TIDMHAWK
RNS Number : 5096X
Nighthawk Energy plc
20 November 2014
20 November 2014
NIGHTHAWK ENERGY PLC
("Nighthawk" or "the Company")
Production and Drilling Update
Continued Focus On Driving Production Growth
Nighthawk, the US focused oil development and production company
(AIM: HAWK and OTCQX: NHEGY), announces an update on production and
drilling at its 100% controlled and operated Smoky Hill and Jolly
Ranch projects in the Denver-Julesburg Basin, Colorado.
Highlights
-- Average gross oil production from all wells in the calendar
month of October 2014 was 1,886 barrels of oil per day ("bopd") and
is currently in the 2,500-2,600 bopd range.
-- Nighthawk's recently announced focus on capturing behind pipe
production and reserves in completed wells and new drills is
driving substantial new production. The drilling rig has been
temporarily idled at no cost to Nighthawk, in order that the
Company can focus on as many of these behind pipe opportunities as
possible before the year end. The Company currently has three work
over rigs in service pursuing behind pipe projects.
-- The Snowbird 16-15 well was completed in a Pennsylvanian age
formation earlier this month and has been producing at an average
rate of production in excess of 500 bopd.
-- The Salen 14-35 well was also completed in a Pennsylvanian
age formation and has averaged approximately 150 bopd during its
first 30 days of production.
-- The Blackcomb 3-14, a newly drilled well, was completed in
the Mississippian age formation and recently brought into
production at 300 bopd.
-- We are currently performing behind pipe recompletions in
three wells and plan to bring any new production associated with
these projects into service over the coming weeks. Additionally,
Nighthawk will continue with the behind pipe pay campaign through
the rest of 2014 and anticipates to have up to six more wells
recompleted by the year end.
-- 3D seismic analysis has been completed over the Snow King
discovery area and a total of 17 new drilling locations have been
identified. Plans are to drill the Keystone 3-7 and Snow King 9-32
locations prior to the year end.
-- Nighthawk has completed its 3D seismic shoot around the Salen
14-35 location and expects to have its analysis completed by the
year end.
(Nighthawk has an average Net Revenue Interest* of approximately
81.5% in the gross oil production)
Production
The daily average gross production for the month of October 2014
was 1,886 bopd and gross production is currently in the 2,500 -
2,600 bopd range. With new wells coming on line recently and the
on-going behind pipe recompletion program, Nighthawk is expecting
production to continue to grow before the year end.
Drilling/Seismic
The Blackcomb 3-14 well was drilled to 8,300 ft and completed in
a Mississippian age formation before being turned over to
production. The drilling rig has been in an idle state at no cost
to Nighthawk and it is planned to re-activate the drilling
programme in early December 2014.
The Company has completed the new 3D seismic shoot over the Snow
King structure and is in the early stages of permitting a number of
additional drilling locations, bringing the total number of
drilling locations to 17. The Company expects to begin drilling two
of these locations in December 2014, with drilling commencing at
the Keystone 3-7 and Snow King 9-32 wells. Additionally, the
Company has completed its 3D seismic shoot in the Salen area and
expects to have these results analysed by the year end.
Rick McCullough, Chairman of Nighthawk, commented:
"The new behind pipe programme we launched last month has far
exceeded our expectations and may open up the possibility of new
productive zones in many of our completed wells, especially those
in our Arikaree Creek field as well as many of our John Craig
locations. As a result of our early success in the Salen 14-35 and
Snowbird 16-15 wells, we are accelerating our behind pipe
completions and hope to recomplete several more wells before the
year end.
"We have recently instituted a new commodity hedging program and
have hedged a portion of our forward production. The use of
financial derivatives, which is very common in the US energy
markets, will allow us to provide more certainty around our future
drilling programs and cash liquidity. This is an important
achievement and will serve the Company and its shareholders
well.
"Recent declining oil prices are concerning to many US-based
operators such as Nighthawk. However, with our operating margins as
high as 60% to 70%, we can earn a reasonable rate of return on our
drilling capital at realized oil prices as low as $50 per barrel.
While we may decide to slow our drilling somewhat because of these
low prices, we continue to make sufficient returns on capital at
oil prices much, much lower than most operators."
Chuck Wilson, Chief Operating Officer of Nighthawk, who has over
33 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-
Definitions and Glossary
*Net revenue interest (NRI) - Nighthawk's share of oil, gas, and
associated hydrocarbons produced, saved, and marketed, after
satisfaction of all royalties, overriding royalties, or other
similar burdens on or measured by production of oil, gas, and
associated hydrocarbons
Behind pipe - behind pipe opportunities, production or reserves
refers to potentially producible zones that have been penetrated by
a well bore but are separated from the well bore by casing (pipe)
and cement and hence cannot be produced without recompleting the
well in such behind pipe zones. Once completed and proved to be
productive, behind pipe opportunities can increase production, cash
flow and reserves.
Enquiries:
Nighthawk Energy plc
Rick McCullough, Chairman +1 303 407 9600
Richard Swindells, Chief Financial
Officer +44 (0) 20 3582 1350
Westhouse Securities Limited +44 (0) 20 7601 6100
Alastair Stratton
Robert Finlay
Canaccord Genuity +44 (0) 20 7523 8000
Neil Elliot
Tim Redfern
Henry Fitzgerald-O'Connor
FTI Consulting +44 (0) 20 3727 1000
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
DRLBLBMTMBMBTFI
Nighthawk Energy (LSE:HAWK)
Historical Stock Chart
From Jul 2024 to Aug 2024
Nighthawk Energy (LSE:HAWK)
Historical Stock Chart
From Aug 2023 to Aug 2024