Reserves at Nighthawk's Colorado project disappoint

Shares in US-focused oil group Nighthawk Energy took a dive on Thursday after it revealed low initial reserve numbers at its 50%-owned Jolly Ranch Project in eastern Colorado, US.The group said that proved reserves have only been attributed for two wells from the Cherokee formation (Craig 4-4 and Craig 16-32), as proved reserves have been limited to wells that are projected to recover 20,000 barrels or more.While the total estimated ultimate recovery from these two wells (including cumulative production and proved reserves) stood at 61 million barrels as at 19 March, proved reserves at that date were 24 million barrels."Although as expected these initial reserve numbers are low this merely reflects the fact we are in the early days of developing the Jolly Ranch shale project," said Nighthawk chief executive officer Tim Heeley.The firm said that the well portfolio needs to be expanded to establish contingent resources numbers and provide a true reflection of the project's value."The...report underlines the potential value and highlights the additional work required in order to determine the optimal commercial completion and stimulation techniques for the project's Cherokee and Atoka shale acreage," Heeley said.---bc