Nighthawk Energy Regulatory News (HAWK)

30 August 2017

NIGHTHAWK ENERGY PLC

("Nighthawk" or "the Company")

Amendment of Loan Notes

Nighthawk, the US focused oil development and production company (AIM: HAWK and OTCQX: NHEGY), announces that it has executed amendments to two existing unsecured facility agreements and an existing loan note to defer the payment of cash interest and royalty payments as required by the eighth amendment to the facility agreement between the Company and the Commonwealth Bank of Australia ("CBA"), announced on 3 July 2017.

On 30 June 2017, the Company executed a new amendment to the existing facility agreement with CBA that renewed $21,250,000 million of the principal amount of the financing (inclusive of a required $1,750,000 principal reduction payment). The amended facility agreement required the Company to meet two conditions. Firstly, existing unsecured note holders were required, by 31 August 2017, to agree to defer all cash interest and royalty payments due to them until 31 March 2018, and secondly, to meet minimum production volumes of 425 bbls per day from the 3 producing wells in the Southern water flood pilot project for the month ended 30 September 2017 (together, the "Amended Agreement").

The Company is pleased to announce that it has now satisfied the modification of existing loan note agreements condition.

As outlined below, the arrangements involve Johan Claesson, a Director and the largest shareholder of the Company, and one of his related companies who, among others, are deemed to be members of a Concert Party in relation to the Company, as defined in the Company's circular sent to shareholders on 15 March 2017.

Amendment of Facility Agreements and Unsecured Notes

The Company has amended the terms of certain of its existing unsecured facility agreements and loan notes on which interest will now be deferred until 30 June 2018.

The deferral applies to interest and royalty payments on the following loan notes and facility agreements currently in issue ("Existing Loans"):

- Interest on the £3,800,000 9% convertible unsecured loan notes.

- Interest and royalties pursuant to the Facility Agreement dated 23 July 2013, as amended, between the Company and Fastighetsaktiebolaget Korpralen, a Company controlled by Johan Claesson, a director of the Company.

- Continuing royalty payments of 10% on profit sharing pursuant to the Facility Agreement dated 23 March 2013, as amended, between the Company and Kattrumpan Fastighets AB.

In return for accepting the interest and royalty deferral, the noteholders/lenders will be given the option, exercisable at their discretion but subject to the conditions below, to elect to receive the deferred sums owed to them through either of two routes:

Cash Payment: payment in cash on 1 September 2018 of the deferred sums together with interest on those deferred sums applied at a rate equivalent to 15% per annum.

Share Payment: subject to the approval of a waiver of the obligations of Rule 9 of the UK Takeover Code by independent shareholders and the disapplication of statutory pre-emption rights, payment through the issue of new ordinary shares in the Company of 0.25 pence each ("New Ordinary Shares"), with the deferred sums converted at 0.8 pence per New Ordinary Share. No interest shall be applied to the deferred sums if the Share Payment option is exercised.

If the noteholders/lenders all elect to receive the deferred sums in ordinary shares, at the conversion rate of 0.8 pence per share, this would equate to the issue of approximately 617 million New Ordinary Shares, or c.39% of the issued share capital as enlarged through the new share issue (using a minimum exchange rate of $1 to £1, as specified in the terms of the Existing Loans (the "Minimum Exchange Rate")).

For information purposes only, using the current exchange rate of $1.3 to £1, at the same conversion rate of 0.8 pence per share, this would equate to the issue of approximately 529 million new Ordinary Shares, or c.35% of the issued share capital as enlarged through the new share issue.

The relevant members of the Company's Concert Party have agreed to the above amendments to Existing Loans held by them. Election by them for the payment of the deferred interest and royalty to be satisfied via the Share Payment will require a waiver of the obligations under Rule 9 of the Takeover Code (the "Waiver"). The election of the Share Payment option would increase the Concert Party's interest, and Mr Claesson's interest individually, in the equity capital of the Company from less than 30% to more than 30% (but under 50%) (using the Minimum Exchange Rate), assuming that no other ordinary Nighthawk shares are issued until the exercise of the Share Payment option.

If the Waiver is not approved by the independent shareholders then the Share Payment option will not continue to exist, and the Company will be required to make an aggregate cash payment of approximately £5.6 million (using the Minimum Exchange Rate) to the holders of the Existing Loans. This figure includes the approximately £2.6 million of deferred interest and royalties due to noteholders/lenders as set out in the Company's circular sent to shareholders on 15 March 2017. In the Board's opinion, the Company has limited working capital resources and, should the Company be required to make the Cash Payment, this could have a significant negative effect on its available cash and working capital potentially including jeopardising the ability of the Company to continue trading.

The Company and its advisors are preparing a Circular and related resolutions for consideration by its independent shareholders in order to obtain the Waiver and expect to be posting the Circular, scheduling a General Meeting, shortly.

Related Party Transactions

The amendment of the terms of the Existing Loans by Johan Claesson, and related companies, is considered a related party transaction for the purposes of Rule 13 of the AIM Rules for Companies. The independent directors, being the Directors other than Johan Claesson, having consulted with the Company's nominated adviser, Stockdale Securities Limited, consider that the terms of the transaction as fair and reasonable insofar as the Company's shareholders are concerned.

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