West Hawk Development Corp. (www.westhawkdevelopment.com) drilled its first well to a total depth of 11,090 feet at its Figure Four oil and gas project in Colorado. The well was drilled through the Mancos B zone. According to West Hawk, during the drilling operations, significant gas shows were periodically encountered from the Wasatch formation, located at 2,100 foot depth, throughout the Williams Fork, Iles, Sego, Castlegate, and Mancos A-B formations. The presence of heavier hydrocarbon distillates was also detected.
West Hawk says it appears that gas is present in all the formations anticipated as potential production targets. After the well is logged and cased, which is expected to take approximately one week, the drill rig will be moved to the second well pad site, which is completed, and drilling will commence. A work-over rig will then complete the perforation and stimulation operations on the first well. Initial production is expected to commence in late February or early March.
In other news, West Hawk announced the closing of a nonbrokered private placement totaling $3,400,000. Terms of the financing were announced in news releases dated Jan. 16, 2007, with amendments announced Jan. 19, 2007 and Feb. 8, 2007, and comprise the issuance of 6,800,000 units at a price of $0.50 per unit for gross proceeds of $3,400,000. Each unit consists of one common share of West Hawk, and one nontransferable share purchase warrant. Each nontransferable share purchase warrant will entitle the holder to purchase one additional common share of the company at a price of $0.75 for a period of two years from the closing of the financing.
Gross proceeds from the sale of all 6,800,000 units is $3,400,000, which will be used towards completion of wells one and two at the company’s Figure Four natural gas property (approximately $2,400,000), and for general working capital purposes (approximately $1,000,000). All securities issued pursuant to the financing are subject to a hold period expiring June 15, 2007. Finders fees payable on a portion of the units sold as part of this financing include a total of $151,493 in cash and 20,000 shares. The financing is subject to approval of the TSX Venture Exchange.