasury Stock, at cost; 8,382 shares at September
30, 2005 and December 31, 2004.
    
    
    (36
    )
    
    
    (36
    )Accumulated deficit
    
    
    (68,167
    )
    
    
    (14,959
    )Total stockholders equity
    
    
    480,924
    
    
    
    247,091TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    1,368,884
    
    
    $
    534,199
 The accompanying notes are an integral part of these consolidated financial statements.
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PETROHAWK ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
In thousands
 Nine Months Ended September 30,2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (52,878
    )
    
    $
    (982
    )Adjustments to reconcile net loss to net cash
provided by operating activities:Depletion, depreciation and amortization
    
    
    44,522
    
    
    
    3,532Deferred income tax benefit
    
    
    (33,521
    )
    
    
    Stock-based compensation
    
    
    3,003
    
    
    
    2,925Accretion expense
    
    
    716
    
    
    
    69Net unrealized loss on mark-to-markets derivative contracts
    
    
    109,543
    
    
    
    593Other
    
    
    889
    
    
    
    125Change in assets and liabilities:Accounts receivable
    
    
    (2,114
    )
    
    
    (2,755
    )Prepaid expenses and other
    
    
    (1,460
    )
    
    
    (548
    )Accounts payable and accrued liabilities
    
    
    7,204
    
    
    
    356Other non-current assets
    
    
    (133
    )
    
    
    (2
    )Net cash provided by operating activities
    
    
    75,771
    
    
    
    3,313CASH FLOWS FROM INVESTING ACTIVITIES:Oil and gas property expenditures
    
    
    (88,427
    )
    
    
    (6,253
    )Acquisition properties from PHAWK, LLC
    
    
    
    
    
    
    (2,636
    )Acquisition of Proton, net of cash acquired of $870
    
    
    (52,625
    )
    
    
    Acquisition of Mission Resources, net of cash acquired of $48,359
    
    
    (95,816
    )
    
    
    Proceeds received from sale of oil and gas properties
    
    
    88,844
    
    
    
    832Gas gathering and equipment expenditures and other
    
    
    (1,741
    )
    
    
    (1,009
    )Net cash used in investing activities
    
    
    (149,765
    )
    
    
    (9,066
    )CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds from exercise of stock options
    
    
    11,780
    
    
    
    Proceeds from issuance of common stock and warrants
    
    
    
    
    
    
    25,249Proceeds from issuance of subordinated convertible note payable
    
    
    
    
    
    
    35,000Debt issue costs related to PHAWK, LLC transaction
    
    
    
    
    
    
    (1,426
    )Equity offering costs related to PHAWK, LLC transaction
    
    
    
    
    
    
    (5,576
    )Proceeds from borrowings
    
    
    310,000
    
    
    
    Repayment of borrowings
    
    
    (249,000
    )
    
    
    (13,285
    )Dividends paid
    
    
    (220
    )
    
    
    (446
    )Other
    
    
    (46
    )
    
    
    (777
    )Net cash (used in) provided by financing activities
    
    
    72,514
    
    
    
    38,739NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (1,480
    )
    
    
    32,986CASH AND CASH EQUIVALENTSBeginning of period
    
    
    5,660
    
    
    
    2,110End of period
    
    $
    4,180
    
    
    $
    35,096
 The accompanying notes are an integral part to these consolidated financial statements.
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PETROHAWK ENERGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 1 FINANCIAL STATEMENT PRESENTATION
   Recently Issued Accounting Pronouncements
 Accounting for Conditional Asset Retirement Obligations Accounting for Asset Retirement
Obligations
  Share-Based Payment Accounting for Stock Based Compensation Accounting for Stock Issued to Employees (APB 25)
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Exchanges of Nonmonetary Assets  an amendment of APB
Opinion 29
 Stock-Based Compensation
 Accounting for Stock-Based Compensation  Transition and Disclosure
  8




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Three Months Ended
    
    
    Nine Months EndedSeptember 30, 2004
    
    
    September 30, 2004(In thousands, except per share amounts)Net loss applicable to common shareholders as reported
    
    $
    (712
    )
    
    $
    (1,315
    )Add: Stock-based compensation expense included in
reported net loss, net of tax
    
    
    815
    
    
    
    2,855Deduct: Total stock-based compensation expense
determined under fair value method for all awards,
net of tax
    
    
    (815
    )
    
    
    (3,057
    )Pro forma net loss applicable to common shareholders
    
    $
    (712
    )
    
    $
    (1,517
    )Net loss per share:Basic  as reported
    
    $
    (0.05
    )
    
    $
    (0.13
    )Basic  pro forma
    
    $
    (0.05
    )
    
    $
    (0.16
    )Diluted  as reported
    
    $
    (0.05
    )
    
    $
    (0.13
    )Diluted  pro forma
    
    $
    (0.05
    )
    
    $
    (0.16
    )
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Weighted average value per option granted during the period (1)
    
    $
    3.15
    
    
    $
    3.76
    
    
    $
    2.29
    
    
    $
    3.76Assumptions:Stock price volatility
    
    
    35.0
    %
    
    
    73.9
    %
    
    
    29.2
    %
    
    
    73.9
    %Risk free rate of return
    
    
    4.1
    %
    
    
    3.0
    %
    
    
    3.6
    %
    
    
    3.0
    %Expected term
    
    3 years
    
    3 years
    
    3 years
    
    3 yearsDividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 (1) Calculated using the Black-Scholes fair value based method.
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2 ACQUISITIONS AND DIVESTITURES
 Mission Resources Corporation
   Business Combinations Goodwill and Other Intangible
Assets
 Goodwill
and Other Intangible Assets
   Wynn-Crosby Transaction
  10




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Proforma for Mission Resources and Wynn-Crosby
  Three Months EndedSeptember 30,
    
    
    Nine Months EndedSeptember 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(In thousands, except per share amounts)Pro forma:Revenue
    
    $
    95,997
    
    
    $
    71,856
    
    
    $
    251,179
    
    
    $
    195,189Net income (loss) available to
common stockholders
    
    $
    (44,109
    )
    
    $
    1,091
    
    
    $
    (17,668
    )
    
    $
    4,726Basic earnings (loss) per share
    
    $
    (0.68
    )
    
    $
    0.02
    
    
    $
    (0.27
    )
    
    $
    0.09Diluted earnings (loss) per
share
    
    $
    (0.68
    )
    
    $
    0.02
    
    
    $
    (0.27
    )
    
    $
    0.08
 Proton Oil & Gas Corporation
   Sale of Royalty Interest Properties
  PHAWK, LLC Transaction
  Recapitalization by PHAWK
  11




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3. OIL AND GAS PROPERTY
  4. LONG-TERM DEBT
 Revolving Credit Facility
     Term B Facility Loan
   12




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97⁄8% Notes
     Year
    
    Percentage2008
    
    
    104.94
    %2009
    
    
    102.47
    %2010
    
    
    100.00
    %
   Subordinated Convertible Note Payable
  Debt Issuance Costs
   13




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5. ASSET RETIREMENT OBLIGATIONS
   (in thousands)Beginning balance
    
    $
    12,726Liabilities settled and divested
    
    
    (821
    )Liabilities added
    
    
    345Acquisitions (1)
    
    
    38,473Accretion expense
    
    
    716Ending balance
    
    $
    51,439
 
 (1)
    Includes the acquisitions of Mission Resources Corporation and Proton Energy Corporation.
Refer to Note 2, Acquisitions and Divestitures for more details. 6.
COMMITMENTS, CONTINGENCIES AND LITIGATION
 Contingencies
and Litigation
   Andrew
A. Roth derivatively on behalf of Petrohawk Energy Corporation v.
PHAWK, LLC, et. al.,
 14




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7 DERIVATIVE AND HEDGING ACTIVITIES
      Natural Gas
  Contract Price per MmbtuCollarsFloors
    
    
    CeilingsVolume in
    
    
    Price /
    
    
    Weighted
    
    
    Price /
    
    
    WeightedPeriod
    
    Mmbtu's
    
    
    Price Range
    
    
    Average Price
    
    
    Price Range
    
    
    Average PriceOctober 2005 - December 2005
    
    
    4,437,000
    
    
    $
    4.25 - $7.00
    
    
    $
    5.78
    
    
    $
    5.14  - $10.05
    
    
    $
    8.57January 2006 - December 2006
    
    
    15,175,000
    
    
    
    5.00 - 6.26
    
    
    
    5.79
    
    
    
    7.08 - 10.87
    
    
    
    9.05January 2007 - December 2007
    
    
    6,530,000
    
    
    
    5.30 - 6.00
    
    
    
    5.69
    
    
    
    7.12 - 13.35
    
    
    
    10.60January 2008 - December 2008
    
    
    3,600,000
    
    
    
    5.00 - 5.15
    
    
    
    5 .05
    
    
    
    6.45 - 6.71
    
    
    
    6.53
  Contract Price per MmbtuSwapsVolume in
    
    
    WeightedPeriod
    
    Mmbtu's
    
    
    Average PriceJanuary 2007 - December 2007
    
    
    1,200,000
    
    
    $
    6.06
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Crude Oil
  Contract Price per BblCollarsFloors
    
    
    CeilingsVolume in
    
    
    Price /
    
    
    Weighted
    
    
    Price /
    
    
    WeightedPeriod
    
    Bbls
    
    
    Price Range
    
    
    Average Price
    
    
    Price Range
    
    
    Average PriceOctober 2005 - December 2005
    
    
    426,600
    
    
    $
    26.00 - $46.65
    
    
    $
    36.99
    
    
    $
    27.09 - $63.30
    
    
    $
    45.83January 2006 - December 2006
    
    
    1,338,750
    
    
    
    26.03 - 45.48
    
    
    
    38.17
    
    
    
    30.15 - 62.70
    
    
    
    50.78January 2007 - December 2007
    
    
    240,000
    
    
    
    35.00 - 36.00
    
    
    
    35.30
    
    
    
    43.20 - 45.75
    
    
    
    43.97January 2008 - December 2008
    
    
    60,000
    
    
    
    34.00
    
    
    
    34.00
    
    
    
    45.30
    
    
    
    45.30
  Contract Price per BblSwapsVolume in
    
    
    WeightedPeriod
    
    Bbls
    
    
    Average PriceJanuary 2008 - December 2008
    
    
    144,000
    
    
    $
    38.10
 8. STOCKHOLDERS EQUITY
  Stock Option Grants
  Restricted Stock
  16




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Common Stock Warrants
  Treasury Stock
  9. RELATED PARTY TRANSACTIONS
     10. NET LOSS PER COMMON SHARE
  17




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(In thousands, except
per share amounts)
    
    
    (In thousands, except
per share amounts)Basic:Net loss
    
    $
    (36,424
    )
    
    $
    (601
    )
    
    $
    (52,878
    )
    
    $
    (982
    )Less: Preferred dividends
    
    
    (110
    )
    
    
    (111
    )
    
    
    (329
    )
    
    
    (333
    )Net loss applicable to common shareholders
    
    $
    (36,534
    )
    
    $
    (712
    )
    
    $
    (53,207
    )
    
    $
    (1,315
    )Weighted average number of common shares
    
    
    64,877
    
    
    
    13,818
    
    
    
    48,425
    
    
    
    9,763Basic loss per share
    
    $
    (0.56
    )
    
    $
    (0.05
    )
    
    $
    (1.10
    )
    
    $
    (0.13
    )Diluted:Net loss applicable to common shareholders
    
    $
    (36,534
    )
    
    $
    (712
    )
    
    $
    (53,207
    )
    
    $
    (1,315
    )Plus: Preferred dividends (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Plus: Interest on 8% subordinated
convertible note
payable (net of tax)
(1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss for diluted loss per share
    
    $
    (36,534
    )
    
    $
    (712
    )
    
    $
    (53,207
    )
    
    $
    (1,315
    )Weighted average number of common shares
    
    
    64,877
    
    
    
    13,818
    
    
    
    48,425
    
    
    
    9,763Common stock equivalent shares  stock
options
    
    Antidilutive
    
    Antidilutive
    
    Antidilutive
    
    AntidilutiveCommon stock equivalent shares  warrants
    
    Antidilutive
    
    Antidilutive
    
    Antidilutive
    
    AntidilutiveCommon stock equivalent shares
representing shares as-if conversion of
convertible subordinated note payable
    
    Antidilutive
    
    Antidilutive
    
    Antidilutive
    
    AntidilutiveCommon stock equivalent shares
representing shares as-if conversion of
preferred shares
    
    Antidilutive
    
    Antidilutive
    
    Antidilutive
    
    AntidilutiveWeighted average number of shares used in
calculation of diluted loss per share
    
    
    64,877
    
    
    
    13,818
    
    
    
    48,425
    
    
    
    9,763Diluted loss per share
    
    $
    (0.56
    )
    
    $
    (0.05
    )
    
    $
    (1.10
    )
    
    $
    (0.13
    )
 
 (1)
    
    Due to the antidilutive nature of these items, these amounts have been
excluded from the diluted earnings per share calculation for the three and nine months ended
September 30, 2005 and 2004.  Period Ended September 30,2005
    
    
    2004(In thousands)Options
    
    
    3,176
    
    
    
    682Warrants
    
    
    2,722
    
    
    
    5,832As-if conversion of:Subordinated Convertible Note Payable
    
    
    
    
    
    
    8,750Preferred Stock
    
    
    297
    
    
    
    2996,195
    
    
    
    15,563
 18




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##### Table of Contents



11. SUPPLEMENTAL GUARANTOR INFORMATION  UNAUDITED
  CONDENSED CONSOLIDATING BALANCE SHEETS  UNAUDITED
As of September 30, 2005
(In thousands)
 GuarantorPetrohawk
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedTotal current assets
    
    $
    66,260
    
    
    $
    31,175
    
    
    $
    
    
    
    $
    97,435Net property, plant and equipment
    
    
    273,417
    
    
    
    852,452
    
    
    
    
    
    
    
    1,125,869Investment in subsidiaries
    
    
    874,369
    
    
    
    
    
    
    
    (873,906
    )
    
    
    463Total other assets
    
    
    113,928
    
    
    
    31,189
    
    
    
    
    
    
    
    145,117Total assets
    
    $
    1,327,974
    
    
    $
    914,816
    
    
    $
    (873,906
    )
    
    $
    1,368,884Total current liabilities
    
    $
    150,923
    
    
    $
    14,096
    
    
    $
    
    
    
    $
    165,019Long-term debt
    
    
    460,331
    
    
    
    
    
    
    
    
    
    
    
    460,331Deferred taxes
    
    
    71,326
    
    
    
    88,443
    
    
    
    
    
    
    
    159,769Other long-term liabilities
    
    
    191,557
    
    
    
    (88,716
    )
    
    
    
    
    
    
    102,841Total stockholders equity
    
    
    453,837
    
    
    
    900,993
    
    
    
    (873,906
    )
    
    
    480,924Total liabilities and stockholders equity
    
    $
    1,327,974
    
    
    $
    914,816
    
    
    $
    (873,906
    )
    
    $
    1,368,884
 CONDENSED CONSOLIDATING INCOME STATEMENTS  UNAUDITED
For the Year Ended September 30, 2005
(In thousands)
 GuarantorPetrohawk
    
    
    Subsidiaries
    
    
    Eliminations
    
    

ConsolidatedRevenues
    
    $
    21,015
    
    
    $
    122,499
    
    
    $
    
    
    
    $
    143,514Equity in earnings of subsidiaries
    
    
    27,925
    
    
    
    
    
    
    
    (27,925
    )
    
    
    Expenses
    
    
    152,980
    
    
    
    76,933
    
    
    
    
    
    
    
    229,913Net earnings before income taxes
    
    
    (104,040
    )
    
    
    45,566
    
    
    
    (27,925
    )
    
    
    (86,399
    )Income taxes (benefit)
    
    
    (51,162
    )
    
    
    17,641
    
    
    
    
    
    
    
    (33,521
    )Net earnings (loss)
    
    $
    (52,878
    )
    
    $
    27,925
    
    
    $
    (27,925
    )
    
    $
    (52,878
    )
 19




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##### Table of Contents



CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS  UNAUDITED
For the Year Ended September 30, 2005
(In thousands)
 GuarantorPetrohawk
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net income (loss)
    
    $
    (52,878
    )
    
    $
    27,925
    
    
    $
    (27,925
    )
    
    $
    (52,878
    )Non-cash adjustments
    
    
    71,658
    
    
    
    25,569
    
    
    
    27,925
    
    
    
    125,152Changes in assets and liabilities
    
    
    28,511
    
    
    
    (25,014
    )
    
    
    
    
    
    
    3,497Net cash provided by operating activities
    
    
    47,291
    
    
    
    28,480
    
    
    
    
    
    
    
    75,771Cash flows from investing activities:Net property, plant & equipment
    
    
    (64,423
    )
    
    
    (83,601
    )
    
    
    
    
    
    
    (148,024
    )Gas
gathering and equipment expenditures and other
    
    
    (1,005
    )
    
    
    (736
    )
    
    
    
    
    
    
    (1,741
    )Other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    (65,428
    )
    
    
    (84,337
    )
    
    
    
    
    
    
    (149,765
    )Cash flows from financing activities:Proceeds from borrowings
    
    
    310,000
    
    
    
    
    
    
    
    
    
    
    
    310,000Repayment of
borrowings
    
    
    (249,000
    )
    
    
    
    
    
    
    
    
    
    
    (249,000
    )Proceeds from exercise of stock options
    
    
    11,780
    
    
    
    
    
    
    
    
    
    
    
    11,780Dividends
paid
    
    
    (220
    )
    
    
    
    
    
    
    
    
    
    
    (220
    )Other
    
    
    (46
    )
    
    
    
    
    
    
    
    
    
    
    (46
    )Net cash provided by financing
activities
    
    
    72,514
    
    
    
    
    
    
    
    
    
    
    
    72,514Net increase (decrease) in cash and cash
equivalents
    
    
    54,377
    
    
    
    (55,857
    )
    
    
    
    
    
    
    (1,480
    )Cash and cash equivalents at beginning of period
    
    
    4,072
    
    
    
    1,588
    
    
    
    
    
    
    
    5,660Cash and cash equivalents at end of period
    
    $
    58,449
    
    
    $
    (54,269
    )
    
    $
    
    
    
    $
    4,180
 20




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
   Overview
       Capital Resources and Liquidity
  21




---



##### Table of Contents



Nine Months EndedSeptember 30,2005
    
    
    2004Cash flows provided by operating activities
    
    $
    75,771
    
    
    $
    3,313Cash flows used in investing activities
    
    
    (149,765
    )
    
    
    (9,066
    )Cash flows (used in) provided by financing
activities
    
    
    72,514
    
    
    
    38,739Net increase (decrease) in cash and cash equivalents
    
    $
    (1,480
    )
    
    $
    32,986
 Operating Activities
 Investing Activities.
 Financing Activities.
  Contractual Obligations
  Critical Accounting Policies and Estimates
  22




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##### Table of Contents



Results of Operations
 Quarters ended September 30, 2005 and 2004
  Three Months EndedIn Thousands (Except price and per Mcfe amounts)
    
    September 30,Increase2005
    
    
    2004
    
    
    (Decrease)Net loss
    
    $
    (36,424
    )
    
    $
    (601
    )
    
    $
    (35,823
    )Oil and gas sales
    
    
    81,447
    
    
    
    5,589
    
    
    
    75,858Production expenses:Lease operating
    
    
    10,276
    
    
    
    887
    
    
    
    9,389Workover and other
    
    
    941
    
    
    
    36
    
    
    
    905Taxes other than income
    
    
    6,405
    
    
    
    291
    
    
    
    6,114Gathering, transportation and other
    
    
    515
    
    
    
    
    
    
    
    515General and administrative:General and administrative
    
    
    5,782
    
    
    
    1,597
    
    
    
    4,185Stock-based compensation
    
    
    780
    
    
    
    898
    
    
    
    (118
    )Accretion expense
    
    
    332
    
    
    
    23
    
    
    
    309Depletion  Full cost
    
    
    22,184
    
    
    
    1,146
    
    
    
    21,038Depreciation  Other
    
    
    214
    
    
    
    125
    
    
    
    89Net loss on derivative contracts:Unrealized loss on derivative contracts
    
    
    (74,912
    )
    
    
    (592
    )
    
    
    (74,320
    )Realized loss on derivative contracts
    
    
    (8,673
    )
    
    
    
    
    
    
    (8,673
    )Interest expense and other (1)
    
    
    (9,923
    )
    
    
    (656
    )
    
    
    (9,267
    )Income tax benefit (expense)
    
    
    23,066
    
    
    
    61
    
    
    
    23,005Production:Natural Gas  Mmcf
    
    
    6,102.9
    
    
    
    604.9
    
    
    
    5,498.0Crude Oil  Mbbl
    
    
    488.2
    
    
    
    44.6
    
    
    
    443.6Natural Gas Equivalent  Mmcfe
    
    
    9,032.1
    
    
    
    872.8
    
    
    
    8,159.3Daily Production  Mmcfe
    
    
    98.2
    
    
    
    9.5
    
    
    
    88.7Average sales price per unit(2):Gas price per Mcf
    
    $
    8.47
    
    
    $
    6.03
    
    
    $
    2.44Oil price per Bbl
    
    
    60.87
    
    
    
    42.18
    
    
    
    18.69Equivalent price per Mcfe
    
    
    9.02
    
    
    
    6.34
    
    
    
    2.68Average cost per Mcfe:Lease operating
    
    
    1.14
    
    
    
    1.02
    
    
    
    0.12Workover and other
    
    
    0.10
    
    
    
    0.04
    
    
    
    0.06Taxes other than income
    
    
    0.71
    
    
    
    0.33
    
    
    
    0.38Gathering, transportation and other
    
    
    0.06
    
    
    
    
    
    
    
    0.06General and administrative
    
    
    0.64
    
    
    
    1.83
    
    
    
    (1.19
    )Depletion  full cost
    
    
    2.46
    
    
    
    1.31
    
    
    
    1.15
 
 (1)Includes $2.9 million related to the modification of the Term Loan
during the third quarter of 2005.(2)Amounts exclude the realized and unrealized impact of derivatives, as
the Company does not apply hedge accounting. 
 23




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24




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##### Table of Contents



Nine Months ended September 30, 2005 and 2004
   Nine Months EndedSeptemberIncreaseIn Thousands (Except price and per Mcfe amounts)
    
    2005
    
    
    2004
    
    
    (Decrease)Net loss
    
    $
    (52,878
    )
    
    $
    (982
    )
    
    $
    (51,896
    )Oil and gas sales
    
    
    149,957
    
    
    
    14,629
    
    
    
    135,328Production expenses:Lease operating
    
    
    19,826
    
    
    
    2,531
    
    
    
    17,295Workover and other
    
    
    2,180
    
    
    
    53
    
    
    
    2,127Taxes other than income
    
    
    10,842
    
    
    
    780
    
    
    
    10,062Gathering, transportation and other
    
    
    1,135
    
    
    
    5
    
    
    
    1,130General and administrative:General and administrative
    
    
    13,258
    
    
    
    4,017
    
    
    
    9,241Stock-based compensation
    
    
    3,003
    
    
    
    2,925
    
    
    
    78Accretion expense
    
    
    716
    
    
    
    69
    
    
    
    647Depletion  Full cost
    
    
    44,087
    
    
    
    2,168
    
    
    
    41,959Depreciation  Other
    
    
    435
    
    
    
    1,364
    
    
    
    (969
    )Net loss on derivative contracts:Unrealized loss on derivative contracts
    
    
    (109,541
    )
    
    
    (592
    )
    
    
    (108,949
    )Realized loss on derivative contracts
    
    
    (11,027
    )
    
    
    
    
    
    
    (11,027
    )Interest expense and other (1)
    
    
    (20,306
    )
    
    
    (1,131
    )
    
    
    (19,175
    )Income tax benefit (expense)
    
    
    33,521
    
    
    
    24
    
    
    
    33,497Production:Natural Gas  Mmcf
    
    
    13,089.3
    
    
    
    1,662.7
    
    
    
    11,426.6Crude Oil  Mbbl
    
    
    984.1
    
    
    
    114.7
    
    
    
    869.4Natural Gas Equivalent  Mmcfe
    
    
    18,993.9
    
    
    
    2,350.8
    
    
    
    16,643.1Daily Production  Mmcfe
    
    
    69.6
    
    
    
    8.6
    
    
    
    61.0Average sales price per unit(2):Gas price per Mcf
    
    $
    7.34
    
    
    $
    6.03
    
    
    $
    1.31Oil price per Bbl
    
    
    54.46
    
    
    
    37.93
    
    
    
    16.53Equivalent price per Mcfe
    
    
    7.88
    
    
    
    6.12
    
    
    
    1.76Average cost per Mcfe:Lease operating
    
    
    1.04
    
    
    
    1.08
    
    
    
    (0.04
    )Workover and other
    
    
    0.11
    
    
    
    0.02
    
    
    
    0.09Taxes other than income
    
    
    0.57
    
    
    
    0.33
    
    
    
    0.24Gathering, transportation and other
    
    
    0.06
    
    
    
    0.00
    
    
    
    0.06General and administrative
    
    
    0.70
    
    
    
    1.71
    
    
    
    (1.01
    )Depletion  full cost
    
    
    2.32
    
    
    
    0.92
    
    
    
    1.40
 
 (1)Includes a charge of $3.5 million related to the conversion of the
PHAWK Note and $2.9 million related to the modification of the Term Loan.(2)Amounts exclude the realized and unrealized impact of derivatives, as
the Company does did not apply hedge accounting. 
 25




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26




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##### Table of Contents



Recently Issued Accounting Pronouncements
 Accounting for Conditional Asset Retirement Obligations Accounting for Asset Retirement Obligations
  Share-Based Payment Accounting for Stock Based Compensation Accounting for Stock Issued to Employees
  Exchanges of Nonmonetary Assets  an amendment of APB
Opinion 29
 Forward-Looking Information
  27




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosure about Market Risk
 Derivative Instruments and Hedging Activity
     Natural Gas
 Contract Price per MmbtuCollarsFloors
    
    
    CeilingsVolume in
    
    
    Price /
    
    
    Weighted
    
    
    Price /
    
    
    WeightedPeriod
    
    Mmbtu's
    
    
    Price Range
    
    
    Average Price
    
    
    Price Range
    
    
    Average PriceOctober 2005 - December 2005
    
    
    4,437,000
    
    
    $
    4.25 - $7.00
    
    
    $
    5.78
    
    
    $
    5.14  - $10.05
    
    
    $
    8.57January 2006 - December 2006
    
    
    15,175,000
    
    
    
    5.00 - 6.26
    
    
    
    5.79
    
    
    
    7.08 - 10.87
    
    
    
    9.05January 2007 - December 2007
    
    
    6,530,000
    
    
    
    5.30 - 6.00
    
    
    
    5.69
    
    
    
    7.12 - 13.35
    
    
    
    10.60January 2008 - December 2008
    
    
    3,600,000
    
    
    
    5.00 - 5.15
    
    
    
    5.05
    
    
    
    6.45 - 6.71
    
    
    
    6.53
  Contract Price per MmbtuSwapsVolume in
    
    
    WeightedPeriod
    

Mmbtus
    
    
    Average PriceJanuary 2007 - December 2007
    
    
    1,200,000
    
    
    $
    6.06
 28




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##### Table of Contents



Crude Oil
  Contract Price per BblCollarsFloors
    
    
    CeilingsVolume in
    
    
    Price /
    
    
    Weighted
    
    
    Price /
    
    
    WeightedPeriod
    
    Bbls
    
    
    Price Range
    
    
    Average Price
    
    
    Price Range
    
    
    Average PriceOctober 2005 - December 2005
    
    
    426,600
    
    
    $
    26.00 - $46.65
    
    
    $
    36.99
    
    
    $
    27.09 - $63.30
    
    
    $
    45.83January 2006 - December 2006
    
    
    1,338,750
    
    
    
    26.03 - 45.48
    
    
    
    38.17
    
    
    
    30.15 - 62.70
    
    
    
    50.78January 2007 - December 2007
    
    
    240,000
    
    
    
    35.00 - 36.00
    
    
    
    35.30
    
    
    
    43.20 - 45.75
    
    
    
    43.97January 2008 - December 2008
    
    
    60,000
    
    
    
    34.00
    
    
    
    34.00
    
    
    
    45.30
    
    
    
    45.30
  Contract Price per BblSwapsVolume in
    
    
    WeightedPeriod
    
    Bbls
    
    
    Average PriceJanuary 2008 - December 2008
    
    
    144,000
    
    
    $
    38.10
 .
 
 Item 4. Controls and Procedures
   29




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##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 4. Submission of Matters to a Vote of Security Holders
   Director Nominee
    
    Shares For
    
    
    Shares Againsta. Floyd C. Wilson
    
    
    32,891,757
    
    
    
    902,162b. Tucker S. Bridwell
    
    
    33,534,636
    
    
    
    259,283
  Shares For
    
    Shares Against
    
    
    Shares Abstaining or Withheld29,058,306
    
    
    63,595
    
    
    
    7,699
  Shares For
    
    Shares Against
    
    
    Shares Abstaining or Withheld27,684,562
    
    
    201,694
    
    
    
    1,243,344
  Shares For
    
    Shares Against
    
    
    Shares Abstaining or Withheld25,579,792
    
    
    2,296,075
    
    
    
    1,253,733
  Shares For
    
    Shares Against
    
    
    Shares Abstaining or Withheld25,580,431
    
    
    2,294,415
    
    
    
    1,254,755
  Shares For
    
    Shares Against
    
    
    Shares Abstaining or Withheld33,749,833
    
    
    24,625
    
    
    
    19,461
 30




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##### Table of Contents



Item
6.  Exhibits
  2.1
    
    
    Agreement and Plan of Merger, dated April 3, 2005 (and as
amended through June 8, 2005), by and among Petrohawk
Energy Corporation, Petrohawk Acquisition Corporation, and
Mission Resources Corporation (Incorporated by reference
to Annex A of our Registration Statement on Form S-4/A
filed on June 22, 2005)2.2
    
    
    Agreement and Plan of Merger, dated October 13, 2004, among Petrohawk Energy Corporation, Wynn-Crosby Energy, Inc., Ronald
W. Crosby and Paige L. Crosby (Incorporated by reference to Exhibit 2.1 of our Current Report on Form 8-K filed on November
24, 2004)2.3
    
    
    Agreement and Plan of Mergers, dated October 13, 2004, among Petrohawk Energy Corporation, Wynn-Crosby Energy, Inc.,
Wynn-Crosby 1994, Ltd.; Wynn-Crosby 1995, Ltd.; Wynn-Crosby 1996, Ltd.; Wynn-Crosby 1997, Ltd.; Wynn-Crosby 1998, Ltd.;
Wynn-Crosby 1999, Ltd.; Wynn-Crosby 2000, Ltd.; Wynn-Crosby 2002, Ltd.; WCOG Properties, Ltd.; Kara Nicole Limited; Kristen
Lee Limited; Eric Wynn Limited; Christopher David Limited; Paige Lee Limited; Bernadien Wynn Limited; Roger Lee Limited;
and George Heaps Limited, and Ronald W. Crosby (Incorporated by reference to Exhibit 2.2 of our Current Report on Form 8-K
filed on November 24, 2004)2.4
    
    
    Amendment to Agreement and Plan of Mergers among Petrohawk Energy Corporation, Wynn-Crosby Energy, Inc., Wynn-Crosby 1994,
Ltd.; Wynn-Crosby 1995, Ltd.; Wynn-Crosby 1996, Ltd.; Wynn-Crosby 1997, Ltd.; Wynn-Crosby 1998, Ltd.; Wynn-Crosby 1999,
Ltd.; Wynn-Crosby 2000, Ltd.; Wynn-Crosby 2002, Ltd.; WCOG Properties, Ltd.; Kara Nicole Limited; Kristen Lee Limited; Eric
Wynn Limited; Christopher David Limited; Paige Lee Limited; Bernadien Wynn Limited; Roger Lee Limited; and George Heaps
Limited, and Ronald W. Crosby, dated October 26, 2004 (Incorporated by reference to Exhibit 2.3 of our Current Report on
Form 8-K filed on November 24, 2004)3.1
    
    
    Certificate of Incorporation for Petrohawk Energy 2004 Corporation (Incorporated by reference to Exhibit 3.1 to the Form
S-8 that we filed on July 29, 2004)3.2
    
    
    Certificate of Amendment of Certificate of Incorporation of Petrohawk Energy Corporation (Incorporated by reference to
Exhibit 3.1 of our Current Report on Form 8-K filed on November 24, 2004)3.3
    
    
    Certificate of Amendment of Certificate of Incorporation of Petrohawk Energy Corporation (Incorporated by reference to
Exhibit 3.1 of our Current Report on Form 8-K filed on August 3, 2005)3.4
    
    
    Amended and Restated Bylaws of Petrohawk Energy Corporation (Incorporated by reference to Exhibit 3.2 of our Third Quarter
2004 Form 10-Q filed on August 13, 2004)4.1
    
    
    Form of Warrant Agreement covering warrants issued to employees as employment inducements (Incorporated by reference to
Exhibit 4.1 of Beta Oil & Gas, Inc.s Annual Report on Form 10-K for the year ended December 31, 2003 filed on March 26,
2004)4.2
    
    
    Warrant Agreement between Beta Oil & Gas, Inc. and Brookstreet Securities dated July 30, 1999 (Incorporated by reference to
Exhibit 4.2 of Beta Oil & Gas, Inc.s Annual Report for the year ended December 31, 2003 Form 10-K filed on March 26, 2004)4.3
    
    
    Form of Warrant Agreement with suppliers, service providers and other third parties (Incorporated by reference to Exhibit
4.3 of Beta Oil & Gas, Inc.s Annual Report for the year ended December 31, 2003 Form 10-K filed on March 26, 2004)4.4
    
    
    Certificate of Designation of Beta Oil & Gas, Inc.s 8% Cumulative Convertible Preferred Stock (Incorporated by reference
to Exhibit 3.1 of Betas Form 8-K filed on July 3, 2001)4.5
    
    
    Certificate of Designation, Preferences, Rights and Limitations of Series B 8% Automatically Convertible Preferred Stock of
Petrohawk Energy Corporation (Incorporated by reference to Exhibit 10.4 of our Current Report on Form 8-K filed on November
24, 2004)4.6
    
    
    Warrant Agreement between Beta Oil & Gas, Inc. and its preferred shareholders, including Warrant Certificates A and B
(Incorporated by reference to Exhibit 4.1 of Beta Oil & Gas, Inc.s Form 8-K filed on July 3, 2001)4.7
    
    
    Registration Rights Agreement dated April 1, 2005 among Petrohawk Energy Corporation and the certain parties set forth on
Exhibit A of the Registration Rights Agreement (Incorporated by reference to Exhibit 4.6 of our First Quarter 2005 Form
10-Q filed on May 12, 2005)4.8
    
    
    Registration Rights Agreement dated November 23, 2004, among Petrohawk Energy Corporation and Friedman, Billings, Ramsey &
Co., Inc. (Incorporated by reference to Exhibit 10.5 of our Current Report on Form 8-K filed on November 24, 2004)
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4.9
    
    
    Registration Rights Agreement, dated May 25, 2004, between Beta and PHAWK, LLC (Incorporated by reference to Exhibit 4.11
to our Registration Statement No. 333-120881 on Form S-3 filed December 1, 2004)10.1
    
    
    The Petrohawk Energy Corporation Amended and Restated 1999 Incentive and Nonstatutory Stock Option Plan (Incorporated by
reference to Exhibit 99.3 of our Current Report on Form 8-K filed on August 18, 2004)10.2
    
    
    The Petrohawk Energy Corporation Second Amended and Restated 2004 Non-Employee Director Incentive Plan (Incorporated by
reference to Exhibit 4.1 to our Registration Statement No. 333-117733 on Form S-8 filed July 29, 2005)10.3
    
    
    Form of Stock Option Agreement for the Second Amended and Restated 2004 Non-Employee Director Incentive Plan. (Incorporated
by reference to Exhibit 10.3 of our Second Quarter 2005 Form 10-Q filed on August 11, 2005)10.4
    
    
    Form of Restricted Stock Agreement for the Second Amended and Restated 2004 Non-Employee Director Incentive Plan.
(Incorporated by reference to Exhibit 10.4 of our Second Quarter 2005 Form 10-Q filed on August 11, 2005)10.5
    
    
    Form of Incentive Stock Agreement for the Second Amended and Restated 2004 Non-Employee Director Incentive Plan
(Incorporated by reference to Exhibit 10.5 of our Second Quarter 2005 Form 10-Q filed on August 11, 2005)10.6
    
    
    The Petrohawk Energy Corporation Second Amended and Restated 2004 Employee Incentive Plan, (Incorporated by reference to
Exhibit 4.2 to our Registration Statement No. 333-117733 on Form S-8 filed July 29, 2005)10.7
    
    
    Form of Stock Option Agreement for the Second Amended and Restated 2004 Employee Incentive Plan. (Incorporated by reference
to Exhibit 10.7 of our Second Quarter 2005 Form 10-Q filed on August 11, 2005)10.8
    
    
    Form of Restricted Stock Agreement for the Second Amended and Restated 2004 Employee Incentive Plan (Incorporated by
reference to Exhibit 10.8 of our Second Quarter 2005 Form 10-Q filed on August 11, 2005)10.9
    
    
    Form of Incentive Stock Agreement for the Second Amended and Restated 2004 Employee Incentive Plan (Incorporated by reference to Exhibit
10.9 of our Second Quarter 2005 Form 10-Q filed on August 11, 2005)10.10
    
    
    Mission Resources Corporation 1994 Stock Incentive Plan (Incorporated by reference to Exhibit 10.9 of Mission Resources
Corporations Registration Statement No. 33-76570 filed on March 17, 1994) (File No. 000-9498)10.11
    
    
    Mission Resources Corporation 1996 Stock Incentive Plan (Incorporated by reference to Exhibit A of Mission Resources
Corporations Proxy Statement on Schedule 14A filed on October 21, 1996) (File No. 000-9498)10.12
    
    
    Mission Resources Corporation 2004 Incentive Plan (Incorporated by reference to Appendix C to Mission Resources
Corporations Proxy Statement on Schedule 14A filed on March 30, 2004) (File No. 000-9498)10.13
    
    
    Nonstatutory Stock Option Grant Agreement dated as of November 1, 2004, between Mission Resources Corporation and Thomas C.
Langford (Incorporated by reference to Exhibit 10.1 to Mission Resources Corporations Current Report on Form 8-K filed on
November 2, 2004) (File No. 000-9498)10.14
    
    
    Nonstatutory Stock Option Grant Agreement dated as of March 14, 2005, between Mission Resources Corporation and William R.
Picquet (Incorporated by reference to Exhibit 10.2 to Mission Resources Corporations Current Report on Form 8-K filed on
March 16, 2005) (File No. 000-9498)10.15
    
    
    Form of Director and Officer Indemnity Agreement (Incorporated by reference to Exhibit 10.11 of our Annual Report on Form
10-K filed on March 31, 2005)10.16
    
    
    Securities Purchase Agreement dated December 12, 2003 between Beta Oil & Gas, Inc. and Petrohawk Energy, LLC (Incorporated
by reference to Appendix A to Betas Preliminary Proxy Statement filed on Schedule 14A on January 9, 2004)10.17
    
    
    Amended and Restated Senior Revolving Credit Agreement dated July 28, 2005, among Petrohawk Energy Corporation, each of the
Lenders from time to time party thereto, BNP Paribas as administrative agent for the Lenders, Bank of America, N.A., as
syndication agent for the Lenders, and JPMorgan Chase Bank, N.A. and Wells Fargo Bank, N.A., as co-documentation agents for
the Lenders (Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on August 3, 2005)10.18
    
    
    Amended and Restated Second Lien Term Loan Agreement dated July 28, 2005, among Petrohawk Energy Corporation, as Borrower,
and BNP Paribas, as Administrative Agent, and the lenders party thereto (Incorporated by reference to Exhibit 10.2 of our
Current Report on Form 8-K filed on August 3, 2005)10.19
    
    
    Amended and Restated Guarantee and Collateral Agreement dated July 28, 2005, made by Petrohawk Energy Corporation and each
of its subsidiaries, as Grantors, in favor of BNP Paribas, as Administrative Agent (Incorporated by reference to Exhibit
10.3 to our Current Report on Form 8-K filed on August 3, 2005)10.20
    
    
    Amended and Restated Second Lien Term Loan Agreement Amended and Restated Guarantee and Collateral Agreement dated July 28,
2005, made by Petrohawk Energy Corporation and each of its subsidiaries, as Grantors, in favor of BNP Paribas, as
Administrative Agent (Incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on August 3, 2005)
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10.21
    
    
    Convertible Promissory Note dated May 25, 2004 between PHAWK, LLC f/k/a Petrohawk Energy, LLC and the Company (Incorporated
by reference to Exhibit 10.16 of our Annual Report on Form 10-K filed on March 31, 2005)10.22
    
    
    Agreement to Amend Note dated June 30, 2005 between Petrohawk Energy Corporation and PHAWK, LLC (Incorporated by reference
to Exhibit 11 of Schedule 13D/A filed by PHAWK, LLC on July 19, 2005)10.23
    
    
    Purchase and Sale Agreement executed January 14, 2005, by and between Wynn-Crosby 1994, Ltd., et al and Noble Royalties,
Inc. d/b/a Brown Drake Royalties (Incorporated by reference to Exhibit 2.1 to our Current Form 8-K filed on March 3, 2005)10.24
    
    
    Amendment to Purchase and Sale Agreement executed on February 15, 2005, by and between Wynn-Crosby 1994, Ltd., et al and
Noble Royalty, Inc. d/b/a Brown Drake Royalties (Incorporated by reference to Exhibit 2.2 to our Current Form 8-K filed on
March 3, 2005)10.25
    
    
    Stock Purchase Agreement dated February 4, 2005 by and among the Company and Proton Oil & Gas Corporation, et al
(Incorporated by reference to Exhibit 2.3 to our Current Form 8-K filed on March 3, 2005)10.26
    
    
    Agreement of Sale and Purchase dated August 11, 2004, by and between the Company and PHAWK, LLC (Incorporated by reference
to Exhibit 10.20 of our Annual Report on Form 10-K filed on March 31, 2005)10.27
    
    
    Indenture dated as of April 8, 2004, among Mission Resources Corporation, the Guarantors named therein and The Bank of New
York, as Trustee, relating to the Companys 9-7/ 8 % Senior Notes due 2011 (Incorporated by reference to
Exhibit 4.1 to Mission Resources Corporations Current Report on Form 8-K/A filed on April 15, 2004)10.28
    
    
    First Supplemental Indenture dated as of July 28, 2005, among Petrohawk Energy Corporation, the successor by way of merger
to Mission Resources Corporation, the parties named therein as Existing Subsidiary Guarantors, the parties named therein as
Additional Subsidiary Guarantors, and The Bank of New York Trust Company, N.A., as successor trustee to The Bank of New
York (Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed on August 3, 2005)31.1
    
    
    Certificate of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002 (Third Quarter 2005 Form 10-Q)31.2
    
    
    Certificate of Chief Financial Officer under Section 302 of Sarbanes-Oxley Act of 2002 (Third Quarter 2005 Form 10-Q)32.1
    
    
    Certificate of Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002
(Third Quarter 2005 Form 10-Q)
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SIGNATURES
  PETROHAWK ENERGY CORPORATIONDate: November 10, 2005
    By:
    /s/ Floyd C. WilsonFloyd C. WilsonChief Executive Officer and PresidentBy:
    /s/ Shane M. BaylessShane M. BaylessExecutive Vice President, Chief Financial Officer and Treasurer 34




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31.1
    
    

Certificate
of Chief Executive Officer under Section 302 of the
Sarbanes-Oxley Act of 2002 (Third Quarter 2005 Form 10‐Q)31.2
    
    
    Certificate of Chief Financial Officer under Section 302 of Sarbanes-Oxley Act of 2002 (Third Quarter 2005 Form 10-Q)32.1
    
    
    Certificate of Chief Executive Officer and Chief Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002
(Third Quarter 2005 Form 10-Q)