Nighthawk Energy Regulatory News (HAWK)

17 Jul 2007 07:00

Nighthawk Energy plc17 July 2007 NIGHTHAWK ENERGY PLC CISCO SPRINGS PROJECT UPDATE The directors of Nighthawk Energy plc ("Nighthawk" or the "Company") (AIM:HAWK), the US focused hydrocarbon production and development company, arepleased to announce an update on operations at the Cisco Springs project,located in Grand County, Utah in which Nighthawk holds a 37.5 per cent.interest. Running Foxes Petroleum Inc. ("Running Foxes"), the Denver-basedprivate energy company, is the operator and majority holder of the project. New well drilling programme In late May 2007 Major Drilling America Inc., a Salt Lake City-based drillingcontractor, commenced a ten well drill programme offsetting existing productionwells. This programme is ongoing and has been extended to include a further 14wells, for which drilling permits have been received. The operator, RunningFoxes, is preparing to submit applications to the Bureau of Land Management ("BLM") for permits for a further 30 wells. To date, seven wells all targeting known conventional producing horizons havebeen drilled within the current programme. All the wells encountered commercialquantities of hydrocarbons in multiple pay zones, flow tested while drilling andhave been cased as future production wells. The wells are being evaluated for conventional gas (on a 40 acre spacing) andoil (on a ten acre spacing) potential. Wireline log analysis is being conductedby Atoka Laboratories, using Bowler JLog petrophysical analysis software.Evaluation of three wells, Cisco Beta 30-9-4, 30-8-4 and 29-2-2, has beencompleted and 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 standard (feet) cubic feet) (bbl = barrel) Cisco Beta 30-9-4 Dakota 348-388 42.08 MMscf 34.0 Dakota 397-418 4.52 MMscf 4.5 Cedar Mountain 428-478 43.81 MMscf 31.5 Cedar Mountain 514-536 16.23 MMscf 7.0 Brushy Basin 598-612 6.72 MMscf 4.0 Brushy Basin 789-800 10.54 MMscf 4.5 Salt Wash 830-853 18.98 MMscf 8.5 Entrada 1,178-1,340 218.98 MMscf 62.5 Cisco Beta 29-2-2 Cedar Mountain 472-498 17.17 MMscf 11.0 Brushy Basin 670-709 6.50 MMscf 4.0 Salt Wash 892-920 27.60 MMscf 11.5 Salt Wash 927-967 21.93 MMscf 10.5 Salt Wash 993-1,022 66.73 MMscf 25.0 Cisco Beta 30-8-4 Dakota 440-468 22.39 MMscf 16.0 Dakota 490-506 16.02 MMscf 12.0 Cedar Mountain 506-560 65.71 MMscf 39.5 In addition, Nighthawk and Running Foxes intend to produce from the Mancos shale(Lower Cretaceous), a major unconventional producing reservoir in the Piceanceand Uinta basins which lie to the north and the east of the Cisco Springsproject area. This shale is also the source for hydrocarbons found in theproducing Cedar Mountain and Dakota reservoirs at Cisco Springs. The Mancosshale at the project area lies immediately above the first pay zone and isbetween 650 to 1,800 feet thick. Nighthawk and Running Foxes have evaluated the potential of the Mancos shalewhich potentially covers the entire project area. Running Foxes is currently indiscussions with a number of service companies in respect of optimal completionmethods. The Mancos shale was not evaluated by OPC in respect of the CompetentPerson's Report included within the Company's AIM Admission Document in March2007 and the Directors believe that it offers significant potential upside tothe project. Re-entry programme In addition to the new well drilling programme, a number of wells have beensubjected to re-entry and wireline log analysis. Results to date showingformation, depth intervals, estimated hydrocarbons in place and total net paythickness are set out below: Well Formation Depth interval Hydrocarbons in place Net pay (feet) (MM = million standard (feet) cubic feet) (bbl = barrel) Cisco Federal 1 Cedar Mountain 772-801 14.25 MMscf 3.5 Cedar Mountain 772-801 27,837 bbl 3.5 Cedar Mountain 892-903 10.26 MMscf 3.5 Cedar Mountain 892-903 17,418 bbl 3.5 Brushy Basin 1,126-1,146 9.38 MMscf 2.5 Brushy Basin 1,126-1,146 12,783 bbl 2.5 Salt Wash 1,168-1,198 23.03 MMscf Salt Wash 1,168-1,198 30,033 bbl Salt Wash 1,223-1,247 38.37 MMscf 9.5 Salt Wash 1,223-1,247 48,152 bbl 9.5 Entrada 1,486-1,518 58.40 MMscf 11.0 Entrada 1,486-1,518 60,391 bbl 11.0 Federal 263-1 Dakota 3,599-3,614 24.11 MMscf 2.5 Dakota 3,599-3,614 10,950 bbl 2.5 Cedar Mountain 3,644-3,657 9.54 MMscf Brushy Basin 3,975-3,990 5.54 MMscf 1.0 Brushy Basin 3,975-3,990 2,217 bbl 1.0 Salt Wash 4,010-4,049 185.18 MMscf 19.0 Salt Wash 4,010-4,049 76,147 bbl 19.0 Salt Wash 4,060-4,109 28.41 MMscf 5.0 Salt Wash 4,060-4,109 11,497 bbl 5.0 Salt Wash 4,115-4,286 38.89 MMscf 3.5 Salt Wash 4,115-4,286 15,529 bbl 3.5 Entrada 4,316-4,400 31.10 MMscf 2.0 Cisco Springs B2 Dakota 1,482-1,524 26.51 MMscf 9.0 Dakota 1,482-1,524 26,835 bbl 9.0 Brushy Basin 1,724-1,732 31.51 MMscf 6.0 Brushy Basin 1,771-1,776 16.82 MMscf 4.0 Brushy Basin 1,771-1,776 14,603 bbl 4.0 Salt Wash 2,021-2,040 18.36 MMscf 3.5 Salt Wash 2,021-2,040 14,141 bbl 3.5 Federal Cisco 1 Dakota 1,774-1,811 25.75 MMscf 6.0 Brushy Basin 2,186-2,216 96.08 MMscf 13.5 Jacobs 1 Dakota 1,182-1,195 49.72 MMscf 12.0 Dakota 1,203-1,213 11.35 MMscf 3.5 Dakota 1,203-1,213 14,710 bbl 3.5 Cedar Mountain 1,296-1,318 12.80 MMscf 3.0 Cedar Mountain 1,296-1,318 15,481 bbl 3.0 Broadhead tap and pipeline Construction of the Broadhead tap and pipeline, which is required fortransportation of the planned increased production at Cisco Springs, isprogressing. Northwest Pipeline has completed the tap-in point to the mainpipeline and excavation work under US 1-70 Interstate has been completed andpipeline laid to the tap point. Running Foxes is currently constructing theprocess and compression site and indications are that commissioning willcommence during this quarter. Aeromagnetic and 2-D seismic surveys An aeromagnetic survey flown by Fugro Airborne Surveys has been completed overthe project area comprising 3,400 line kilometres. Initial evaluation of thedata received indicates a number of potential structures and a several horst andgraben blocks have been located. The identification of these features willallow Running Foxes to prioritise structures with higher reservoir potential forearly drilling. The BLM has approved a 2-D seismic survey planned for August 2007. This datawill be integrated with the results from the aeromagnetic survey to give RunningFoxes a greater understanding of the distribution of the reservoirs, minimisecosts and increase production rates. David Bramhill, Managing Director of Nighthawk commented "The drilling resultsdemonstrate excellent progress and further confirm the existence of additionalcommercial hydrocarbons in multiple pay zones at relatively shallow depths. Thecost of each well to completion and casing is in the region of US$140,000 andpayback should be rapid. In addition, I look forward to reporting on progressat both the Devon and Jolly Ranch projects in the near 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.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