Operations Update (0122A)
March 26 2012 - 2:01AM
UK Regulatory
TIDMHAWK
RNS Number : 0122A
Nighthawk Energy plc
26 March 2012
NIGHTHAWK ENERGY PLC
("Nighthawk" or "the Company")
Operations Update
Nighthawk, the US focused shale oil development and production
company (AIM: HAWK and OTCQX: NHEGY), announces an update on its
operated project at Jolly Ranch in the Denver-Julesburg Basin,
Colorado.
Highlights
-- 2012 work-over program on schedule
-- Preparation and data gathering complete on seven wells
-- Recompletion stage now underway
-- Increased leasing and drilling activity in Jolly Ranch
area
Summary
Nighthawk's 2012 Jolly Ranch work-over program is well underway.
The first work-over rig arrived on location ahead of schedule in
mid-February and, despite challenging weather conditions, has now
successfully completed a number of operations on seven wells. The
second work-over rig will be on location shortly.
The initial steps in the work-over program broadly comprise
three activities - preparation and remediation work prior to
re-completion; data-gathering; and recompletion into
production.
Preparation and Remediation Work
During 2011, prior to Nighthawk becoming operator, investment in
Jolly Ranch had been very limited. As a result Nighthawk
anticipated that substantial work would be required to restore
wells to the point where recompletion and production was a
realistic option. After re-entry of seven wells the Company now
anticipates that additional down-hole work will be required above
original estimates, and consequently the Company has budgeted for
an additional net spend of US$300,000 to US$600,000, which is fully
funded.
The primary areas requiring additional spend are:
-- Significant sand-fill in wells
-- Casing and tubing damage
-- Re-balancing and repair of pump units
In addition, Nighthawk is undertaking substantial overhaul of
topside facilities including cleaning of tanks, improvement of
well-pads; better environmental protection; and improved
infrastructure.
Data-gathering
The planned data-gathering process has proved very successful
with check-shot data obtained from three wells and additional
logging data from the out-lying Williams 10-27 well. In addition,
the Company has acquired additional digital well data from the
surrounding area and has commissioned independent geological
analysis to help inform future drilling decisions and evaluate the
extent of the various shale oil plays, including Cherokee and
Niobrara, across the Jolly Ranch acreage.
Recompletion and Production
On assuming operatorship on 23 January 2012, there was only one
producing well, the Craig 16-32, which was pumping at approximately
30 bbls/day (gross). This well was briefly taken off-line for
clean-up work but is now back in production at a steady 30
bbls/day.
Over the past week recompletion work to bring three additional
wells into production has been underway and an update on production
will be released in April 2012.
Next Steps
With the arrival of the second work-over rig, work on the other
eight wells in the program will accelerate through the stages of
remedial work, data-gathering and recompletion where appropriate.
Nighthawk does not anticipate that all these wells will come into
production, but does expect to see a significant uplift in
production from the current single-well output of 30 bbls/day
(gross).
Surrounding Activity
The 410,000 acres of Jolly Ranch remain in the centre of an
increasing level of leasing and drilling activity by larger players
in the US shale oil market. Over the past month, announcements from
Conoco, South Western Energy, Ultra Energy and other independents
have confirmed interest in the immediate neighbourhood around Jolly
Ranch.
Stephen Gutteridge, Chairman of Nighthawk, commented:
"Taking on the operatorship of a project that had seen little
investment over the past year was always going to be challenging,
but I am delighted that the Nighthawk Denver team have moved
quickly to sort out problems, accumulate additional data, and get
to well recompletion earlier than expected. Operational success is
the criteria by which we expect to be measured and we will now be
updating regularly on our progress."
Chuck Wilson, Chief Operating Officer of Nighthawk, who has over
32 years of experience in the oil and gas industry and meets the
criteria of qualified persons under the AIM guidance note for
mining and oil and gas companies, has reviewed and approved the
technical information contained in this announcement.
- Ends -
Enquiries:
Nighthawk Energy plc
Stephen Gutteridge, Chairman
Richard Swindells, Chief Financial
Officer 020 3582 1350
Westhouse Securities Limited 020 7601 6100
Tim Feather tim.feather@westhousesecurities.com
Richard Baty richard.baty@westhousesecurities.com
FTI Consulting 020 7831 3113
Ben Brewerton ben.brewerton@fticonsulting.com
Ed Westropp edward.westropp@fticonsulting.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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