West Hawk Development Corp.
TSX VENTURE : WHD

West Hawk Development Corp.

September 09, 2009 19:18 ET

West Hawk Reports Results for Year Ended April 30, 2009

DENVER, COLORADO--(Marketwire - Sept. 9, 2009) - West Hawk Development Corp. (TSX VENTURE:WHD) ("West Hawk" or the "Company") has released its audited annual financial results for the year ended April 30, 2009.

Net loss for the year was $32.2 million, or $0.22 per share, resulting in an accumulated deficit of $65.2 million. These compare with a net loss of $4.7 million, or $0.07 per share for the prior year. The net loss includes a non-cash impairment of assets in the amount of $33.9 million. The impairment relates to a write-down of the Figure Four Natural Gas project. As of April 30, 2009, the Company has a working capital deficit of $17.5 million. The Company expects losses to continue through 2010.

Mr. Gonzalo Torres Macchiavello, President and CEO, commented, "Oil and gas prices have fallen sharply during 2008 and 2009. The worldwide financial crisis, the low natural gas prices in the United States and the moderate reduction in the drilling, completion and operational expenses have decreased the Company's expectations regarding an accelerated development pace of the project. These facts together with the shut-down of production at the Figure Four property since December 2008 caused a reduction in the projected forecast performance as disclosed in the independent 2009 NI 51-101 report recently filed. The Company also took into consideration the restricted access to funding due to the current market condition."

"The Company recently announced US$1.8 million DIP financing (Debtor in Possession Financing) as part of its natural gas project reorganization process. The funds will be used primarily to bring the existing 8 wells on line. We also recently announced a $2.5 million equity financing. These funds will be used for the development of the Groundhog project and general working capital. If these transactions complete, we are optimistic in our ability to continue moving the Company in the right direction," Mr. Macchiavello said.

A copy of the audited financial statements and related management's discussion and analysis for the year ended April 30, 2009 may be obtained on SEDAR under the Company's profile at www.sedar.com or by contacting the Company.

On behalf of the Board of Directors,

Gonzalo Torres Macchiavello, President and Chief Executive Officer

About the Company: West Hawk Development Corp. is focused on providing valuable, high-demand energy products from a variety of sources. Assets include the Figure Four natural gas property located in the Piceance Basin, Colorado, being developed under a drilling and development agreement and the Groundhog coal property located in northwest British Columbia.

Cautionary Note: This news release and the documents referred to herein contain forward looking statements. The Company's ability to continue as a going concern is dependent upon, among other matters, the successful completion of the proposed financings and management's ability to obtain further financing in the future to fund operations until the Company achieves profitability and positive cash flow from operating activities. Successful completion of the financings is subject to a number of known and unknown risks and uncertainties beyond the control of the Company. Completion of the equity financing is subject to, among other matters, the ability of the agent to secure purchasers for the offering, receipt of required regulatory approvals and satisfaction of all other conditions precedent to completion of the offering, including completion of satisfactory due diligence by the agent. Successful completion of the debt financing is subject to, among other conditions, approval of the Colorado District Bankruptcy Court and lender satisfaction with its due diligence review. See also "Risks and Uncertainties" included in the Company's management discussion and analysis for the year ended April 30, 2009 filed on the SEDAR website at www.sedar.com. There is no assurance that the Company will successfully complete these transactions or, if these transactions fail, that alternate financing will be available on terms acceptable to the Company or at all. A failure to successfully complete these transactions or obtain alternate financing may result in the inability of the Company to continue as a going concern.

The Company has filed a National Instrument 51-101 Report on its Figure Four property. Resource estimates in this report, unless specially noted, are considered speculative. Any and all other resource or reserve estimates are historical in nature, and should not be relied upon. By their nature, forward looking statements involve risk and uncertainties because they relate to events and depend on factors that will or may occur in the future and in many circumstances are beyond the control of the Company. Actual results may vary depending upon, among other factors, the favorable outcome of the foregoing risks and uncertainties, favorable results from proposed exploration and assessment activities, industry production, commodity demand and pricing, currency exchange rates and general economic factors.

Cautionary note to U.S. investors: The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as "reserves" unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.

The TSX Venture Exchange has not yet reviewed and does not take responsibility for the adequacy or accuracy of the content of this news release.

Contact Information

  • West Hawk Development Corp.
    Gonzalo Torres Macchiavello
    President and Chief Executive Officer
    1-303-524-1245
    1-303-524-1285 (FAX)
    www.westhawkdevelopment.com