8 Feb 2011 07:00
8 February 2011
NIGHTHAWK ENERGY PLC
("Nighthawk" or "the Company")
Jolly Ranch Quarterly Production Update
Nighthawk, the US focused oil development and production company (AIM: HAWK and OTCQX: NHEGY), in line with the commitment made in the recent Strategic Review announcement, gives its first quarterly production update which covers the quarter ended 31 December 2010.
In Q4 2010 net production totalled 3,086 barrels of oil, a reduction on Q3 (4,092 barrels) due to the increased number of work-overs and recompletions in the period, in line with the Company's current work programme.
Production in Q1 2011 to date is expected to have been broadly in line with the level seen in December 2010 as the work programme of completions and recompletions progresses. A full production update for Q1 2011 is expected to be released before the end of May 2011.
Update on Production
The production figures below are presented net of applicable Colorado State Taxes and Royalty payments to the landowners. The figures for the quarter ended 30 September 2010 are presented for comparison.
Q3 2010 | Q4 2010 | ||
July | 1,702 | October | 1,021 |
August | 1,083 | November | 1,076 |
September | 1,307 | December | 989 |
Total | 4,092 | Total | 3,086 |
| |||
These figures should not be used to calculate a bopd figure as the wells, which are predominantly on test, are intermittently taken offline for routine maintenance, modifications to pumping equipment, weather related conditions, workovers, recompletions or completion in new zones. As the number of wells increases the effect of individual wells being taken offline will have less effect on the overall production figures.
The main objective of the current programme, as previously stated, is to establish the optimum completion and stimulation technique that is most applicable in each of the key interbedded sub zone objectives within the Atoka and Cherokee shale formations, and thereby increase production and reserves.
Tim Heeley B.Eng (Hons) a member of the Society of Petroleum Engineers, Fellow of the Geological Society of London and a Chartered Energy Engineer, who is CEO of Nighthawk and has over 14 years of experience in the hydrocarbons industry, has approved the technical information contained in this announcement.
Enquiries:
Nighthawk Energy plc Tim Heeley, Chief Executive Mike Thomsen, Executive Chairman |
020 3405 1982 +1 720 344 5154 |
Westhouse Securities Limited Tim Feather Matthew Johnson | 020 7601 6100 tim.feather@westhousesecurities.com matthew.johnson@westhousesecurities.com |
Matrix Corporate Capital LLP Louis Castro James Pope | 020 3206 7000 louis.castro@matrixgroup.co.uk james.pope@matrixgroup.co.uk |
Financial Dynamics Ben Brewerton Ed Westropp | 020 7831 3113 ben.brewerton@fd.com edward.westropp@fd.com |
Notes to editors
Nighthawk is a focused oil and gas production and development business with assets onshore USA.
The Company holds a 50% working interest in a shale oil project in Colorado called the Jolly Ranch Group project ("Jolly Ranch"). Running Foxes Petroleum Inc. ("Running Foxes"), holds the remaining working interest and is the operator of the project; comprising the Jolly Ranch, Middle Mist and Mustang Creek areas, covering approximately 410,000 gross acres of Lincoln, Elbert and Washington Counties, Colorado.
Jolly Ranch lies within the southeast flank of the Denver-Julesburg Basin, a major mid-continent hydrocarbon producing basin. The source of the produced hydrocarbons is the black organic shales that are interbedded with siliclastic and carbonate rocks. The shales at Jolly Ranch are within the oil generation window and there is reasonable certainty of reservoir and source rock continuity throughout the project area.
To date, 19 wells of 7,500-8,000 feet have been drilled on a core 50,000 acre area by Nighthawk and Running Foxes, all of which have encountered multiple pay horizons.
The current work programme involves various testing and fraccing procedures on numerous shale target formations to determine the optimum production plan and also gain a greater understanding of this non-conventional play. In addition to testing, Nighthawk's main efforts have been focused on proving up the extent of the asset to help establish the wider project value.
In January 2011 Schlumberger Data & Consulting Services ("Schlumberger"), completed an independent reservoir simualtion model of the core Craig Ranch area. The model consisted of detailed areas of the Craig Ranch project area, totalling approximately 3,200 gross surface acres, and assessed the likely long-term production behaviour of the Marmaton, Cherokee and Atoka horizons. The simulation concluded that there were approximately 30,000 barrels of oil in place per acre in the Cherokee and Atoka shale horizons and the average model area recovery rate was 7.5% on 40-acre spacings with vertical wells. Schlumberger has previously stated that the regional continuity of the formations is such that the resources in place are likely to be laterally continuous across the total acreage.