Nighthawk Energy plc Operational Update (8177K)
August 28 2012 - 2:01AM
UK Regulatory
TIDMHAWK
RNS Number : 8177K
Nighthawk Energy plc
27 August 2012
NIGHTHAWK ENERGY PLC
("Nighthawk" or "the Company")
Operations Update
New Drilling Underway
Nighthawk, the US focused shale oil development and production
company (AIM: HAWK and OTCQX: NHEGY), announces an update on its
75% owned, operated project at Jolly Ranch in the Denver-Julesburg
Basin, Colorado.
Highlights
-- New drilling program underway
-- Four new wells planned over next two months, all with 100% Nighthawk working interest
-- New leases signed for key acreage
-- Recovery in production continues with Q3 2012 to date 45% up on H1 2012 levels
New Drilling Program
The new drilling program has commenced with the John Craig 6-2
well. The drilling rig arrived on location last week and is
currently drilling ahead at a depth of around 4,000 ft.
This is the first of four wells in the new well program with
each location having been selected as a potential high-impact
opportunity following extensive geo-scientific analysis, and
assessment of the impact on the Company's lease position. All four
wells are planned as simple vertical wells with drilling costs
estimated at US$1 million per well. Drilling time for each well is
anticipated to be 15 days including logging, running casing and
drill stem testing, with the drilling rig expected to be on
location at Jolly Ranch until the end of October.
A smaller work-over rig will be brought in for flow-testing and
completion of the wells, which is likely to include acidisation of
the formations. No hydraulic fracture stimulation is planned. The
completion program is anticipated to commence on the John Craig 6-2
well in mid-September continuing through into November, and the
market will be updated as the program progresses.
Nighthawk has a 100% working interest in these new wells (80%
net revenue interest) as Running Foxes Petroleum, the 25% partner,
has not consented to participation in the wells.
Drilling permits are in place for the first two wells in the
program:-
John Craig 6-2
This well is located approximately 1,000 ft west of the existing
John Craig 7-2 well, and will test a well-defined structure which
has strong similarities to the highly productive Great Plains field
located 4 miles to the south-east. The John Craig 6-2 has a planned
target depth ("PTD") of 8,400 ft with a primary target of the
Cherokee shale formations. There are also a number of secondary
targets which will be evaluated.
Pike's Peak Williams 4-30
The Williams 4-30 well is located 2.5 miles north-west of
existing Nighthawk producing wells and will test the up-thrown side
of a large, seismically defined, basement fault. The well has a PTD
of 8,000 ft and primary targets include the Cherokee shales and
Marmaton formation, with a number of secondary targets.
Lease Management
The Company has now signed new leases with the Jolly family on
attractive terms, securing 4,674 net mineral acres of high priority
land for a further 3 years. A number of existing wells are located
on this acreage and work is now underway to add potential
additional production from three of these wells. 13,761 net mineral
acres, which are not critical to the overall development of Jolly
Ranch, have been released.
Whilst the primary determinant of the new well locations is the
recently completed, detailed geo-science work, the Company has also
assessed the impact of the new wells on the overall Jolly Ranch
lease position. As a result, if successful, the new well program
will secure substantial existing Nighthawk acreage and hold it by
production.
Management of Nighthawk's land and lease position remains a
priority and the Company continues to pursue opportunities to
optimize its portfolio, including discussions with potential new
partners.
Production
Although minor mechanical problems caused some lost time in
July, the recovery in production is continuing. Gross production in
August, up to the 26(th) has averaged 60 bbls/day, with the third
quarter average to that date at 55 bbls/day, 45% higher than the
average in the first half of 2012.
Stephen Gutteridge, Chairman of Nighthawk, commented:
"We have now commenced the second stage of our development plan
since taking operatorship of the Jolly Ranch project, with the
drilling of the first new wells for nearly three years. All four
planned wells have clearly defined, highly promising, structural
targets and we are very comfortable in taking on this program on a
100% basis. Production from existing wells continues to recover and
our active lease management approach is helping us optimize our
cash resources. We are also continuing to work with our US legal
counsel in formally pursuing the ongoing claims against Running
Foxes Petroleum."
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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