Nighthawk Energy Regulatory News (HAWK)

29 September 2014

NIGHTHAWK ENERGY PLC

("Nighthawk" or "the Company")

Unaudited

Interim Results for the six months ended 30 June 2014

Nighthawk, the US focused oil development and production company (AIM: HAWK and OTCQX: NHEGY), announces its interim results for the six months ended 30 June 2014 ("First half 2014").

Financial Highlights - Record Profitability and Cash-flow

· First half 2014 revenue of US$25.4 million, a 345% increase on the comparable period in 2013 (US$5.7 million)

· First half 2014 Normalised Operating Profit* of US$14.1 million, greater than the full year of 2013 (US$12.9 million ) and a more than tenfold increase on first half 2013 (US$1.33 million)

· First half 2014 Normalised EBITDA* of US$17.4 million, increased from US$2.2 million in the comparable period 2013

· Capital investment in drilling and development of US$18.8 million in first half 2014 (Full year 2013: US$22.4 million)

· First half 2014 Operating Cash-flow of US$14.4 million (First half 2013: US$4.7 million)

Operational highlights - Successful Production Growth

· First half 2014 gross oil sales of 342,384 barrels compared to 83,428 barrels in first half 2013

· Net oil sales of 279,964 barrels (Nighthawk average net revenue interest** of 81.1%)

· Seven production development wells drilled with six wells successfully brought into production

· New Snow King oil discovery brought into production

· Two exploration wells drilled and two salt-water disposal wells completed

· Average daily gross oil production increased from 1,556 barrels/day ("bbls/day") in December 2013 to 2,062 bbls/day in June 2014

· Rick McCullough appointed to the Board as Chairman to succeed Stephen Gutteridge from 1 October 2014

Stephen Gutteridge, Chairman of Nighthawk, said;

"Nighthawk has delivered an exceptionally strong set of financial results for the first six months of 2014 with performance on most measures close to equaling the twelve months results for 2013, which in themselves were good numbers. The key has been the successful drive to grow production through low cost development drilling in known producing areas and successful de-risked exploration drilling. Nighthawk now has a firm foundation for further growth and the challenge will be to exploit the considerable opportunity across Nighthawk's acreage to deliver the next step up in production from this higher base. With the drilling of new well locations at Arikaree Creek and Snow King, new structural exploration targets and the Company's first horizontal well all planned, I am confident that challenge will be met."

Definitions

* Normalised Operating Profit is operating profit adjusted for exceptional administrative items and, in respect of the period ended 31 December 2013, a gain on stepped acquisition. Normalised EBITDA is operating profit adjusted for depreciation, amortisation, exceptional administrative items and, in respect of the period ended 31 December 2013, a gain on stepped acquisition.

**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:

Chairman's Statement

Following on from the strong financial and operational results for the 2013 year, Nighthawk continued to successfully develop its Smoky Hill and Jolly Ranch projects in Colorado during the half-year ending 30 June 2014. Gross oil production continued to increase, rising from 1,556 barrels per day in December 2013 to 2,062 barrels per day in June 2014. Gross oil sales for the six months ending 30 June 2014 were 342,384 barrels, an increase of over 300% on the same period of 2013.

Revenues for the period from Nighthawk's average 81.1% Net Revenue Interest were over US$25 million, with normalised operating profit of US$14.1 million. Operating cash-flow was US$14.4 million.

The Company executed a very active drilling campaign in the first six months of 2014, with a contracted drilling rig fully utilized for the period. Nighthawk's drilling strategy was to allocate resources to both development drilling of the Arikaree Creek oil-field and to exploration work in both the Mississippian and Pennsylvanian geological formations.

At Arikaree Creek, four wells were drilled with three being successfully brought into production from the Mississippian formations. Three wells were drilled targeting the Pennsylvanian formations in the John Craig area with mixed results. One of the wells, the John Craig 2-2, encountered a relatively high pressure gas condensate discovery, unusual for this area, and work is ongoing to establish the commercial viability of gas production and sales. All three wells are contributing to current oil production.

On the exploration front, Nighthawk continues to target identified structural Mississippian plays similar to Arikaree Creek. The Snow King 13-33 well was drilled on one such target and made a significant new discovery. The well is successfully producing and although a second well was structurally low and failed to produce, the Company expects to drill further successful producing wells on this discovery in the second half of 2014.

Two further exploration wells were drilled, the Jackson Hole 1-32 and the Knoss 9-20. The Jackson Hole 1-32 is west of Arikaree Creek, in an unexplored area, and provided valuable information on both the Pennsylvanian and Mississippian formations. The drilling rig has subsequently returned to that well to carry out additional work. The Knoss 9-20 well, on Nighthawk's more southerly acreage, was plugged and abandoned.

A new salt-water disposal well was drilled at Arikaree Creek in the first half of 2014 and the old John Craig 7-2 well was completed as a salt-water disposal well. Both these wells are now operational, contributing to substantial cost savings on water haulage and disposal. Nighthawk also plans to reduce operating costs on its southern acreage by plugging and abandoning a number of old wells and releasing the associated acreage.

Nighthawk's exploration and development strategy is based on gathering as much geo-science information as possible from drilling logs and cores, new seismic shoots, seismic acquisition and old well data. Analysis of this data has enabled Nighthawk to formulate new priorities and targets for the second half of 2014 and beyond. These targets include horizontal drilling at Arikaree Creek, development of the Snow King discovery and exploration drilling of additional identified structural targets.

These plans mean Nighthawk is now entering an exciting new phase in its development and changes have been implemented to ensure that the Company is properly equipped to manage these developments. In April 2014 the Board was strengthened by the appointment of Johan Claesson and Chuck Wilson as directors. Johan is Nighthawk's largest shareholder and has supported the Company with short-term financing when required. Chuck is the Chief Operating Officer based in Denver. The focus for the Company's executive debate and decision making is in Denver and a further change to the Board was to appoint a Denver based Chairman to lead the company through this next exciting period and I am delighted to welcome Rick McCullough to the Board to succeed me from 1 October 2014. In addition to the changes at Board level the Denver team has been expanded to include additional geological and petroleum and production engineering experience.

With a clear strategy, multiple new opportunities and a strengthened team, the final piece of the jigsaw was to refinance the Company's debt introducing more structured, longer term, reserve-based lending facilities. This has been successfully accomplished with the new $100 million headline facility from Houston based Commonwealth Bank of Australia.

As a result Nighthawk is now strongly positioned to capitalize on the significant upside potential that the Board sees in our Colorado assets, and I am pleased that I leave the Company in excellent shape.

I would like to thank our shareholders, staff and suppliers for their valuable support over the past period.

Stephen Gutteridge

Executive Chairman

29 September 2014

Chief Financial Officer's Statement

1. Normalised operating profit is operating profit adjusted for exceptional administrative items and, in respect of the period ended 31 December 2013, a gain on stepped acquisition.

2. Normalised EBITDA is operating profit adjusted for depreciation, amortisation, exceptional administrative items and, in respect of the period ended 31 December 2013, a gain on stepped acquisition.

The six month period ended 30 June 2014 saw strong production growth as a result of operational delivery which resulted in continued, healthy operating cash flow and profit margins. Normalised EBITDA of US$17.4 million in the six month period exceeded that generated in full year 2013.

Gross oil sales of 342,384 barrels during the period represented an increase of 310 per cent on the first half 2013 and an increase of 25 per cent on the second half 2013 (six months ended 30 June 2013: 83,428 barrels; year ended 31 December 2013: 358,294; six months ended 31 December 2013: 274,866 barrels).

Group revenues from continuing operations for the period were US$25.4 million (six months ended 30 June 2013: US$5.7 million; year ended 31 December 2013: US$26.2 million). The average price realised during the period fell slightly to $91.73 per barrel from $92.70 per barrel in second half 2013. As highlighted in the Chairman's Statement, production growth in the period was driven primarily by continued successful drilling and completion of new wells at the Arikaree Creek oilfield and also by the successful Snow King 13-33 discovery.

Gross profit of US$17.3 million (six months ended 30 June 2013: US$3.7 million; year ended 31 December 2013: US$18.4 million; six months ended 31 December 2013: US$14.8 million) represented a slightly lower margin than second half 2013 primarily due to production severance taxes and drilling rig contract costs.

Administrative expenses during the period were US$3.2 million (six months ended 30 June 2013: US$2.4 million; year ended 31 December 2013: US$5.6 million). Administrative expenses in prior periods have been adjusted to reclassify gains and losses on foreign exchange and derivate financial instruments to finance income and expense as disclosed in note 2 to these interim financial statements.

Exceptional administrative expenses during the period of US$3.2 million relate to decisions taken to plug and abandon three wells. Additionally, since the period end, certain leases within the Jolly Ranch project expired without renewal and the Company has decided to plug and abandon three further non-producing wells located on those leases. As a result, there will be further charges relating to plugging, abandonment and reclamation in the second half of 2014.

Normalised earnings before interest, taxation, depreciation and amortisation at US$17.4 million ("NEBITDA") exceeded NEBITDA for the 2013 full year (six months ended 30 June 2013: US$2.2 million; year ended 31 December 2013: US$16.6 million). On a per barrel basis NEBITDA during the period was $50.87/barrel, a decrease on second half 2013 at $52.33/barrel due primarily to the direct cost increases explained above and the lower realised oil price.

Current tax charges of US$0.3 million arose in the US during the period and a US$1.0 million deferred tax expense was recognised arising from the utilisation of brought forward losses.

The Group statutory profit for the period was US$7.2 million (six months ended 30 June 2013: loss US$0.8 million; year ended 31 December 2013: US$19.2 million).

Cash inflow from operating activities for the period was US$14.4 million (six months ended 30 June 2013: US$4.7 million; year ended 31 December 2013: US$14.4 million).

Cash flow used in investing activities during the period of US$17.4 million (six months ended 30 June 2013: US$10.6 million; year ended 31 December 2013: US$34.1 million) comprised principally of capital expenditure on drilling new wells at the Arikaree Creek oilfield, lease payments, seismic purchases and well work-overs, and also included proceeds of US$1.4 million received on sale of some non-core acreage.

Cash flow from financing activities during the period totaled US$5.7 million (six months ended 30 June 2013: US$10.7 million; year ended 31 December 2013: US$19.2 million) and included the drawing of a US$1.5 million 9 per cent. coupon short term loan, the drawing of an additional US$4.5 million 15 per cent. coupon short term loan from existing providers of loans to the Company, a net receipt of US$0.8 million arising from the sale of WTI call options and receipts and payments on other hedging contracts, and interest payments of US$1.3 million.

Since the period end, the Group has entered into a senior secured reserves based lending facility with Commonwealth Bank of Australia with a headline facility amount of up to US$100.0 million. Under this facility, the borrowing base that is currently available is US$35.0 million. The borrowing base may be applied as required to further capital expenditures by the Group, to reducing existing debt and for general corporate purposes. The borrowing base will be subject to regular re-determinations based upon factors including but not limited to petroleum reserves and oil prices.

Concurrent with entering into the facility with Commonwealth Bank of Australia, the Group has also reduced and restructured its unsecured higher coupon debt, unsecured convertible loan notes and warrants, as further described in note 6 to these interim financial statements.

At 30 June 2013, the Group held cash balances of US$4.3 million (30 June 2013: US$7.0 million; 31 December 2013: US$1.7 million).

Richard Swindells

Chief Financial Officer

29 September 2014

Unaudited Condensed Consolidated Income Statement

for the 6 months ended 30 June 2014

Unaudited Condensed Consolidated Statement of Comprehensive Income

for the 6 months ended 30 June 2014

Unaudited Condensed Consolidated Balance Sheet

as at 30 June 2014

Unaudited Condensed Consolidated Statement of Changes in Equity

for the 6 months ended 30 June 2014

Unaudited Condensed Consolidated Cash Flow Statement

for the 6 months ended 30 June 2014

Notes to the consolidated cash flow statement

for the 6 months ended 30 June 2014

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

Notes to the Unaudited Financial Information

for the 6 months ended 30 June 2014

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 31 December 2013, 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 on-going 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 31 December 2014, with the exception of IAS 34 Interim Financial Reporting which is not mandatory for companies listed on the AIM Market.

The condensed financial information for the period ended 30 June 2014 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 period ended 31 December 2013, 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. Exceptional items

During 2013 Nighthawk acquired a further 25.0% working interest in the Jolly Ranch Project taking its working interest in all leases and wells to 100.0%. The consideration paid for the acquired 25% was US$12 million which indicates the fair value of the existing 75% working interest to be US$36 million resulting in a gain of US$3.16 million recognised on stepped acquisition in 2013.

During the period decisions were taken to plug and abandon the Craig 12-28, the Pikes Peak Williams 4-30 and the Knoss 9-20 wells. As a result of these decisions, the associated assets have been fully impaired as at 30 June 2014.

2. Finance income and expense

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

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

Due to the Group's reported loss in the prior period ended 30 June 2013 share options and warrants were not taken into account when determining the weighted average number of ordinary shares in issue during the year and therefore the basic and diluted earnings per share were the same.

The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:

Taking the Company's potential dilutive ordinary shares into consideration, the Company's weighted average number of ordinary shares for the purposes of diluted earnings per share, is as follows:

No diluted earnings per share applied to the period ended 30 June 2013 given the loss for the period.

4. Taxation

There was a current tax charge of US$300,236 arising in the US in the period (period ended 30 June 2013: US$460; year ended 31 December 2013: US$1,119,384). Management have applied prudent assumptions in arriving at the estimated tax charge for the six month period ended 30 June 2014.

No tax charge arose in the in the UK in the period (period ended 30 June 2013: £nil; year ended 31 December 2013: £nil)

A deferred tax asset of US$6,978,000 was recognised in the year ended 31 December 2013 (period ended 30 June 2013: US$nil) in relation to the taxable losses of US$17.7 million available in the USA at Federal tax 35% rate and Colorado State tax 4.63% rate expected to be utilised in the next 2 years. A deferred tax expense of US$1,041,227 was recognised during the period arising from the utilisation of brought forward losses. There was a deferred tax asset relating to unutilised brought forward losses at the period end of US$5,936,462.

No deferred tax asset has been recognised for the remaining tax losses of US$96.8 million available in the USA due to uncertainty over the timing of future profits and on account of the fact that the Group's ability to utilise these tax losses is restricted under S382 of the IRS Code to an amount of US$0.4 million per annum. The remaining unrecognized taxable losses in the USA can be carried forward for U.S. Federal and Colorado State income tax purposes for 20 years. These losses if not utilized will begin to expire in the year 2026 through 2032.

A deferred tax asset in respect of taxable losses available in the UK has not been recognised due to the uncertainty over timing of future profits. The taxable losses available in the UK can be carried forward indefinitely.

5. Share Capital

During the period ended 30 June 2014, the Company issued a total of 8,054,548 ordinary shares: 6,254,548 at a price of 5.5p per share and 1,800,000 at 5p per share, resulting in a premium of US$691,062.

During the comparative period to 30 June 2013, no shares were issued.

During the year ended 31 December 2013 the Company issued a total of 5,450,000 ordinary shares: 2,000,000 at a price of 8p per share, 1,250,000 at 5p per share and 2,200,000 at 5.5p per share, resulting in a premium of US$525,157.

On 20 November 2013, the Company carried out a capital reduction exercise. This resulted in the Company's share premium and the merger reserve being cancelled in full (no impact on share capital), with an amount recognised in the retained earnings reserve and the creation of a special (restricted) reserve.

Following the issue of shares in the period, there were 955,739,968 ordinary shares of 0.25p each in issue at 30 June 2014.

6. Post Balance Sheet Events

- On 12 August 2014, certain of the Groups oil and gas leases over approximately 4,700 net mineral acres in the Jolly Ranch project area expired leading to the requirement to plug and abandon three additional wells at the Jolly Ranch project;

- On 11 August 2014 a conversion to equity of £200,000 of the June 2013 loan notes was effected by the issuance of 3,636,364 shares, resulting in share premium of £190,909 being recognised;

- On 8 September 2014, share options to subscribe for 300,000 ordinary shares were issued to an employee;

- On 26 September 2014, the Group entered into a new reserves based lending facility with Commonwealth Bank of Australia with an initial borrowing base of $35.0 million. Concurrent with this, the Group:

o will repay $10.0 million of its current loans;

o has extended $10.0 million of its current 15 per cent. coupon loans to March 2019;

o has agreed to extend the expiration date of 30 million warrants to subscribe new ordinary shares at 7.25 pence per share from July 2015 to March 2019;

o has extended the redemption date of £5.1675 million zero coupon unsecured convertible loan notes from January 2015 to March 2019;

o has agreed to extend the expiration date of 100 million warrants to subscribe new ordinary shares at 5.0 pence per share from January 2015 to March 2019; and

o has extended the redemption date of £3.135 million 9 per cent. coupon unsecured convertible loan notes from June 2015 to March 2019.

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.com