Nighthawk Energy Regulatory News (HAWK)

31 July 2015

NIGHTHAWK ENERGY PLC

("Nighthawk" or "the Company")

Drilling Program

Financing

Nighthawk, the US focused oil development and production company (AIM: HAWK and OTCQX: NHEGY), announces a drilling program and financing update.

Highlights

· Drilling to recommence by early September 2015

· Five conventional Mississippian Spergen wells planned in H2 2015

o One Arikaree Creek low risk development well

o Four Monarch JDA commitment wells with potential to significantly de-risk multiple additional drilling locations

· 2016 drilling to focus on mixture of development, appraisal and exploration locations

· Drilling, completion and facilities capital cost of new wells estimated materially lower at approximately $1.5 million, enhancing economics at current low oil prices

· Issue of $10.0 million underwritten zero coupon unsecured convertible loan note to ensure funding into 2016 for value creation through drilling even at low oil prices

Drilling Plans

Nighthawk is currently planning to recommence drilling in late August or early September with a five well program targeting the conventional Mississippian Spergen formation.

Development wells

The first well in the program is expected to be a development well within the southern part of the Arikaree Creek Field targeting production. This well will be structurally up dip to the Blackcomb 5-14 well, which was completed for production in October 2014 and is currently producing in a range of 325 to 350 bopd.

Nighthawk sees an additional nine low risk development wells within the Arikaree Creek and Broken Spear fields which are offsets to existing Mississippian Spergen producers and currently plans to commence drilling some of these in 2016.

Monarch JDA

The remaining four wells currently planned in 2015 will be exploration wells located within the Monarch JDA and will be testing structures that are analogous to the Arikaree Creek structure. These four wells are part of the 55 to 65 gross (27-33 net to Nighthawk) locations identified from the recent interpretation of 3D seismic over the Monarch JDA. If successful, these wells are expected to lead to a similar development path to that of the Arikaree Creek field with the derisking and upgrading of a number of offset drilling locations, potentially across multiple structures.

The four wells currently planned in 2015 on the Monarch JDA represent four of six commitment wells on the JDA. Following this, Nighthawk will have two further commitment wells on the Monarch JDA required to be drilled by 30 June 2016.

Drilling costs

Since Nighthawk last drilled in January of 2015, the capital cost for drilling and completing a new well and installing surface facilities has significantly reduced. Recent quotations for services and supplies reflects an approximate 30% reduction in the total drill, completion and facilities cost of a new well. In December 2014, Nighthawk's capital commitment for drilling, completing and facilities was around $2.1 million. Today, the estimated capital cost is expected to be around $1.5 million. This is extremely important in an environment where the WTI-NYMEX oil price is currently below $50 per barrel.

At a WTI-NYMEX oil price of $50 per barrel and with lower drill and completion costs, for a typical Mississippian Spergen well at 100% working interest and 82% net revenue interest, Nighthawk believes it can realize an internal rate of return in excess of 100% and create a net present value of greater than $2.8 million per well. Nighthawk believes that this demonstrates the potential strength of the Company's low cost conventional drilling inventory, particularly more so in a continued low oil price environment, where many unconventional producers will struggle to create value through drilling.

Financing Arrangements

In order to ensure that the Company is well funded to recommence drilling its low cost, economic drilling inventory in 2015 and to drill into 2016 and to continue to create value for all shareholders, Nighthawk has today entered into a £6.4 million (approximately US$10.0 million) zero coupon unsecured convertible loan note ("Convertible Loan Notes") subscription underwriting agreement with Mr Johan Claesson, a director of the Company and the Company's major shareholder. The Board has examined alternative financing solutions including additional debt facilities but, in light of current commodity price market conditions, concluded that a solution such as a zero coupon convertible was more appropriate.

The terms of the subscription underwriting agreement are that Mr Claesson has subscribed for £1.8 million of the Convertible Loan Notes and has underwritten an additional amount of up to £4.6 million of the Convertible Loan Notes ("Underwritten Amount"), which may be offered for subscription to other existing investors in Nighthawk by no later than 14 August 2015. To the extent that other subscribers have not been procured for the Underwritten Amount by 14 August 2015, Mr Claesson will subscribe the balance of the Underwritten Amount not taken up, up to a total of £4.6 million. Accordingly, Mr Claesson may hold up to a maximum of £6.4 million of the Convertible Loan Notes. Mr Claesson will receive a cash fee of US$290,000 in consideration of underwriting the Underwritten Amount.

The principal terms of the convertible loan note are:

· Zero coupon

· Unsecured

· Convertible at the option of the holder at a price of 3.0 pence per ordinary share, a discount of 15% to the closing mid-market price of 3.525 pence on 30 July 2015, at any time before 25 March 2019, subject to limited restrictions including a prohibition on conversion where to do so would breach Rule 9 of the City Code on Takeovers and Mergers

The subscription for convertible loan notes by Mr Claesson is a related party transaction for the purposes of Rule 13 of the AIM Rules for Companies. Accordingly, the directors of Nighthawk, other than Mr Claesson, consider, having consulted with the Company's Nominated Adviser, Westhouse Securities Limited, that the terms of the transaction are fair and reasonable in so far as the Company's shareholders are concerned.

Rick McCullough, Chairman of Nighthawk, commented:

"We are very pleased with this capital raise and the continued support we receive from our major shareholder, Johan Claesson. This funding will provide us the necessary capital, along with our existing cash flows and reserves based bank loan to drill five wells in 2015 and probably twice that many in 2016. While we have an extensive inventory of possible Spergen drilling locations and these wells can still generate in this price environment extremely attractive IRRs and NPVs in the $2.8 million range when we achieve type curve results, we believe it is prudent to drill at a moderate pace in this price environment.

"We recently announced our success with maintaining our production during the first half of the year and we expect this new drilling will put us back on a growth ramp, better demonstrate the efficacy of our well location inventory and position the Company to take advantage of higher oil prices in 2016 and beyond.

"The Board believes that there exists a material gap between the potential intrinsic value of the Company's assets and the Company's market valuation and remains focused on taking all possible actions to close this gap and demonstrate this value for the benefit of all shareholders."

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.

Enquiries:

Definitions and Glossary