TIDMHAWK
RNS Number : 7891G
Nighthawk Energy plc
18 May 2011
NIGHTHAWK ENERGY PLC
("Nighthawk" or "the Company")
Jolly Ranch Q1 2011 Production and Operations Update
Nighthawk, the US focused oil development and production company
(AIM: HAWK and OTCQX: NHEGY) gives its second quarterly production
update covering the quarter ended 31 March 2011 and provides an
update on the ongoing recompletion and completion activity.
Highlights
-- Number of wells now on test production following the
completions/recompletions undertaken since January increased by 5
to 12
-- Production anticipated to be higher in Q2 2011
-- Focus remains on finishing the current series of completions
and recompletions in line with the previously announced
programme
Update on Production
In the Q4 2010 production update we stated that Q1 production
was expected to be broadly in line with the Q4 figures. However, Q1
2011 production totalled 2,062 barrels of oil net to Nighthawk, a
reduction on Q4 due to well decline and worse than average winter
weather which curtailed production operations.
The production figures below are presented net of applicable
Colorado State Taxes and Royalty payments to the landowners. The
figures for the quarter ended 31 December 2010 are presented for
comparison.
Q4 2010 Q1 2011
------------------ -----------------
October 1,021 January 624
---------- ------ --------- ------
November 1,076 February 751
---------- ------ --------- ------
December 989 March 687
---------- ------ --------- ------
Total 3,086 Total 2,062
---------- ------ --------- ------
These figures should not be used to calculate a bopd figure as
the wells, which are predominantly on test, are intermittently
taken offline for routine maintenance, modifications to pumping
equipment, weather related conditions, workovers, recompletions or
completion in new zones. As the number of wells increases, the
effect of individual wells being taken offline will have less
effect on the overall production figures.
As reported on 8 March, the Craig 16-32 was on pump and, after
maintenance, had come back on at a rate of around 85 bopd. The
production from this well continues to vary considerably on a
day-to-day basis and is currently averaging approximately 30 bopd,
with up to 60 bopd on certain days.
Production in Q2 is currently anticipated to be higher as a
number of wells come on stream following the completion and
recompletion exercises.
Drilling Programme
As announced on 8 March, it was expected that the drilling of
four development wells in the core area around the Craig Ranch
field, all focusing on the Pennsylvanian Atoka and Cherokee shales,
and up to a further three wells in the Middle Mist area, to test
the 'J' sands and the Cretaceous-aged Niobrara shale formation,
were to be drilled in Q2. Due to tight rig availability, in
particular extension options being taken up by other operators in
the area, the commencement of this programme has been delayed.
The Company will update the market when the programme is
expected to commence. In the interim, the programme of recompletion
and completion will continue.
Update on Completion Operations
The previously announced completion and recompletion work
continues with the ongoing initial six well programme. This
programme has now been expanded and a number of other wells are now
connected to the water disposal wells and further well sites are
being electrified, enabling more efficient pumping and water
disposal.
Jolly Ranch 2-1
The 2-1 has been added to the current programme and has been
completed in the Cherokee A. Early swab testing of this zone
resulted in 50% oil cut from 40 barrels of fluid recovered in a
12-hour interval. The well has been placed on pump to increase the
fluid recovery rates.
Jolly Ranch 16-1
Electric and water disposal lines have been commissioned at the
16-1, which has been recompleted and production is being comingled
from Cherokee and Atoka formations.
Craig 8-1
As announced on 8 March, the well had been placed on pump and
was producing in a range between 10-30 bopd gross. The well
experienced mechanical problems in early April but has subsequently
been placed back on pump and is currently producing 15-35 bopd.
Williams 10-27
The Williams 10-27 was recently completed in the Atoka. The well
has been placed on pump and is currently seeing an increased oil
cut around 5% as the well continues to flow back fraccing fluid.
The overall fluid level produced is decreasing, but the oil cut is
expected to improve.
Further activities intended to enhance production from the
following wells are now planned and being undertaken.
Well Completion Activity
John Craig 7-2 Upper Atoka - multiple new perforations and
acidisations
Cherokee C - reperforation and acidisation
Cherokee A - new perforation and acidisation
Fort Scott - multiple new perforations and
acidisations
Jolly Ranch 4-13 Atoka - multiple recompletions
Craig 12-33 Lower Atoka - acidise existing perforations
Cherokee A - new perforation and acidisation
Craig 15-34 Cherokee A - new perforation and acidisation
Craig 10-28 Upper Atoka - multiple new perforations and
acidisations
Fort Scott - multiple new perforations and
acidisations
Craig 7-34 Cherokee A - new perforation and acidisation
Potential Morrow - new perforations and acidisations
Jolly Ranch Well Status
The current status of the wells on Jolly Ranch is as follows
Well Current Status
John Craig 7-2 In current completion programme
Craig 4-4 Test production
Craig 4-33 Test production
Craig 6-4 Test production
Craig 6-4 SWD Salt water disposal
Craig 7-34 In current completion programme
Craig 8-1 Test production
Craig 10-28 Test production
Craig 12-28 Test production
Craig 12-33 In current completion programme
Craig 15-32H Test production
Craig 15-34 In current completion programme
Craig 16-32 Test production
Jolly Ranch 2-1 Test production
Jolly Ranch 4-13 In current completion programme
Jolly Ranch 10-1 Salt water disposal
SWD
Jolly Ranch 10-5 Test production
Jolly Ranch 16-1 Test production
Williams 10-27 Test production
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 15
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
James Pope james.pope@matrixgroup.co.uk
--------------------------------- ----------------------------------------
Financial Dynamics 020 7831 3113
Ben Brewerton ben.brewerton@fd.com
Ed Westropp edward.westropp@fd.com
Notes to editors
Nighthawk is a focused oil and gas production and development
business with assets onshore USA.
The Company holds a 50% working interest in a shale oil project
in Colorado called the Jolly Ranch Group project ("Jolly Ranch").
Running Foxes Petroleum Inc. ("Running Foxes"), holds the remaining
working interest and is the operator of the project; comprising the
Jolly Ranch, Middle Mist and Mustang Creek areas, covering
approximately 410,000 gross acres of Lincoln, Elbert and Washington
Counties, Colorado.
Jolly Ranch lies within the southeast flank of the
Denver-Julesburg Basin, a major mid-continent hydrocarbon producing
basin. The source of the produced hydrocarbons is the black organic
shales that are interbedded with siliclastic and carbonate rocks.
The shales at Jolly Ranch are within the oil generation window and
there is reasonable certainty of reservoir and source rock
continuity throughout the project area.
To date, 19 wells of 7,500-8,000 feet have been drilled on a
core 50,000 acre area by Nighthawk and Running Foxes, all of which
have encountered multiple pay horizons.
The current work programme involves various testing and fraccing
procedures on numerous shale target formations to determine the
optimum production plan and also gain a greater understanding of
this non-conventional play. In addition to testing, Nighthawk's
main efforts have been focused on proving up the extent of the
asset to help establish the wider project value.
In January 2011 Schlumberger Data & Consulting Services
("Schlumberger"), completed an independent reservoir simualtion
model of the core Craig Ranch area. The model consisted of detailed
areas of the Craig Ranch project area, totalling approximately
3,200 gross surface acres, and assessed the likely long-term
production behaviour of the Marmaton, Cherokee and Atoka horizons.
The simulation concluded that there were approximately 30,000
barrels of oil in place per acre in the Cherokee and Atoka shale
horizons and the average model area recovery rate was 7.5% on
40-acre spacings with vertical wells. Schlumberger has previously
stated that the regional continuity of the formations is such that
the resources in place are likely to be laterally continuous across
the total acreage.
Gaffney Cline and Associates reported on reserves in April 2011
and whislt stating that there was not enough of a production track
record to fully develop a type curve which could be applied with
good statistical confidence across the wider project area, the 2P
reserves associated with the wells that have each cumulatively
produced 20,000 bbls or more, for the best well to date on a
Estimated Ultimate Recovery basis is 64,000 bbls gross on a 40 acre
drainage basis.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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