Nighthawk Energy Regulatory News (HAWK)

26 March 2012

NIGHTHAWK ENERGY PLC

("Nighthawk" or "the Company")

Unaudited Interim Results for the six month period ended 31 December 2011

Nighthawk, the US focused shale oil development and production company (AIM: HAWK and OTCQX: NHEGY),announces its half yearly results for the six months ended 31 December 2011.

Highlights

·; Control and operatorship of the Jolly Ranch Project, Colorado, USA, successfully secured

·; Fully funded work-over and drilling program in 2012

·; Board, management and operational team strengthened and re-aligned

Financial

·; Balance sheet strengthened by £14.7 million fundraising in January 2012

·; Revenues of $0.42 million (H1 FY2010-11: $0.56 million restated, continuing basis) reflect lower production and lack of investment in 2011 prior to Nighthawk becoming operator

·; Operating loss of $16.6 million (H1 FY2010-11: $25.2 million) includes an impairment of US$12.6 million relating to Nighthawk's existing 50% interest in the Jolly Ranch Project and exceptional transaction costs of US$1.8 million (H1 FY2010-11: impairment costs $23.3 million)

Operational

·; Average gross oil production of 63 bbls/day reflects lack of investment (H1 FY2010-11: 98 bbls/day)

·; 2012 work-over program underway

Stephen Gutteridge, Chairman of Nighthawk, commented:

"The interim results cover a period of significant transition for Nighthawk which concluded with the announcement of the acquisition of a further 25% interest in, and the operatorship of, the Jolly Ranch Project. The results also reflect the lack of investment in Jolly Ranch throughout 2011, which affected production and also left much remedial and repair work for us to undertake in order to improve production from the current low levels and to meet our own and Colorado State standards and requirements.

This work is now well underway as the first step in a fully funded work-over and drilling program planned for 2012, and our focus is now on delivering operational success, including increased production levels. We will be updating regularly on this program and a separate operational update has been announced this morning. We will also be monitoring the increasing levels of third party drilling and leasing activity taking place around our acreage, a trend that we regard as extremely positive for our own project."

- Ends -

Enquiries:

Chairman's Statement

Strategy

Following the Board's strategic decision to focus solely on the Jolly Ranch shale oil project, Nighthawk's primary objectives during the six month period to 31 December 2011 ("H1 FY 2011-12") were to secure control and operatorship of the project, and to fund a new work-over and drilling program for 2012.

Following a protracted and challenging process, these objectives were finally achieved at the end of December 2011 with the announcement of a fundraising and an agreement to acquire from Running Foxes Petroleum, Inc. ("RFP") an additional 25% working interest in, the Jolly Ranch project, giving Nighthawk the operatorship and a 75% working interest. These steps were approved by shareholders at a General Meeting on 20 January 2012 and took formal effect from 23 January 2012.

The initial consideration for the acquisition comprised cash of US$8.5 million and US$4 million in Nighthawk shares which approximated to an acquisition cost of US$122 per acre. In addition, a further cash amount of US$1.0 million may be payable in the event RFP fails to sell its remaining 25% working interest in the Jolly Ranch Project by an extended deadline of 30 June 2012. In the event of a sale or disposal by the Company of all or a portion of its working interest in the Jolly Ranch Project to a third party within five years, the Company will pay RFP a portion of the cash proceeds (or the fair market value for any non-cash proceeds) which it receives in connection with such sale or disposal up to a maximum aggregate amount of US$5.0 million. To finance the acquisition and to provide funds for the further development of Jolly Ranch, the Company raised a total of £14.74 million comprising £10 million of unsecured convertible loan notes, £1.85 million through an open offer to shareholders and £2.89 million through a placing. As a result, Nighthawk now has sufficient funds to undertake a substantial work-over and drilling program in calendar 2012.

Operational and Financial Performance

The Jolly Ranch Project is a 410,000 gross acre shale oil project, which is in the early stages of production, but requires further work and investment to sustain longer-term commercial levels of production, add reserves, demonstrate the continuity of the shale over the acreage, and increase the value of the acreage.

During the six month period to 31 December 2011, development activity was severely restricted due to lack of funds, which resulted in a cutback in maintenance work, a shortage of new and replacement equipment and the loss of some production from shut-in wells. As a consequence gross production in the six months to 31 December 2011 fell to an average of 63 bbls/day from 71 bbls/day in the first half of calendar 2011 and was significantly lower than the 98 bbls/day average production achieved in the six months to 31 December 2010.

Group revenues in the six months to 31 December 2011 were sharply down on the prior period on a continuing basis due to the fall in production with significantly higher administrative costs, primarily due to one-off costs incurred in the acquisition and fund-raising process of approximately US$1.75 million. Director's salaries and fees were cut by 25% from 1 November 2011 and other overhead savings measures such as lower cost office space have been implemented.

The unaudited results for the period to 31 December 2011 include a change in accounting policy for early stage production revenue. This change ensures that the Company's accounts follow the Statement of Recommended Practice (SORP) for test production revenue, in line with the accounting treatment of comparable oil and gas companies. Prior accounting periods have been restated for this change in accounting policy. The change has no impact on the Group statement of cash flows.

Informed by the price paid to acquire the additional 25% working interest in Jolly Ranch and in accordance with the required treatment under the International Financial Reporting Standards, an impairment of approximately US$12.6 million relating to Nighthawk's existing 50% interest has been included in administration expenses. All of the Company's other projects have now been fully disposed, leaving Nighthawk as a focused US shale oil play. Normalised losses (adjusted for impairments, depreciation, amortisation, transaction costs and discontinued operations) were $2.0 million (H1 FY 2010-11: loss $1.3 million, FY 2010-11: loss $3.1 million).

Board and Management

The Board and management team has been both strengthened and re-aligned to meet the challenge of developing the Jolly Ranch Project as operator.

Chuck Wilson who has over 32 years' highly relevant oil and gas industry experience joined Nighthawk in August 2011 as Chief Operating Officer of Nighthawk's US subsidiaries, and is directing the 2012 work-over and drilling activity.

Mike Thomsen and Tim Heeley relinquished their roles as Chairman and Chief Executive respectively and stepped down from the Board of Nighthawk Energy plc to work alongside Chuck Wilson in Denver, focusing on delivering the overall Jolly Ranch Project development plan, including leasing and commercial arrangements and managing business partners and projects.

Richard Swindells joined the Board in June 2011 as Chief Financial Officer and Stephen Gutteridge joined in September 2011 as Chairman, assuming an executive role in January 2012.

Geoff Metzger, Non-executive Director, retired from the Board in October 2011.

2012 Plans

The Board is of the view that the Jolly Ranch Project is both geologically and operationally viable and is confident that it can be developed into a valuable and sustainable oil producer; a view that is further reinforced by the increase in regional activity around the Jolly Ranch Project, including new leasing and drilling operations.

As previously announced, in 2012 the Company plans to invest $7.5 million gross on a work-over program on 15 existing wells, which has already commenced, and the drilling of 5 new wells, the first of which is anticipated to spud early in the second half calendar 2012. In addition there will be investment in well-logging, re-interpretation of seismic data, geological studies and lease extensions during the year. When Nighthawk assumed the operatorship on 23rd January 2012 production had fallen to less than 50 bbls/day, and the Board aims to achieve a substantial uplift on that figure during the year.

Unaudited Condensed Consolidated Income Statement

for the period ended 31 December 2011

Unaudited Condensed Consolidated Statement of Comprehensive Income

for the period ended 31 December 2011

Unaudited Condensed Consolidated Balance Sheet

as at 31 December 2011

Unaudited Condensed Consolidated Statement of Changes in Equity

for the period ended 31 December 2011

Unaudited Condensed Consolidated Cash Flow Statement

for the period ended 31 December 2011

Notes to the consolidated cash flow statement

for the period ended 31 December 2011

1. Reconciliation of profit before tax to cash generated from operations

Notes to the Unaudited Financial Information

for the period ended 31 December 2011

Accounting policies

The interim financial information in this report has been prepared on the basis of the accounting policies set out in the audited financial statements for the year ended 30 June 2011, which complied with International Financial Reporting Standards as adopted for use in the European Union ("IFRS").

IFRS is subject to amendment and interpretation by the International Accounting Standards Board ("IASB") and the IFRS Interpretations Committee and there is an ongoing process of review and endorsement by the European Commission.

The financial information has been prepared on the basis of IFRS that the Directors expect to be applicable as at 30 June 2012, with the exception of IAS 34 Interim Financial Reporting.

The condensed financial information for the year ended 30 June 2011 set out in this interim report does not comprise the Group's statutory accounts as defined in section 434 of the Companies Act 2006.

The statutory accounts for the year ended 30 June 2011, which were prepared under IFRS, have been delivered to the Registrar of Companies. The auditors reported on these accounts; their report was unqualified; did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006, and did not include reference to any matters to which the auditor drew attention by way of emphasis.

1. Change in accounting policy - Revenue recognition

Following a review of the Group's accounting policies, the accounting treatment of test production revenue has been changed to make it more comparable with other oil & gas companies.

Previously test production revenue was recognised at a profit with the associated costs included within intangible exploration costs.

Under the revised policy, test production revenue is recognised at a zero margin and a corresponding deduction made against intangible exploration costs. The impact of this change in accounting policy is detailed below

There is no impact on the Group statement of Cashflows.

2. Administrative expenses

Included within Administrative Expenses are one-off expenses incurred and accrued during the period in the Company's acquisition and fundraising process.

Included within Administrative Expenses in the current period is an impairmentrelating to the Jolly Ranch project, resulting from the acquisition of an additional 25% stake in the project on 23 January 2012. Impairments recognised in prior periods relate to the discontinued Cisco and Cliffs projects.

3. Loss per share attributable to the equity shareholders of the Company

3. Loss per share attributable to the equity shareholders of the Company (continued)

As at 31 December 2011, 30 June 2011 and 31 December 2010 the options in issue are not dilutive under IAS 33, Earnings per Share, because they would have the effect of decreasing the loss per share. As such there is no difference between the basic and dilutive loss per share at these dates.

4. Taxation

There was a small current tax charge for the period in a US subsidiary of US$10,344, but no other current tax charge for the year due to the loss incurred (2010: US$11,478).

A deferred tax asset in respect of trading losses and share based payments has not been recognised due to the uncertainty over timing of future profits. The trading tax losses are recoverable against suitable future trading profits.

5. Share Capital

During the period to 31 December 2011, 78,892,000 shares were issued through a Placing at 2.5p raising approximately £1.97 million (US$3.16 million). Following the Placing, there were 456,995,080 ordinary shares of 0.25p each in issue.

During the period to 31 December 2010, 28,463,600 shares were issued at 11.51p raising £3.275 million (US$5.238 million) as a result of a draw down from the EFF agreement with Darwin. Following the Placing, there were 358,103,080 ordinary shares of 0.25p each in issue.

6. Post Balance Sheet Events

On 23 January 2012, the Group completed the acquisition of a further 25% working interest in, and assumed the operatorship of, the Jolly Ranch Project for an initial consideration of US$12.5 million, satisfied by US$8.5 million in cash and approximately US$4 million in New Ordinary Shares in the Company.

Additionally:

·; Existing options to subscribe for 1,250,000 Ordinary Shares at a price of 53p held by Steven Tedesco, the CEO of RFP, were cancelled and warrants to subscribe for 1,250,000 Ordinary Shares at a price of 5p per share at any time on or before the third anniversary of Admission were issued to him

·; Nighthawk also agreed to assign all of its rights, title and interest in the properties owned by it in the Cisco Springs Project in Grand County, Utah, USA for nil consideration

·; In the event of a sale or disposal by the Company of all or a portion of its working interest in the Jolly Ranch Project to a third party within five years, the Company will pay RFP a portion of the cash proceeds (or the fair market value for any non-cash proceeds) which it receives in connection with such sale or disposal up to a maximum aggregate amount of US$5 million

·; Nighthawk was also informed that RFP has entered into exclusive discussions to sell its remaining 25% working interest to a third party with completion no later than 30 April 2012. In the event that this transaction does not complete by that date, Nighthawk has agreed to pay RFP an additional US$1 million

On Completion, Tim Heeley stepped down as Chief Executive and as a Director to work with the existing Denver team to progress the development of the Jolly Ranch project. Stephen Gutteridge, previously Non-Executive Chairman, assumed the role of Executive Chairman.

On 23 January 2012, the Group issued and allotted 291,940,340 New Ordinary Shares, in respect of the Acquisition, Placing and Open Offer as follows:

·; In relation to the Acquisition, the issue by the Company of 102,236,422 new Ordinary Shares at a price of 2.5p per share

·; Open Offer for 74,003,918 New Ordinary Shares at a price of 2.5p per share raising gross proceeds of approximately £1.85 million

·; Placing of 115,700,000 new Ordinary Shares with institutional and other investors at a price of 2.5 pence per share raising gross proceeds of £2,892,500

Following Admission of these New Ordinary Shares, there are 748,935,420 ordinary shares of 0.25p each in issue.

7. Copies of the Half Yearly Report

A copy of this Half Yearly Report will be made available on the Company's website at www.nighthawkenergy.comand copies are being posted to those Shareholders who have elected to receive hard copies of Company reports.