West Hawk Development Corp. announces that West Hawk Energy, USA, has finalized and signed a sales and marketing agreement and a transportation agreement with EnCana Oil and Gas (USA) for EnCana to purchase all of the gas produced from the Company’s Figure 4 project. The agreement, which is effective immediately, allows West Hawk Energy, USA, the option to nominate either the Colorado Interstate Gas (CIG) Hub or the Cheyenne Hub as the point of sale. West Hawk will receive the nominated hub price less $0.10 or $0.25 per MCF at the respective hub for Encana to transport and sell the gas. The agreement also allows the Company the option to nominate a portion of the gas for sale to an end user.
John Reeves, Jr., CEO, West Hawk Energy, USA, stated “This is a major milestone in the development of the Figure 4 project. To have an off-take agreement with the largest gas company in North America to take all of the gas ensures additional long term security for the project”.
Drilling of the project’s second well is at an 8,230' depth, and is on budget for both cost and drilling time. The project’s first well is undergoing completion at this time, and construction of the third well pad is underway.
As an update on the transaction with the Lu’An Mining Industry Group, who agreed to purchase a 25% interest in the project, the deal is projected to be closed as early as this Friday and at the latest by next Tuesday according to discussions between West Hawk’s Board of Directors and Dr. Chen from Beijing, China yesterday.
