TIDMHAWK
RNS Number : 8937W
Nighthawk Energy plc
15 February 2017
15 February 2017
NIGHTHAWK ENERGY PLC
("Nighthawk" or "the Company")
Company Update
Nighthawk, the US focused oil development and production company
(AIM: HAWK and OTCQX: NHEGY), announces an update to operations,
year-end reserves and cash position.
Year-end Reserves Update
The Company has finalized its year-end reserve report and has
received the audited Proved Developed Producing reserve report from
the Company's independent reserve engineering firm, Ryder Scott
Company LP under SPE standards. The reserves were estimated using
current production, anticipated decline curves, actual operating
costs and future NYMEX prices ranging from $56.11 to $58.10
The reserve volumes, in barrels, are presented below:
31-Dec-16 31-Dec-15
Audited
------------------------- ----------
Proved Developed Producing (PDP) 1,101,144 1,405,800
Proved Undeveloped (PUD) 442,063 0
------------------------- ----------
Total Proved Reserves (audited) 1,543,207 1,405,800
Probable Reserves 1,800,00 1,423,015
Possible Reserves 545,000 807,000
Total 3P reserves 3,888,207 3,635,815
========================= ==========
Although the Company did not perform an audit of Probable and
Possible Reserves at 31 December 2016, it is management's opinion
that the reserve amounts shown above accurately reflect the
Probable and Possible reserve values as of 31 December 2016. The
increase in Probable Reserves from 31 December 2015 is primarily
due to improved response estimates and reclassification of reserves
from the Possible Reserves classification due to the commencement
of the water flood pilot project. The methodology used by the
Company to arrive at 31 December 2016 Probable and Possible
reserves is the same methodology as its independent reserve
engineering firm.
The increase from prior year total Proved Reserves is due to
reserves associated with Proved Undeveloped category which were
deemed uneconomic at 2015 year-end pricing. Based upon current
pricing as of 31 December 2016, certain PUDs are now economic and
have therefore been included in the above table. The decrease in
Proved Developed Producing, which is net of 2016 annual production
of 482,119 gross barrels, is due to annual production consistent
with expected normal decline curves.
Operations update
Water flood
As reported on 3 January 2017, the Company has commenced
injection into both of the water flood pilot project injection
wells. It is anticipated that as the injected water fills existing
pore volume, consistent with normal nature of water flood projects,
a measurable response will be seen. The Company expects this
response to be during the second quarter 2017. As such, the
incremental volumes expected from the water flood pilot project
have not been included in the PDP reserves above but remain as
Probable Reserves at the year-end. Once adequate response and
evidence is seen as to the response, the reserves are expected to
begin being reclassified to PDP.
Production
Total production for the month of January 2017 was approximately
43,595 gross (35,544 net) barrels as compared December 2016
production of 35,985 gross (28,885 net) barrels. The increase in
production since December 2016 is due to the successful completion
of a new zone in the Monarch 10-15 well, together with bringing
wells back in production that were suspended during the
installation of the water flood pilot project.
Year-end Cash Balance
As of 31 December 2016, the Company's cash balance was US$5.6
million, of which approximately US$1.2m is committed for
expenditure on the Arikaree Creek water flood pilot project. Total
expenditures for the water flood pilot project are estimated to
total $3.5 million. Based upon current projections, the Company
will have adequate cash reserves to maintain its current normal
operating activities through 2017.
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.
Enquiries:
Nighthawk Energy plc
Rick McCullough, Chairman +1 303 407 9600
Kurtis Hooley, Chief Financial
Officer +44 (0) 20 3582 1350
Stockdale Securities Limited +44 (0) 20 7601 6100
Richard Johnson
David Coaten
Glossary
NYMEX - the New York Mercantile Exchange
Proved Reserves - Proved reserves are reserves that have a 90%
chance of being higher than estimated and a 10% chance of being
lower. Proved reserves include PDP, PDNP and PUD reserve
classifications
PDP - Proved Developed Producing reserves are expected to be
recovered from completion intervals (oil producing zones) that are
open and producing at the time of the estimate
PDNP - Proved developed reserves that can be expected to be
recovered from zones behind casing in existing wells, or from zones
that shut-in for market conditions, pipeline connections or
mechanical reasons and are capable of production, but the timing is
uncertain.
PUD - Reserves that are expected to be recovered from new wells
on undrilled acreage, or from existing wells where a relatively
major expenditure is required for recompletion or opening of new
zones of production.
2P - Proved and Probable Reserves
3P - Proved, Probable and Possible Reserves
Probable Reserves - Probable reserves are reserves that have a
50% chance of being higher than estimated and a 50% chance of being
lower
Possible Reserves - Possible reserves are reserves that have a
10% chance of being greater than estimated and a 90% chance of
being smaller
SPE - The Society of Petroleum Engineers
This information is provided by RNS
The company news service from the London Stock Exchange
END
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