JayHawk announced that due to ongoing unfavorable weather conditions in North Dakota, including the recent flooding, there has been no well production for the last 3 months from its Divide County, North Dakota producing property. JayHawk currently has approximately 2,000 barrels of oil in its tanks awaiting delivery. JayHawk is continually monitoring weather conditions for a window of opportunity to come back online and begin production again. Severe weather conditions, including heavy flooding, have been ongoing throughout North Dakota since February, 2011. Due to these harsh weather conditions, the Federal Emergency Management Team (FEMA) declared a Major Disaster on May 10, 2011, for several parts of North Dakota, including Divide County. The National Weather Service in Bismarck, North Dakota issued a hazardous weather outlook for portions of the state, including northwest North Dakota from Thursday, June 23, 2011 through Friday, June 24, 2011, with chances of thunderstorms, strong winds and hail.
Additionally, a report from the Associated Press, dated June 22, 2011, states, "water from the Souris River, which loops down from Canada through north central North Dakota, has been bloated by heavy spring snowmelt and rain on both sides of the border. The resulting deluge is expected to dwarf a historic flood of 1969, when the Souris reached 1,554.5 feet above sea level. The river is expected to hit nearly 1,563 feet this weekend -- eventually topping the historical record of 1,558 feet set in 1881."
JayHawk's focus, over the course of this current fiscal year, is to enhance the production rate of its current wells in the North Dakota basin and also increase its acreage with additional proved producing properties or properties which will allow for additional production and development. The Company's focus remains on its North Dakota properties as management has surmised its best opportunity for increased production remains in the Bakken/Three Forks formations.
Lindsay Gorrill, President of JayHawk Energy, stated, "The unusually poor weather conditions have delayed our delivery of production. However, once these conditions clear, we anticipate moving forward with our operations. We expect normal operations and production which will assist in facilitating our operational expenses and provide flexibility to develop additional opportunities within the region. As weather conditions improve, we look forward to also shipping approximately 2,000 BBLs of oil currently in our tanks that are presently inaccessible."
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