Nighthawk Energy Regulatory News (HAWK)

NIGHTHAWK ENERGY PLC

("Nighthawk" or "the Company")

Drilling and Production Update

New Mississippian Oil Discovery at Snow King 13-33 well

Nighthawk, the US focused oil development and production company (AIM: HAWK and OTCQX: NHEGY), announces an update on drilling and production at its 100% controlled and operated Smoky Hill and Jolly Ranch projects in the Denver-Julesburg Basin, Colorado.

Highlights - Snow King 13-33

· New distinct Mississippian oil discovery at Snow King 13-33 exploration well four miles south-west of the Arikaree Creek oil-field

· Snow King 13-33 commenced production on 12 April 2014 from the Mississippian Spergen formation, the same pay-zone as the nearby producing Arikaree Creek oil-field, with an initial production rate of 300-400 barrels per day ("bbls/day")

· Discovery potentially opens up a full scale development program similar to the Arikaree Creek oil- field

Highlights - Other

· Drilling of a Salt Water Disposal ("SWD") well at Arikaree Creek completed

· Average gross oil production in March 2014 of 1,885 bbls/day

· Revised funding arrangements to facilitate further drilling

Snow King 13-33 Well

The Snow King 13-33 exploration well was drilled to a depth of 8,400 feet with a principal target of the Mississippian Spergen formation, which is the highly productive formation in the nearby Arikaree Creek oil-field. The well is located on a distinct structural feature four miles south-west of Arikaree Creek. Nighthawk has an 80% net revenue interest* in the well.

An oil-bearing Mississippian Spergen pay-zone was identified from logs and this zone has been successfully brought into production with an initial production rate in the range of 300-400 bbls/day. The productive zone bears strong similarities to the existing production from the Steamboat Hansen block at Arikaree Creek.

This discovery potentially opens up a new area for development, and planning of the next steps is now underway. This includes permitting of additional wells and laying out of a 3D seismic program to further define the geological setting before initiating a full scale development plan.

Drilling Program

Drilling of a SWD well at Arikaree Creek has been completed. This is an important addition to the Arikaree Creek infra-structure and when completed and fully permitted will reduce the Company's water handling costs by up to US$3 per barrel of produced water.

The drilling schedule for the rig is currently being reviewed in light of the new discovery. The next phase of drilling at Arikaree Creek is now likely to commence in late May 2014 subject to permits being received. Nighthawk has a number of existing permits at locations other than Arikaree Creek and is currently reviewing the case for drilling one or more of these locations following completion of the SWD.

Following further discussions with the Company's farm-out partner in the Limon area, the initial farm-out well, which was planned for April 2014, is now expected to spud in the May/June period and will target both Pennsylvanian and Mississippian formations.

Production

Gross Oil Production Quarter 1 2014

(Nighthawk has an approximate 80% Net Revenue Interest* in the gross oil production)

Average gross oil production in March 2014 was 1,885 bbls/day and was affected by a planned three day shut-in of the Steamboat Hansen 8-10 well for pressure build-up tests, which are routinely carried out on all producing wells to provide valuable data on reservoir performance.

Production in the second half of April will be boosted by production from the Snow King 13-33 well and by increased volumes from the Pennsylvanian formations in the John Craig 1-2 well which, after further work, is now producing over 100 bbls/day. First half April production was impacted by additional pressure build-up tests and a few days of downtime for pump repairs on the Big Sky 5-11 well.

Average gross production in Quarter One of 2014 was 1,748 bbls/day (Quarter One 2013 : 313 bbls/day)

Financing Arrangements

The success of the Snow King 13-33 well has potentially opened up a new area for development, and increases the chances of further structural Mississippian discoveries on Nighthawk acreage. With further development of Arikaree Creek also planned, the Board intends to maintain the current pace of drilling and development subject to financing, and as a first step to securing short-term funds, the Board has agreed revised repayment terms for Nighthawk's existing loan facilities ("the Loans") with Fastighetsaktiebolaget Korpralen ("FK") and Kattrumpan Fastighets AB ("Kattrumpan"), (the "Lenders"). The Lenders are both associated with Johan Claesson, a non-executive director of the Company and the Company's largest shareholder. 

The existing repayment profile for the loans is three repayments of US$3 million payable on or before 30 April 2014; 31 July 2014 and 31 October 2014 to FK and one repayment of US$5 million on or before 31 May 2014 to Kattrumpan.

The revised repayment schedule agreed between the Lenders and the Board is for a deferral of each of the existing repayments to the Lenders for three months. The revised repayment profile for the loans is three repayments of US$3 million payable on or before 31 July 2014; 31 October 2014 and 31 January 2015 to FK and one repayment of US$5 million on or before 31 August 2014 to Kattrumpan.

Nighthawk has agreed that the annual interest rate payable on the loan from FK will increase from 9% to 15% from 1 April 2014. There will be no change in the interest rate payable on the loan from Kattrumpan.

Johan Claesson is a non-executive director and a substantial shareholder of the Company and therefore the revision to the repayment schedule is a related party transaction under the AIM Rules for Companies. The Independent Directors of Nighthawk (being the Board with the exception of Johan Claesson) consider, having consulted with Westhouse Securities Limited, the Company's Nominated Adviser, that the terms of the transaction are fair and reasonable in so far as the Company's shareholders are concerned.

With the success of the Snow King 13-33 well, the Board is reviewing significantly expanded drilling and development plans for 2014. Consequently the Board is currently planning to refinance all existing short-term, non-convertible loans with new longer term borrowing facilities within the next three months.

Stephen Gutteridge, Chairman of Nighthawk, commented:

"The new Snow King 13-33 discovery is a highly significant success for Nighthawk and is a direct result of our approach to exploration, maximizing the use of available geo-scientific data. We now have two distinct conventional Mississippian discoveries, and this success enhances the prospect of additional discoveries across our extensive acreage position. We have already identified a number of similar structures for future drilling."

Chuck Wilson, Chief Operating Officer of Nighthawk, who has over 33 years of experience in the oil and gas industry and meets the criteria of qualified persons under the AIM guidance note for mining and oil and gas companies, has reviewed and approved the technical information contained in this announcement.

- Ends-

Definitions

*Net revenue interest (NRI) - Nighthawk's share of oil, gas, and associated hydrocarbons produced, saved, and marketed, after satisfaction of all royalties, overriding royalties, or other similar burdens on or measured by production of oil, gas, and associated hydrocarbons

Enquiries: