Operations Update (5701E)
June 01 2012 - 2:00AM
UK Regulatory
TIDMHAWK
RNS Number : 5701E
Nighthawk Energy plc
01 June 2012
1 June 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
-- Work-over program on existing wells on schedule to be completed this month
-- Plans for new drilling well-advanced with permitting of 15-25 locations underway
-- Well locations for an initial four new wells selected
-- Overhaul and refurbishment of topside facilities and environmental remediation work continues
Work-Over Program
The down-hole aspects of the 15 well work-over program are
largely complete with outstanding work scheduled for completion
this month. One well has now been plugged and abandoned and whilst
a final decision is still to be made, it is likely that one further
well will require plugging and abandonment.
New Drilling Program
The extensive geo-science work undertaken over the past few
months has identified a number of attractive drilling opportunities
and the Company is seeking permits for 15-25 new well
locations.
The locations for the initial four wells in the drilling program
have been selected as high-impact opportunities and steps to secure
an appropriate drilling rig and associated equipment are at an
advanced stage.
These initial wells will be simple vertical drills to target
depths of around 8,200-8,500 feet. The primary target will be the
Cherokee formation but other zones with potential for oil
production will be evaluated.
Drilling, logging and potential drill stem tests are expected to
take around 15 days per well. Subject to evaluation of the drilling
results, a work-over rig will be brought in for perforation,
acidisation and further flow-testing which will determine the
requirements for production equipment.
The first two wells will be located on the more northerly part
of the Jolly Ranch acreage, and the second two wells, whilst
geologically attractive in their own right, will also help retain
sizeable lease positions. Drilling costs per well are not expected
to exceed US$1 million.
Topside Facilities and Environmental Work
The work required to overhaul and refurbish existing topside
production facilities has continued to absorb greater resources
than envisaged when Nighthawk took over the operatorship of Jolly
Ranch. A number of wells remained shut-in through April and May
2012 whilst pumps, engines, heater/treaters and tanks were repaired
or replaced.
Work is now planned to upgrade electrical systems to required
standards and to address outstanding environmental issues, which
arose from work carried out prior to Nighthawk becoming operator.
Remedial action has commenced in consultation with the Company's US
legal counsel and it is anticipated that resolution of these issues
will not have a material financial impact on the Company.
Production
An update on second quarter production will be released in July
2012. Three wells were on production from mid-May 2012 and
additional wells, with potential Marmaton production, are being
started up this week.
Greater consistency in production levels is expected in June
2012. Early indications from the past two weeks suggest a material
improvement over the first quarter.
Stephen Gutteridge, Chairman of Nighthawk, commented:
"The scale and extent of the work required to provide reliable,
fit-for-purpose production facilities that meet required operating
standards has been unwelcome, has absorbed resources and held back
production. However, I am pleased that we have largely worked
through these problems and are now able to focus on the new wells
to be drilled in the second half of 2012.
"Our extensive geo-science work has identified excellent
locations that strongly correlate with known significant producing
wells on nearby acreage and we expect to confirm the drilling
timetable in the coming weeks."
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
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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