TIDMHAWK
RNS Number : 0535P
Nighthawk Energy plc
19 October 2012
NIGHTHAWK ENERGY PLC
("Nighthawk" or "the Company")
Drilling and Production Update
Nighthawk, the US focused shale oil development and production
company (AIM: HAWK and OTCQX: NHEGY), announces an update on
drilling and production at its 100% controlled and operated project
at Jolly Ranch in the Denver-Julesburg Basin, Colorado.
Drilling - Key Points
-- 2012 drilling program to be expanded to five wells
-- Drilling of Steamboat Hansen 8-10, the fourth well in the program, underway
-- The Pike's Peak Williams 4-30, the second well in the
program, did not produce under initial completion techniques and
further completion has been deferred whilst the stimulation
strategy for this well is undergoing re-evaluation
-- Completion of Knoss 6-21, the third well in the program, to commence shortly
Production - Key points
-- John Craig 6-2 well on permanent production from 7 October
2012, and currently being cautiously managed to produce in a
general range of 200 to 250 barrels of oil per day ("bbls/day")
-- Production from John Craig 6-2 has increased average current
gross production levels to approximately 270 bbls/day
-- September gross production, including a three day
contribution from the 6-2, averaged 118 bbls/day
-- Average gross production in Q3 2012 of 76 bbls/day, double
the average of the first half year 2012
Drilling Program Overview
Following the success of the John Craig 6-2 well and the
positive indications from the open hole logs of the Williams 4-30
and Knoss 6-21 wells, the Company has committed to a fifth well in
the 2012 drilling program. Funding for this additional well is now
available following the completion of the settlement announced
earlier this month.
The fifth well, the Whistler 6-22, is located close to, and due
south of the Steamboat Hansen 8-10 location, on the northern
boundary of Lincoln County and over 35 miles north of the current
Jolly Ranch core area. The well will test a similar horst structure
to the Steamboat Hansen 8-10 with primary targets of the Cherokee
and Marmaton formations.
With the potential for drilling success in this northerly area,
Nighthawk has moved to protect its acreage position by successfully
bidding to retain over 6,000 gross acres in the immediate vicinity
of these wells.
Steamboat Hansen 8-10
Drilling of the Steamboat Hansen 8-10, the fourth well in the
drilling program, commenced on 14 October. Drilling has progressed
on schedule and is currently past 6,500 feet. Planned target depth
for the well is 8,500 feet.
Pike's Peak Williams 4-30
The Williams 4-30 well, the second well in the program, is
located on Nighthawk's more southerly acreage, close to the
existing older Jolly and Craig wells. The well was drilled to its
target depth of around 7,900 feet with the open-hole logs showing
good oil indications in the Cherokee and Marmaton formations.
Initial completion was in the Cherokee formations, with stimulation
of the formation utilising mild acidisation under relatively low
pressure that has not stimulated hydrocarbon flows from these
zones. With good potential in this well, a thorough review of the
available data is being carried out to determine the next steps,
and further completion and testing has been temporarily deferred
and the rig has moved to the Knoss 6-21 location. The rig will
return to the 4-30 location at a future date once the revised
stimulation plan is determined.
Knoss 6-21
The Knoss 6-21 well, the third well in the drilling program, was
successfully drilled to its target depth of around 8,400 feet and
the well has been logged and cased. The completion rig is currently
on location and the well is being prepared for initial completion
and testing.
Production
John Craig 6-2
Flow-tests on the John Craig 6-2 well commenced on 19 September
2012 and the well flowed under natural pressure for three
consecutive days. Following the installation of new pumping
equipment and storage facilities the well was brought into
permanent production on 7 October 2012.
As this is the first significantly successful well at Jolly
Ranch, a prudent approach to pumping has been maintained in order
to avoid excess water production and risk of formation damage. The
well is being cautiously managed to produce in a general range of
200 and 250 bbls/day of oil, comfortably within the overall pumping
capacity of the well, and will be subject to adjustment during this
start up phase.
Gross Oil Production 2012
Period Total Production Average Production
(barrels of (bbls/day of
oil) oil)
Q1 2012 3,036 33
----------------- -------------------
Q2 2012 3,789 42
----------------- -------------------
H1 2012 6,825 38
----------------- -------------------
Q3 2012 7,010 76
----------------- -------------------
(Prior to 23 January 2012 Nighthawk had 50% Working Interest/40%
Net Revenue Interest)
(From 23 January 2012 to 8 October 2012 Nighthawk had 75%
Working Interest/60% Net Revenue Interest*)
(From 8 October 2012 Nighthawk has 100% Working Interest/80% Net
Revenue Interest)
(* Nighthawk has at all times held a 100% Working Interest/80%
Net Revenue Interest in the John Craig 6-2)
Gross average production of 76 bbls/day in Q3 2012 was boosted
by a three day contribution from initial production from the John
Craig 6-2 well. There was also continued gradual improvement in
production from the older wells, with September gross production
from these wells reaching 73 bbls/day, a 20% increase on August
levels. Including the 6-2 contribution gross average production in
September was 118 bbls/day, the highest monthly average since
mid-2010.
October gross production will see another substantial step-up,
with total gross production over the past 11 days averaging
approximately 270 bbls/day of oil.
Stephen Gutteridge, Chairman of Nighthawk, commented:
"As we move through the new drilling program we are learning
more about the hydrocarbon bearing formations and how to
effectively complete each hydrocarbon bearing zone. It is already
clear that each well will require a slightly different approach,
with the 6-2 responding instantly to acidisation, whilst the 4-30
has been reluctant so far to flow the identified oil accumulations
in the Cherokee. What has been consistent however, is the
significant prospectivity in all the well logs, and with the
increased financial resources now available to us, we have the
confidence to extend the 2012 drilling program to five wells.
"On production, the successful John Craig 6-2 well has resulted
in a significant step-up in Nighthawk's oil production. With
current attractive oil prices and an 80% net revenue interest,
revenues are now close to covering operating costs and overheads,
with a reasonable expectation of more to come from any further
drilling success. As a result we are able to direct our cash
reserves towards the additional drilling and the planning of new
activity in 2013."
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 020 3582 1350
Stephen Gutteridge, Chairman
Richard Swindells, Chief Financial
Officer
Westhouse Securities Limited 020 7601 6100
Richard Baty / Petre Norton / richard.baty@westhousesecurities.com
Paul Gillam
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
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