Nighthawk Energy Regulatory News (HAWK)

2 Jul 2007 07:01

Nighthawk Energy plc02 July 2007 Nighthawk Energy plc Acquisition of Interest in the Cliffs Shale Gas Project, Illinois Basin The directors of Nighthawk Energy plc ("Nighthawk" or "the Company") (AIM: HAWK)are pleased to announce the acquisition from Mountain Energy Corporation of an80 per cent. working interest in the Cliffs project located in Clark,Cumberland, Jasper and Crawford Counties, Illinois, covering an area of 15,591acres for a consideration of US$935,500. Running Foxes Petroleum Inc. ("RunningFoxes") holds 20 per cent. of the project and is the operator. The Cliffs project is located within the Illinois Basin, an intra-cratonic basinwhich is a prolific producer of hydrocarbons that has produced in excess of fourbillion barrels of oil from numerous reservoirs at less than 2,900 feet.Production has been derived from conventional reservoirs such as the Devonianand Silurian carbonates and the Rosiclare, Aux Vases, Benoist and St. Genevievesandstones. The original source of over 90 per cent. of this production is theNew Albany Shale at less than 4,000 feet which is in the gas window and is theprimary target of the Cliffs project. The potential gas in place within the New Albany Shale in the whole IllinoisBasin has been estimated by the Devonian Shale Task Group of the NationalPetroleum Council Committee to be approximately 86 trillion cubic feet. Shale gas is seen as a long term energy resource that will help to replaceconventional US hydrocarbon reserves as they are depleted. Shale gas productiontends to be relatively slow, but long lasting. A typical well in the New AlbanyShale will have a 30 year production life. Independent consultants, Bowler Petrophysics, have analysed the logs of severalwells in the area including the Shipmans 19 and the Townsend 1 west of the LaSalle Monocline over which the Cliffs project is located. The results of thisanalysis show gas in place for 640 acres of 9.6 billion cubic feet and 6.8billion cubic feet for each well respectively. Running Foxes has identified a major structural flexure within the projectacreage which is believed from subsurface geology and seismic to enhanceproduction from the naturally fractured New Albany Shale. A test well isplanned to be drilled in the fourth quarter of 2007 to collect gas content dataand a horizontal leg will be initiated in the same borehole to evaluatepotential production rates. An AMI (Area of Mutual Interest) agreement is in place between Nighthawk andRunning Foxes and additional acreage acquisition is planned for the future.There is potential to expand the acreage of the project significantly. David Bramhill, Managing Director of Nighthawk, said: "The Cliffs acquisitionrepresents a low cost and low risk entry into a project with potentiallysignificant gas and oil reserves in a proven hydrocarbon province. Shale gasresources are now becoming very important to North American gas supply inreplacing production from conventional fields. Several large US operatingcompanies, including Hunt Petroleum, Forest Oil, El Paso, Quicksilver and CNXare recent entrants to the area. In addition, the growing demand for ethanolproduction in the Illinois area is seeing a number of new plants being builtincreasing local demand for gas. The increase in demand, higher gas prices,production longevity and the low cost of drilling and development make theCliffs project a valuable addition to our growing production and developmentportfolio." David Racher B.Sc (Hons) Geology, who is a consultant to Nighthawk, has reviewedand approved the technical information contained in this announcement. For further information please contact: Nighthawk Energy plc 01271 882160David Bramhill, Managing Director office@nighthawkenergy.netwww.nighthawkenergy.net Hanson Westhouse Limited 0113 246 2610Tim Feather tim.feather@hansonwesthouse.com Matthew Johnson matthew.johnson@hansonwesthouse.com Bishopsgate Communications Limited 020 7562 3350Dominic Barretto dominic@bishopsgatecommunications.com Fran Read fran@bishopsgatecommunications.com This information is provided by RNS The company news service from the London Stock Exchange