Nighthawk Energy Regulatory News (HAWK)

12 Mar 2007 07:01

Nighthawk Energy plc12 March 2007 Nighthawk Energy plc First Day of Dealings on AIM The Directors of Nighthawk Energy plc ("Nighthawk" or the "Company") (AIM:HAWK), the hydrocarbon production and development company focused on building aportfolio of assets in the US, is pleased to announce that its shares commencetrading on AIM today. HIGHLIGHTS: • Nighthawk is a hydrocarbon production and development company, currently focused on the development of the Cisco Springs gas project in Utah, in which it holds a 37.5 per cent. working interest; • OPC estimates the NPV10 of the Group's interest in Cisco Springs to be US$192.3 million (approximately £98.6 million); • There are currently 18 production wells at Cisco Springs, primarily supplying natural gas to the Californian market, with approximately 60 wells planned in the next two years; • At Cisco Springs, Nighthawk has a 37.5 per cent. interest in an Ingersoll-Rand drilling rig and a workover rig allowing flexibility and control over the drilling programme; and • Nighthawk is operating in a country with low political risk with a government which is supportive of domestic oil and gas production. Nighthawk has raised £10 million (before expenses) through a placing of40,000,000 shares at 25p per share. At the Placing Price, Nighthawk will have amarket capitalisation of £37.96 million. The Nominated Adviser and Broker to the Company is Hanson Westhouse Limited. Capitalised terms in this announcement have the same meaning as defined in theAIM admission document of the Company dated 6 March 2007. PLACING STATISTICS: Placing Price 25pNumber of Placing Shares being issued 40,000,000Number of Ordinary Shares in issue following the Placing 151,823,126Percentage of the Enlarged Share Capital subject to the Placing 26.35 per centMarket capitalisation of the Company at the Placing Price on Admission £37.96 millionGross proceeds of the Placing receivable by the Company £10 millionEstimated net proceeds of the Placing receivable by the Company £9.1 million Commenting on the Placing and Admission, David Bramhill, Managing Director,said: "We have received a very positive response from investors despite the recentmarket turbulence. The funds raised will enable us to continue the execution ofa major drilling and development programme on the Cisco Springs project inconjunction with Running Foxes Petroleum, the operator of the project. Theprogramme has been successful to date and we look forward to reporting furtherprogress to the market. "We intend to complete the acquisition of a majority interest in the VogelBartlesville waterflood project in Kansas shortly and will seek to build theportfolio of interests further within our chosen area of operations." For further information please contact: Nighthawk Energy plc 01271 882160David Bramhill, Managing Director office@nighthawkenergy.net www.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 Background Nighthawk is a hydrocarbon production and development company focused onbuilding a portfolio of assets in the US. Having commenced trading in April2006, Nighthawk raised a total of £6.2 million during 2006 from institutionaland private investors in order to acquire and commence the development of itsprojects. In Grand County, Utah, Nighthawk Production, a wholly-owned US subsidiary of theCompany, holds a 37.5 per cent. working interest in the producing Cisco Springsoil and gas project. Running Foxes, a privately owned Denver-based company, isthe operator and majority owner of the project. OPC, independent consultants, estimates the following reserves, net to theGroup, in the current acreage of the Cisco Springs project: P90 P50 P10 Gas (BCF) 74.9 94.2 116.2Oil (MMBBLS) 0.3 0.6 1.1 OPC estimates the NPV10 of the Group's interest in Cisco Springs to be US$192.3million (approximately £98.6 million). The Cisco Springs project area covers approximately 16,500 acres, of whichapproximately 7,400 acres are subject to processing by the BLM. There arecurrently 18 production wells at Cisco Springs, primarily supplying natural gasto the Californian market with ancillary oil production sold locally. A majordrilling and development programme is in progress with approximately 390 wellsites identified on the current acreage. Ten wells have been drilled sinceNighthawk Production acquired its initial interest, of which seven were newwells and three were re-entries of previous wells. All the wells, with theexception of one re-entry well, encountered commercial quantities ofhydrocarbons. Approximately 60 wells are planned in the next two years. Through its 37.5 per cent. holding in the Cisco Springs project, the Group has aproportional interest in an Ingersoll-Rand drilling rig, a workover rig, 25miles of pipeline connected to a regional gathering system, numerous oil storagetanks and other project related equipment, which are being used in the currentprogramme. The ownership of a drill rig allows flexibility and control of thedrilling programme. Nighthawk Production has the right to acquire 37.5 per cent. of any new landacquired by Running Foxes in the Cisco Springs area. The partners are seekingto expand the lease areas significantly through BLM auctions and privateacquisitions. The Directors believe this additional acreage would addsubstantial reserves to the project and further well sites. Nighthawk Production has acquired the option to purchase a majority interest inthe Vogel Bartlesville waterflood project in Bourbon County, Kansas. TheDirectors intend to exercise the option to purchase following Admission. Whiledrilling coal bed methane wells, Running Foxes, the operator of the leases,discovered a Bartlesville channel while drilling coal bed methane wells whichindicated oil saturation and reservoir continuity. The operator plans to drilla number of production and injection wells to determine the reservoircharacteristics in preparation for flooding the reservoir and oil production. Nighthawk Royalties, a wholly owned US subsidiary of the Company, holds a numberof royalty interests in oil and gas assets with consistent production, provenreserves and field longevity including a 0.82 per cent. holding in WindomRoyalties, which owns an institutional quality portfolio of oil and gas assetswith production from several major producing basins in the US. The Directors believe they have laid the foundations for a substantialhydrocarbon production and development company which already has significantproven reserves, growing cash flow from producing assets and its owninfrastructure. In addition Nighthawk is operating in a country with lowpolitical risk with a government which is supportive of domestic oil and gasproduction. Board of Directors and Management Directors Dr. Roger Norwich, Non-Executive Chairman, aged 56, is a dual graduate ofManchester University having studied geology in the early 1970s and medicine inthe 1980s. He joined the major US oil producer and explorer Texaco aftergraduation and was based in Midland, Texas gaining experience of the PermianBasin. He has worked in the UK North Sea, in particular on the Brent oilfield.Currently Dr Norwich is chairman of Canadian incorporated, Mexican Silver MinesCorporation and of Molycomex S.A. de CV, which owns a molybdenum project inCoahuila, Mexico. David Bramhill, Managing Director, aged 56, has over 35 years' experience in thenatural resources industry. He has managed several energy companies and is theformer managing director of Oil Quest Resources plc. He previously consulted inan engineering capacity for over 20 years on behalf of Rotork plc on projectsfor Shell, Mobil, Exxon, Petrofina, BP and numerous other international energycompanies. Joe O'Farrell, Executive Director, aged 55, has some 25 years of corporateexperience in the oil and mining industry. He is a former director of Oil QuestResources plc. He has assisted a number of companies working in conjunctionwith corporate advisers and brokers in pre-IPO fundraising and projectacquisition. Geoffrey Metzger, Non-Executive Director, aged 65, was a member of the LondonStock Exchange for 25 years and a member of the Securities Institute. He hasbeen involved with raising finance for a number of companies in the naturalresources sector for over 20 years. He was a director of Emerald Energy plcbetween 1990 and 1998. Management David Racher, Technical Consultant, aged 58, began his career as a geologistwith Union Corporation and Phillips Petroleum in the early years of North Seaexploration and later joined Mesa Petroleum where he was part of the developmentteam for the Beatrice oilfield. In 1979 he moved to LASMO plc to manage itsonshore portfolio in Texas, Louisiana, Wyoming, South Dakota and Kansas. Since1997, he has advised a number of independent exploration and productioncompanies, including Hardman Resources. He is a former director of Oil QuestResources plc. Michael Thomsen, President of Nighthawk Royalties, Nighthawk Production andOilQuest USA, aged 55, has 30 years' experience in the natural resourcesindustry and has worked in thirty-three countries in exploration and projectacquisitions. He is the former non-executive chairman of Oil Quest Resourcesplc. His work with US energy producer Freeport-McMoRan Inc. includedexploration in the Gulf of Mexico, the Permian Basin of west Texas, the Sinaiand Red Sea region of Egypt, the Sergipe Basin offshore Brazil and the NeuquenBasin of western Argentina. He led the exploration team that initiallyidentified the Main Pass 299 salt dome prospect, now a 4,000 barrel per day oilproducer. His US experience was primarily directed at the Permian Basin of westTexas and his international work involved basin evaluation in Egypt, Brazil andArgentina. Brian Marshall FCA, Financial Controller and Company Secretary, aged 55, is achartered accountant who established his own independent accountancy practice inBath ten years ago. His practice provides audit, accountancy and taxationservices to a diverse range of clients. This information is provided by RNS The company news service from the London Stock Exchange