January 31, 2008 - Denver, Colorado, USA: West Hawk Development Corp. ("West Hawk") (TSXV: WHD, Frankfurt: H5N) (the "Company") is pleased to provide a progress report on recent activities and future plans from Dr. Wm. Mark Hart, President and Chief Executive Officer:
"Before discussing 2007 results and plans for 2008, I'd like to comment on the Company's vision. West Hawk's management team is focused on building and growing a clean energy gasification company that utilizes state-of-the-art technology advancements in gasification, cooling, cleaning, and output product systems, and incorporates the latest engineering design concepts in emission controls. The Company believes that clean energy products can be profitably produced from coal and other feed stocks, and West Hawk is positioning itself to drive and implement this vision in 2008.
As a dynamic and emerging energy company, we have placed emphasis on assembling a team of individuals capable of executing our plan to build tangible asset value through strategic acquisitions, partnerships, and projects. In keeping with this strategy, we have acquired a number of truly exciting projects. In Canada, we hold coal licenses to three coal properties. Please refer to the NI 43-101 Reports at
www.sedar.com for resource estimates. In the United States, we have acquired drilling rights in the most prolific natural gas field, the Piceance Basin, with vast estimated resources in place. In addition, our Company continues to negotiate potential synergies to utilize our coal assets and our technical expertise, for projects in the US, Canada, and China. We believe these prospects will provide the foundation for accelerating coal gasification growth, advancement of the Company's value, and provide the economies of the world with clean forms of fossil fuels well into the future.
Each of these projects will mature over the next few years, and they all require an intense amount of upfront effort to generate growth in cash flow. Stakeholders in the Company must understand the value building philosophy, as successful growth requires time and a sustained dedicated effort. Our team is dedicated to this effort.
2007 Results
During 2007, our primary areas of focus were on the initial drilling of the Figure Four natural gas property in Colorado, completing and filing the required NI 43-101 technical reports for our Canadian coal properties, and developing long term relationships with future West Hawk partners in the gasification business. This was accomplished by securing two coal gasification contracts with our major Chinese partner Lu'An, and by identifying the technology partner that the Company intends to utilize for gasification, the New York Energy Group. As a result of near-term business opportunities for the technology to be developed in the United States, we evaluated three USA coal properties, two of which are still under evaluation for future development.
At the Figure Four Project, West Hawk completed the drilling requirements of the Drilling and Development Agreement (DDA) by drilling 4 deep wells to depths of approximately 10,000 to 11,000 feet. Wells 1 and 2 are in production and generating cash flow from a production zone that the Company was required to test under the DDA. However, the Company plans to conduct further completion work in the upper production zones of these wells in order to increase production. When this work is completed, the Company believes that the wells will produce at the commercial quantities that were originally expected, and generate significantly more cash flow. Wells 3 and 4 have been fractured in the upper production zones, and are in the completion phase. We are performing final completion work on Well 3 and expect to bring it into commercial production in the very near term. Completion work on Well 4 will start immediately after Well 3 is in production. Well 4 is not expected to be in commercial production for several more weeks, and will be dependent upon how quickly the completion fluids are recovered during the flow back process.
The results in 2007 were significantly impacted by drilling during winter weather conditions, operational problems caused by an inexperienced contract drilling crew, weight restrictions that were imposed on the County Road during the Spring, which delayed the mobilization of completion equipment needed for wells 1 and 2, and third-party delays in completing the pipeline connections on the Rockies Express, which resulted in extremely low natural gas prices due to pipeline overcapacity. Also during 2007, the Company received excellent marks from an independent 3rd party who conducted a complete environmental report and safety inspection on the Figure Four property.
Plans for 2008
The Company's plans for 2008 are focused on three primary fronts: the Figure Four Project, a coal gasification project, and development of the Canadian coal properties.
Figure Four
Although the Company encountered difficulties on the Figure Four Project in 2007, we continue to persevere, and expect much better results in 2008. The Rockies Express Pipeline is now in commercial operation through Kansas and prices for natural gas from the Piceance Basin have doubled. The future price forecast projects gas prices to be over $6.50 per MCF throughout 2008.
The Company's objective in acquiring the rights to drill the 5,000 acre Figure Four property in late-2006 was to generate a source of cash flow in order to drive coal gasification projects forward. The capital investment required to drill additional wells on the property and generate the cash flow that is required for gasification projects, has been very difficult to obtain from financing institutions. Although the property area covered under the DDA is adjacent to other wells in production, the property is considered by financial institutions to be in a new production area. The Company will need to have the existing four wells in production for several months to demonstrate production quantities and minimize the investment risk, before additional financing is obtained from lending institutions. Although additional capital investment in the project is expected to decline as cash flow from future well production is reinvested, in the near term, the Company must continue to raise capital in the equity market or attract additional investors in the project, in order to meet existing obligations, and fund future drilling requirements.
Coal Gasification
West Hawk has partnered with the New York Energy Group (NYEG) because we believe that both companies share a common vision as a clean energy company. West Hawk has evaluated coal/biomass/waste gasification technologies and decided to develop gasification projects with a technology partner that is ready to build a plant that incorporates advancements in traditional coal gasification, and to demonstrate that coal can be converted into clean energy products on a commercial scale. West Hawk's Management believes that the NYEG technology is more efficient and cleaner than other competing technologies. As a result, West Hawk has signed a Letter of Intent with NYEG to acquire a partial interest in NYEG's first gasification plant site. West Hawk will announce details regarding this project in the near future. The synergistic relationship between West Hawk and NYEG will open many doors and opportunities for both companies to demonstrate the economic viability of this technology. Coal and biomass gasification represents the future of the Company, and in Management's view, can help meet the world's future demand for clean energy products for the next several decades. Management's view is based on the abundance of the world's coal resources, which are generally believed to be 26 times more than oil and gas resources, the strategic location of coal resources around the world on all continents, and the belief that coal is the lowest cost feed stock for gasification. New gasification technology allows coal the ability to meet all KYOTO Protocol current and future clean air emission requirements. Coal, biomass, and waste feedstock can also be blended together in the gasification process to produce clean energy commercial products to help the world solve environmental issues including global warming, and enhance the standard of living for all people.
Canadian Coal Properties
Among the coal properties that have been secured by West Hawk, a priority has been placed on the development of the Groundhog property, located in British Columbia. The Groundhog property is believed to be one of the last undeveloped world-class coal deposits of anthracite/metallurgical coal, the highest quality coal available. The Company is currently working on an updated property development plan that it intends to implement in 2008. Details on progress, including a financing plan, will be announced in the near future.
The development of West Hawk's coal assets in the Northwest Territories of Canada, near Tulita, remains an important objective, and has received international attention. The property is located adjacent to the proposed multi-billion dollar Mackenzie Valley Pipeline, which is being spearheaded by Imperial Oil. West Hawk's objective for the property is to develop a mine for the coal feed stock and construct one of the world's largest coal-to-gas processing facilities. The coal was tested by SASOL / LURGI of South Africa, and is suitable for gasification.
Please refer to the NI 43-101 reports at www.sedar.com for more information on the Company's Canadian coal properties.
I thank you for your patience as the Company continues to grow, and look forward to serving your interests in the future. Before closing, I would like to briefly summarize the background and experience of our management team and supporting staff that are driving the Company's clean energy vision going forward."
Roger A. Baer, Chief Financial Officer
Mr. Baer has over 25 years of financial experience in the minerals and natural resource industries. He is a Certified Management Accountant and has held senior positions with Newmont Mining, Cyprus Amax Minerals, Kennecott Energy and Amoco Pipeline Co. Mr. Baer's education includes an accounting degree from Illinois State University and an MBA from the University of Phoenix.
Dr. Jinsheng Chen, President and CEO of Asian Operations
Dr. Chen was born and raised in China. After completing his engineering degree, he moved to the United States where he completed an MS and PhD in Mining Engineering. He has over 25 years of experience in coal mining and the energy business. Dr. Chen has held senior positions with Foundation Coal Company, RAG American Coal, Cyprus Amax Minerals, and Asian American Coal Company. Dr. Chen's education includes mining engineering degrees from the Jiaozuo Mining Institute in China and West Virginia University, and a Ph.D. in mineral engineering from West Virginia University.
Gonzalo Torres Macchiavello, President and CEO of North American Operations
Mr. Torres Macchiavello has over 20 years of experience in the energy and construction business. He has held senior positions with NRG Energy, AES Corporation, Pennsylvania Power & Light, Vattenfall Sweden, SARCOAL Energy, and EMSA Construction Company in Brazil. He also has served as a board member of different energy companies. Mr. Torres Macchiavello's education includes degrees in business administration and public administration from the University of Brasilia (UnB) in Brazil, and an MBA from the Getulio Vargas University in Sao Paulo, Brazil.
Gary Wilson, General Manager of Canadian Operations
Mr. Wilson has over 35 years of experience in the energy industry. Mr. Wilson has held senior positions in operations and executive management roles within B.C. Hydro, Canada. Mr. Wilson's education includes a degree in accounting and finance.
Andrew Lee, Manager, Corporate Communications
Mr. Lee has over 15 years of experience in the communication field in various segments of the world from North America throughout Asia. Andrew is a main point of contact for West Hawk shareholders throughout the world. He completed his undergraduate degree from the University of British Columbia.
Chuck Rogers, Field Manager, Colorado Gas Project
Mr. Rogers has over 10 years of experience in natural gas drilling and completion activities. Mr. Rogers has worked for Schlumberger and several other oil field service companies. He served in the United States Military, and has a degree from Central Texas College.
Aaron J. Goss, Assistant to North American President
Mr. Goss has over 7 years of experience. Aaron has worked at the Figure Four site, and has provided support on the Company's coal gasification projects. He is currently completing his education.
Dr. Wm. Mark Hart, President and CEO, West Hawk Development
Dr. Hart has over 34 years of experience in the mining and energy business. He has held senior positions with Newmont Mining, NRG Energy, Cyprus Amax Minerals, AEP - American Electric Power, and CONSOL Energy. He also worked as an electrician and repairman for 7 years. Dr. Hart's education includes a PhD in mining engineering from the Colorado School of Mines, MS in Engineering in Mines from West Virginia University and an MBA. He has undergraduate degrees in Mechanical Engineering Technology and Mining Engineering Technology, and an AS in Electrical Engineering Technology from Fairmont State University.
Richard F. Braun, Director
Mr. Braun is an independent director, and has over 40 years of experience in the oil and gas, and chemical process industries. He has held mid-level and executive positions with FMC Corporation, International Energy Funds GmbH, and Fuel Resources Development Corporation. Mr. Braun's education includes graduate work on an MBA at the University of Oregon and a degree in mechanical engineering from Stanford University.
On behalf of the Board of Directors,
"Dr. Wm. Mark Hart"
Dr. Wm. Mark Hart
President and Chief Executive Officer