TIDMHAWK
RNS Number : 9233Z
Nighthawk Energy plc
24 January 2011
Monday 24 January 2011
NIGHTHAWK ENERGY PLC
("Nighthawk" or "the Company")
Jolly Ranch Reservoir Simulation Study
Study results in significant increase in model area oil in place
estimates
Nighthawk, the US focused oil development and production company
(AIM: HAWK and OTCQX: NHEGY), announces the completion of the
Schlumberger Data and Consulting Services ("SDCS") Eclipsea
reservoir simulation study and commencement by Gaffney, Cline and
Associates (Houston) ("GCA") of the first reserves and contingent
resources study on the Jolly Ranch Area.
Highlights
-- Completion of Eclipsea reservoir simulation model
-- Oil in place per acre in the target Cherokee and Atoka shale
formations within the simulation study area approximately 14 times
higher than previous oil in place estimates
-- Gaffney Cline and Associates commencing Reserves and
Contingent Resource Report
Simulation Study
The completed reservoir simulation model was constructed to
generate the likely long-term production behaviour of the Marmaton,
Cherokee and Atoka horizons. For ease of modelling the three
horizons of interest were split into seven fluids in-place
sub-zones, as indicated in the table below. The Shale model
sub-zone in the table refers to the more shale-prone areas of the
mid-Cherokee horizon, whereas the Tebo and Cherokee model sub-zones
refer to the more interbedded carbonate and dolomite dominated
zones within the Cherokee shale package.
The model consisted of detailed areas of the Craig Ranch and
Jolly Ranch project areas, totalling approximately 3,200 gross
surface acres. The model comprised 1.9 million cells forming a
simulation grid with current rock and fluid properties, well
completion and pressure data.
Simulation Study Conclusions
Part of the scope of work was to reassess the Original Oil In
Place ("OOIP") within the Cherokee and Atoka shale horizons, as
well as the conventional Marmaton horizon within the study area. In
addition, the water saturation levels within these zones, as
tabulated below, were determined.
A recovery rate was assessed on the basis of a number of
prediction scenarios with various well and economic parameters and
cut offs. The recovery rate, as predicted by the simulation runs,
is presented for each of the horizons below for the modelled area
and is based on vertical wells on 40-acre well spacing.
Recovery
OOIP Water:Oil Rate (% of
Interval (Barrel per Acre) (BBL) OOIP)
Marmaton 2,344 17.4:1 0%
Marmaton B 2,969 4.7:1 0%
Cherokee 5,625 1.7:1 4.9%
Shale 3,281 4.5:1 2.6%
Tebo 5,313 7.4:1 17.3%
Upper/Lower
Atoka 7,656 8.0:1 10.1%
Lower Atoka
/Morrow 7,969 5.5:1 7.4%
Average
Model
Area 7.5%
Within the model the Marmaton conventional horizons are shown to
have a zero recovery rate. This is driven by the water and oil
production cut offs set in the model to reduce the length of time
to converge each analysis.
The Jolly 10-5 well continues to produce around 7 bopd from the
Marmaton in association with a large volume of formation water. The
Marmaton is oil bearing as demonstrated in the table, but remains
very much a secondary target to the shales.
Comparison with 2009 Original Oil in Place Report
The OOIP utilised in the simulation is an update figure on the
work undertaken by Schlumberger in July 2009. Whilst the 2009 study
had a wide area of focus of approximately 246,000 gross acres and
attributed approximately 1.4 billion barrels of gross oil in place,
the recent work has focused on a more detailed zone of
approximately 3,200 gross acres around the Jolly Ranch and Craig
Ranch areas where almost all of the drilling and production
activity is concentrated.
However, as previously reported, there is good confidence in the
continuity and uniform nature of the shale horizons across the
wider project area and therefore there is confidence that the
overall OOIP will have risen too.
Interval OOIP (Barrels per Acre)
July 2009 January 2011
Total Cherokee (including
Shale and Tebo) 638 14,219
Total Atoka 1,515 15,625
Total Marmaton 3,726 5,313
Total 5,879 35,157
Additional Work Scope
Given the significant increase in oil in place within the
targeted shale horizons, Nighthawk has commissioned Schlumberger to
undertake further field development scenarios. This will include
variable well spacing as well as design and analysis of an optimal
fraccing method for possible implementation in the field.
Reserves and Resources Study
The Eclipse model has been passed to GCA to undertake the
reserves study the conclusions of which will be announced when
completed.
Tim Heeley, CEO of Nighthawk, commented:
"Whilst we are still in the early stages of developing the Jolly
Ranch project, it is encouraging to see a significant increase in
oil in place within the objective shale horizons.
"The simulation study further underlines the potential of Jolly
Ranch; however, operational work remains to be undertaken in order
to demonstrate that oil can be economically and consistently
recovered from the field.
"The outcome of this study reinforces the conclusions of the
recent Strategic Review and we look forward to updating the market
on the Gaffney Cline study in due course."
Tim Heeley B.Eng (Hons) a member of the Society of Petroleum
Engineers, Fellow of the Geological Society of London and a
Chartered Energy Engineer, who is CEO of Nighthawk and has over 14
years of experience in the hydrocarbons industry, has approved the
technical information contained in this announcement.
Enquiries:
Nighthawk Energy plc 020 3405 1982
Tim Heeley, Chief Executive +1 720 344 5154
Mike Thomsen, Executive Chairman
--------------------------------- ----------------------------------------
Westhouse Securities Limited 020 7601 6100
Tim Feather tim.feather@westhousesecurities.com
Matthew Johnson matthew.johnson@westhousesecurities.com
--------------------------------- ----------------------------------------
Matrix Corporate Capital LLP 020 3206 7000
Louis Castro louis.castro@matrixgroup.co.uk
James Pope james.pope@matrixgroup.co.uk
--------------------------------- ----------------------------------------
Financial Dynamics 020 7831 3113
Ben Brewerton ben.brewerton@fd.com
Ed Westropp edward.westropp@fd.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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