Nighthawk Energy Regulatory News (HAWK)

16 Apr 2007 07:01

Nighthawk Energy plc16 April 2007 NIGHTHAWK ENERGY PLC (AIM: HAWK) CISCO SPRINGS DRILLING RESULTS AND LAND ACQUISITION The directors of Nighthawk Energy plc ("Nighthawk"), the US focused hydrocarbonproduction and development company, are pleased to announce an update ondrilling, operations and land acquisition at the Cisco Springs project, locatedin Grand County, Utah, in which Nighthawk holds a 37.5 per cent. workinginterest. Nighthawk and its partner, Running Foxes Petroleum Inc. ("Running Foxes"), areundertaking a major drilling and development programme at Cisco Springs withover 60 wells planned over the next two years out of a total of over 390 wellsites on the current acreage. Drilling results Six wells, CP1-5A, Cisco Springs 24-3B, Powelson 1A, Cisco 30-2, Cisco Beta29-2-3 and Cisco Beta 29-7-1 have recently been drilled. All these wellsencountered commercial quantities of hydrocarbons, flow tested while drillingand have subsequently been completed or will be completed as production wells. The current discovery rate is 90 per cent. in respect of new wells drilled inthe current programme and the results from the six latest wells continue toconfirm the existence of further additional commercial hydrocarbons in multiplepay zones at relatively shallow depths. In respect of these recent results thedirectors are highly encouraged and note the fact that in the shallow sandscurrently being drilled the gas expansion factor is approximately 16 scf/rcf,however this figure rises to 147 scf/rcf in the deeper sands at 3,500 feet. 45per cent. of Nighthawk's developable acreage overlies these deeper horizons,where there is both more gas in place per unit volume and higher formationpressures, each of which will enhance both flow rates and overall recovery. Therecovery factor for natural gas from the shallower wells is expected to be 85per cent. In addition, the discovery of significant oil zones, particularly in wellCP1-5A, further adds to Nighthawk's hydrocarbon inventory in an area which wasconsidered to be primarily prone to natural gas. Pumpjacks and other ancillaryequipment have been purchased with a view to completing these oil zones asproducers in due course. The wells targeted known producing horizons, the Lower Cretaceous Dakota andCedar Mountain reservoirs and the Upper Jurassic Morrison Brushy Basin, SaltWash and Entrada sections at depths ranging from 350 to 2,000 feet. These wellshave been evaluated for conventional gas (on a 40 acre spacing) and oil (on a 10acre spacing) potential. The wireline log interpretations for each individualwell were conducted by Atoka Laboratories, using Bowler JLog petrophysicalanalysis software. Results, showing, formation, depth intervals, estimatedhydrocarbons in place and total net pay thickness are set out below: Well Formation Depth interval Hydrocarbons in place Net pay (feet) (MM= million) (feet) (bbl = barrel) CP1-5A Dakota 846-859 76.0 MMscf gas 13.0 and 80,890 bbls oil Cedar Mountain 918-930 48.0 MMscf gas 11.0 and 69,140 bbls oil Brushy Basin 1,030-1,300 117.0 MMscf gas 26.0 and 160,790 bbls oil Salt Wash 1,300-1,340 184.0 MMscf gas 32.5 1,340-1,450 and 1,510-1,550 198,855 bbls oil Cisco Springs Cedar Mountain 1,002-1,019 142.3 MMscf gas 13.0 24-3B 1,054-1,150 Powelson 1A Brushy Basin 1,164-1,205 11.8 MMscf gas 1.5 Salt Wash 1,227-1,356 194.0 MMscf gas 18.0 Cisco 30-2 Cedar Mountain 696-766 177.8 MMscf gas 39.0 Salt Wash 1,109-1,288 347.6 MMscf gas 53.5 Cisco Beta Dakota 390-430 1.7 MMscf gas 1.5 29-2-3 Cedar Mountain 487-522 10.4 MMscf gas 7.0 Brushy Basin 634-650 20.9 MMscf gas 11.5 Salt Wash (Upper) 874-893 7.8 MMscf gas 3.5 Salt Wash (Lower) 968-990 10.6 MMscf gas 5.5 and 12,305 bbls oil Cisco Beta Cedar Mountain 438-488 40.7 MMscf gas 32.5 29-7-1 Brushy Basin 582-612 16.0 MMscf gas 9.0 Entrada 1,176-1,245 62.2 MMscf gas 23.5 and 79,744 bbls oil Land acquisition Nighthawk and Running Foxes have purchased, via a private transaction, a further640 acres of land in Township 20 South Range 24 East. The acquisition bringsthe total acreage held at Cisco Springs to in excess of 17,000 acres. The newlyacquired acreage contains a producing oil well, the Broadhead 1. Four offsetwells to Broadhead 1 are planned to be drilled in the near future. In addition30 new well permit applications have been submitted to the Federal Bureau ofLand Management (the "BLM"). Negotiations continue with private leaseholders for the acquisition of furtherland and a substantial amount of new Federal leases will be bid for in the BLMland auction due to be held in Utah during the Summer of 2007. David Bramhill, Managing Director of Nighthawk, said: "I am pleased to be able to report continuing positive drill results at CiscoSprings. 16 wells have now been drilled or re-entered since Nighthawk purchasedan interest in the project, 15 of which have found commercial quantities ofhydrocarbons. The strong likelihood of further success coupled with therelatively low cost of drilling means that the economics of the project areextremely attractive with the potential to generate substantial cash flow forNighthawk in the future." 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.comMatthew Johnson matthew.johnson@hansonwesthouse.com Bishopsgate Communications Limited 020 7562 3350Dominic Barretto dominic@bishopsgatecommunications.comFran Read fran@bishopsgatecommunications.com Notes for Editors Nighthawk is a hydrocarbon production and development company focused onbuilding a portfolio of assets in the US. Nighthawk floated on AIM in March2007 having raised a total of £10 million. Nighthawk holds a 37.5 per cent. working interest in the producing Cisco Springsoil and gas project in Grand County, Utah. Running Foxes, a privately ownedDenver-based company, is the operator and majority owner of the project. At the time of Nighthawk's admission to AIM, Oilfield Production ConsultantsLimited ("OPC"), estimated the following reserves, net to Nighthawk, in theCisco Springs project: P90 P50 P10 Gas (BCF) 74.9 94.2 116.2Oil (MMBBLS) 0.3 0.6 1.1 OPC estimated the NPV10 of Nighthawk's interest in Cisco Springs to be US$192.3million (approximately £98.6 million). The Cisco Springs project area presently covers approximately 17,000 acres.There are currently 18 production wells at Cisco Springs, primarily supplyingnatural gas to the Californian market with ancillary oil production soldlocally. A major drilling and development programme is in progress with 390well sites identified on the current acreage. Approximately 60 new wells areplanned in the next two years. In addition, Nighthawk holds an 80 per cent. working interest in the VogelBartlesville waterflood project in Bourbon County, Kansas, within the CherokeeBasin, a prolific shallow oil and gas region producing from CarboniferousPennsylvanian, Mississippian and Ordovician reservoirs at less than 4,000 feet. This information is provided by RNS The company news service from the London Stock Exchange