Nighthawk Energy Regulatory News (HAWK)

7 Jun 2007 15:31

Nighthawk Energy plc07 June 2007 NIGHTHAWK ENERGY PLC ACQUISITIONS AND PLACING RAISING £5.25 MILLION The directors of Nighthawk Energy plc ("Nighthawk" or "the Company") (AIM:HAWK), are pleased to announce the acquisition of a 50 per cent. workinginterest in both the Centurion Project in Sumner County, Kansas ("Centurion")and the Jolly Ranch Project, Lincoln County, Colorado ("Jolly Ranch"). Nighthawk, in conjunction with its partner, Running Foxes Petroleum Inc. ("Running Foxes"), have reviewed a number of projects during the second quarterof 2007 with a view to increasing the asset base of the Company. The criteriaapplied to potential acquisitions are that the project should have a greaterthan 50 per cent. probability of commercial production and the expectation ofproduction or commencement of development within one year. Both Centurion andJolly Ranch meet these acquisition criteria. In addition, the Directorsanticipate that Nighthawk will acquire an interest in a further project beforethe end of June 2007. In order to provide funding for the acquisition and development of the interestsin the new projects, the Company has completed a conditional placing (the "Placing") of 12,500,000 new ordinary shares at 42p per share through HansonWesthouse Limited raising £5.25 million (before expenses). The Centurion Project, Sumner County, Kansas Nighthawk has agreed to purchase a 50 per cent. working interest in theCenturion Project for a consideration of US$300,000. Running Foxes has alsoagreed to purchase a 50 per cent. working interest in the project and will bethe operator. The Centurion project covers an area of 12,000 acres in Sumner County, Kansas,within the Sedgwick Basin. The area, east of Wichita, is a prolific oilproducer and, with the advent of 3-D seismic, a number of operating companieshave found new oil fields that were not discovered using previous explorationmethods. The Centurion project targets eight conventional oil zones, including theArbuckle, Simpson, Viola, Mississippian and Cherokee reservoirs at depths ofless than 4,500 feet. In addition there is the potential for the production ofshale gas from the Chattanooga and Simpson horizons. The Devonian Chattanooga shale is the main petroleum source rock in most ofeastern and central Kansas and has provided all of the conventional hydrocarbonsin the area, producing over 140 million barrels of oil and 40 billion cubic feetof gas from conventional reservoirs. Based on log analysis, Running Foxes estimates that the gas in place in theChattanooga shale interval is between 8 and 12 billion cubic feet per 640 acres. This shale can also be oil productive. An Arbuckle well will be drilled in the third quarter of 2007 enabling coring ofthe Chattanooga shales to evaluate the potential volumes of hydrocarbons inplace. Following the acquisition of this data, the well will be completedeither as a producer or as a necessary salt water disposal well. Two furtherwells are planned to be drilled on the flank of the adjacent producing Rome oilfield and on the Sauzek oil field, which is on the acreage of the project andwas abandoned due to a high water cut. A number of older fields in the area, such as the Sauzek, were prematurelyabandoned due to high water production. Nighthawk and Running Foxes plan toinstall progressive cavity pumps capable of moving large amounts of fluid. Thistechnology has become a profitable method of recovering oil from high water cutreservoirs. Using this method, handling and lifting costs for the oil areexpected to be reduced significantly. In addition a 3-D seismic programme is planned covering an area of approximatelysix square miles to determine fault and fracture trends and conventionalreservoir objectives. There is good infrastructure in the area with major northeast-southwest oilpipeline with off-take capacity on the project area. From analysis of the available well data from the west side of the SedgwickBasin, Running Foxes has estimated the hydrocarbons in place in the Chattanoogashale intervals. Individual well log analysis has indicated shale intervals ofbetween 21 and 44 feet of pay, between 1.2 and 2.7 billion cubic feet of gas perwell on a 160 acre spacing and between 120,000 and 270,000 barrels of oil perwell on an 80 acre spacing. The Jolly Ranch Project, Lincoln County, Colorado Nighthawk has agreed to purchase a 50 per cent. working interest in the JollyRanch Project for a consideration of US$450,000. Running Foxes has also agreedto purchase a 50 per cent. working interest in the project and will be theoperator. Jolly Ranch currently covers an area of approximately 25,000 acres located inLincoln County, Colorado. The project is in the Denver Basin, from whichproduction is drawn from Carboniferous Pennsylvanian, Permian and Cretaceousreservoirs throughout much of the mid-Continent region of the US. The primarytargets are the Marmaton and Cherokee carbonates and secondary objectives areMorrow, Atoka and Cretaceous sandstones. Based on existing 2-D seismic data at least two structural closures have beenidentified. A test well drilled by a previous operator on the flank of one ofthe structural closures indicated a 20 foot column of free oil in a Cherokeereservoir. This result suggests the presence of a bypassed oil field that willbe tested by a new well during 2007. In addition to this planned well, Running Foxes intends to shoot a 3-D seismicsurvey and drill a further two wells during 2007. The success rate using 3-Dseismic in the area is in excess of 90 per cent. for new field discoveries. Jolly Ranch represents a large future potential resource for Nighthawk and islocated near a strong market for oil and gas and in an area that has excellentservices for the industry. Placing raising £5.25 million The Company has carried out a conditional placing through Hanson WesthouseLimited to raise £5.25 million (before expenses) through the issue of 12,500,000new ordinary shares of 0.25p each at 42p per share. The Placing, which isconditional only on admission of the new shares to trading on AIM ("Admission"),is expected to complete on 11 June 2007 on Admission. 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.net www.nighthawkenergy.net Hanson Westhouse Limited 0113 246 2610Tim Feather tim.feather@hansonwesthouse.comMatthew Johnson matthew.johnson@hansonwesthouse.com Bishopsgate Communications Limited 020 7562 3350Dominic Barretto dominic@bishopsgatecommunications.comFran Read fran@bishopsgatecommunications.com This information is provided by RNS The company news service from the London Stock Exchange