Nighthawk Energy Regulatory News (HAWK)

 NIGHTHAWK ENERGY PLC

("Nighthawk" or "the Company")

Operations Update

Nighthawk, the US focused shale oil development and production company (AIM: HAWK and OTCQX: NHEGY), announces an update on its 75% owned, operated project at Jolly Ranch in the Denver-Julesburg Basin, Colorado.

Highlights

·; Recovery in production underway

·; Average gross production in Q2 2012 increased by 25% over Q1 2012 to 42 bbls/day

·; Average gross production in first half of July 2012 of 57 bbls/day

·; Drilling permit applications submitted for 2 well locations with a further 2 applications pending, with up to 21 additional applications to follow

·; Drilling of new wells expected to commence in August

·; Work-over program completed on schedule

·; Claims against Running Foxes Petroleum ("RFP"), the former operator of Jolly Ranch, are being formally pursued

·; Active lease management program underway

Production

There was a steady improvement in production during Q2 2012 and into July as the Company continued to overhaul, refurbish and replace poor quality and unreliable production equipment. Average gross production in Q2 2012 was 42 bbls/day, up from 33 bbls/day in Q1, with three wells contributing from mid-May onwards. Production from additional wells, initially expected in mid-June, began to flow in early July, contributing to gross average production of 57 bbls/day during the first half of the month.

Three further wells have been re-completed for production but are presently on hold pending resolution of leasing issues with the land-owners.

Gross Oil Production was as follows:-

(Prior to 23 January 2012 Nighthawk had 50% Working Interest/40% Net Revenue Interest)

(Post 23 January 2012 Nighthawk has 75% Working Interest/60% Net Revenue Interest)

New Drilling Program

Following extensive geo-science work, site surveys and completion of surface use agreements, applications for permits to drill two new wells have been submitted to the State with an additional two pending. Additional applications for up to 21 new wells will be submitted over the next few months. Drilling is expected to commence in the second half of August and a drilling rig is expected to be contracted shortly.

Work-Over Program

The existing well work-over program was completed as planned and the work-over rig was released in mid-June. Of the fifteen wells evaluated, eight are considered to be capable of near-term production, one has been plugged and abandoned ("P&A"), another is scheduled for P&A, and decisions on future plans for the other five wells have been deferred pending results from the new drilling program.

Since becoming operator, Nighthawk Production LLC, a 100% owned subsidiary of Nighthawk, has conducted a rigorous assessment of the leases, facilities, equipment, and infrastructure at Jolly Ranch and the level of compliance with US Federal, State and industry best management practices. This review has identified a range of issues which Nighthawk believes will require remedial action, all of which originate from the period of time prior to Nighthawk Production LLC becoming operator.

The review also identified inconsistencies in past costs charged by RFP to Nighthawk Production LLC as a non-operating partner. As a result, the Company has formally invoked its right to audit RFP under the terms of the Joint Operating Agreement ("JOA"), initially focusing on the previous two full years' billing.

The Company has also lodged claims and invoices with RFP under the terms of the JOA and the Purchase and Sale Agreement dated 23 December 2011 in respect of title defects, equipment problems, remedial infrastructure work and refunds of previous payments. Additional claims against RFP as a result of the audit, and in respect of electrical and environmental remediation work, are likely. In embarking on this course of action, the Company is working closely with its US legal counsel.

Lease Management

The Jolly Ranch project covers around 400,000 acres with over 500 separate leases in place, some with renewal options, some without, and with a range of commercial terms. There has been a substantial increase in leasing activity by other companies in recent months and some of Nighthawk's early leases are now being renewed, with a small proportion requiring new terms in an increasingly competitive environment. The Company has initiated actions and allocated funds to preserve key leases, to relinquish less valuable acreage and to add additional attractive leases wherever practicable.

The increased level of interest in the area has created more opportunities for dialogue and discussion with neighbouring operators, which may result in potential for co-operation and cost sharing.

Stephen Gutteridge, Chairman of Nighthawk, commented:

"We continue to make progress on all aspects of the Jolly Ranch project, a considerable achievement given the problems we inherited from the previous operator. Production is gradually recovering, although it is clear that achieving a substantial step-up in rates requires success with the new wells and we are looking forward to the commencement of the drilling program in August.

We will also pursue the claims against RFP that our extensive work since January has identified, but we will not allow this to distract us from delivering our development plan for Jolly Ranch."

Chuck Wilson, Chief Operating Officer of Nighthawk, who has over 32 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.

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