Nighthawk Energy plc Purchase of WI in Smoky Hill & Jolly Ranch (5325K)
July 31 2013 - 2:02AM
UK Regulatory
TIDMHAWK
RNS Number : 5325K
Nighthawk Energy plc
31 July 2013
31 July 2013
NIGHTHAWK ENERGY PLC
("Nighthawk" or "the Company")
Purchase of remaining 25% Working Interest in Smoky Hill and
Jolly Ranch Projects
Nighthawk, the US focused oil development and production company
(AIM: HAWK and OTCQX: NHEGY), announces that its wholly owned
subsidiary, Nighthawk Production LLC, has completed the purchase of
the remaining 25% working interest in its Smoky Hill and Jolly
Ranch projects in Colorado from Running Foxes Petroleum, Inc.
("RFP").
Key Terms of the Deal
-- Acquisition by Nighthawk from RFP of an additional 25%
working interest in all leases in the Smoky Hill and Jolly Ranch
projects in the Denver-Julesberg Basin, Colorado in which Nighthawk
currently owns a 75% working interest and is the operator
-- Total acreage of the leases is approximately 300,000 gross
acres in Lincoln, Washington and Elbert counties, Colorado
-- The purchase price is US$12 million, payable in cash
-- The acquisition has been funded by a short-term bridging
loan, the terms of which were announced on 19 July 2013
-- As a result of the acquisition of the additional 25% working
interest, Nighthawk now owns a 100% working interest in all its
leases and the property, equipment and information associated with
the leases including all producing wells and geological and
drilling data
Background
Prior to January 2012, Nighthawk and RFP were engaged in a 50/50
partnership to develop the properties now known as the Smoky Hill
and Jolly Ranch projects (the "Projects"). RFP was the
operator.
In January 2012 Nighthawk acquired a further 25% working
interest from RFP and assumed the operatorship of the Projects.
On 8 October 2012, under the terms of a settlement agreement
between the two parties (the "Settlement Agreement"), Nighthawk was
granted an option to purchase the remaining 25% working interest
from RFP on pre-agreed terms. On 3 July 2013 Nighthawk exercised
the option at the pre-agreed purchase price of US$12 million and on
19 July 2013 entered into a short term debt facility to enable it
to fund payment of the consideration of US$12 million in cash.
During the period from 8 October 2012 to the completion of the
purchase on 30 July 2013, the Settlement Agreement provided that
all operations would be conducted on the basis of Nighthawk having
a 100% working interest with RFP assuming the position of
non-consenting partner. During that period, Nighthawk has funded
all expenditures on a 100% basis which includes the drilling of six
wells, five of which were on the Arikaree Creek oil field. In the
period immediately prior to the Settlement Agreement, RFP
non-consented to three additional wells Nighthawk drilled on the
Jolly Ranch project.
Nighthawk already receives a minimum of 80% net revenue interest
in oil production from these nine wells which was reported as
running at over 1,400 barrels/day on 12 July 2013. Had the option
over the Projects not been exercised RFP's back-in rights to
acquire an interest in the nine wells under the terms of the Joint
Operating Agreement ("JOA") would have been restored. The primary
impact of the purchase of the remaining 25% on those wells is that
the back-in rights of RFP under the JOA are now no longer valid and
that going forward RFP no longer has any interest, rights nor
obligation in connection to the Projects. Other than 100% ownership
of the working interests Nighthawk will assume no further
liabilities as a result of the transaction.
Stephen Gutteridge, Chairman of Nighthawk said:-
"We are pleased to have finally attained our goal of 100%
ownership and control of the Smoky Hill and Jolly Ranch projects
and we are grateful to our largest shareholders for providing the
financial support to accomplish this. We will now press on with our
plans to increase Arikaree Creek production and to establish the
commerciality and value in the rest of our extensive acreage
position."
- Ends-
Enquiries:
Nighthawk Energy plc
Stephen Gutteridge, Chairman
Richard Swindells, Chief Financial
Officer 020 3582 1350
Westhouse Securities 020 7601 6100
Limited richard.baty@westhousesecurities.com
Richard Baty ian.napier@westhousesecurities.com
Ian Napier
Investec Bank plc 020 7597 4000
Chris Sim chris.sim@investec.co.uk
George Price george.price@investec.co.uk
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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