Nighthawk Energy Regulatory News (HAWK)

Friday 27 April 2012

NIGHTHAWK ENERGY PLC

("Nighthawk" or "the Company")

Q1 Operations Update

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

Highlights

o Work-over and Geo-science programs continue on schedule

o Early results show increased potential for multi-zone production without hydraulic fracture stimulation

o Plans for drilling of new wells now being accelerated

o Down-hole work completed on eleven wells

o Further top-side work now required to facilitate production increase

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Summary

The Jolly Ranch work-over and geo-science programs are continuing on schedule. Two work-over rigs have been engaged on-site over the past month and have completed the planned down-hole work on eleven wells. Extensive work on the topside production facilities is now underway.

The program has provided valuable additional data on these wells and on the Jolly Ranch acreage as a whole. The Company has also acquired and processed new log information on third party wells and new seismic data.

The early conclusions from this work suggest increased potential for production from a number of hydrocarbon-bearing zones. There is also evidence that commercial production levels can be achieved without hydraulic fracture stimulation, substantially reducing development risks and costs.

The Board are encouraged by these early results and are seeking to accelerate the planned drilling of new wells. Selection of well locations, permitting work and assessment of rig requirements is now underway.

Work-Over Program

The recompletion phase of the work-over program involves firstly, down-hole work to prepare wells for short-term production where possible, and secondly, extensive remedial work on the topside facilities to ensure that any resulting production can be properly treated, controlled, stored and measured.

The down-hole work carried out on eleven wells has variously involved logging, well-bore cleaning, cement work, casing repair, re-perforations and additional new perforations. Seven of the wells had previously been hydraulic fracture stimulated in the Cherokee zones and the recent work has revealed that this process has caused formation damage. In those wells the damaged Cherokee formations have been closed off and the promising higher Marmaton and other formations perforated in preparation for production.

One well is now scheduled for plugging and abandonment. In addition, both salt-water disposal wells have been cleaned up. Work on the remaining four wells in the program is continuing.

The overhaul of topside facilities has proven to be more extensive than initially projected. Pumps and engines require repair and in some cases replacement. Heater-treaters are generally in poor condition and are being cleaned and if necessary replaced. New tanks are being brought in and existing ones cleaned and tested. New electrical equipment is being installed and infrastructure improved.

Extended lead times on new equipment will impact on the timing of bringing some wells back into production. This is being mitigated by deploying existing equipment in good condition, and any available new equipment, to the wells with greatest potential.

As a result, three wells were on production in April, with up to six additional wells expected to commence production once topside work is completed.

Production

Production from Jolly Ranch during the first quarter of 2012 has been extensively impacted as wells were taken offline during the work-over program which Nighthawk commenced upon becoming operator on 23 January 2012. The Company expects the second quarter to be a better guide to the level and consistency of production from existing wells, whilst the third quarter should see the impact of new drilling.

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)

Geo-Science Work

A significant amount of geo-science work has been undertaken and completed over the past two months and substantial new sub-surface information has been obtained from the work-over program. Additional third-party well data and new seismic data have been purchased and processed alongside existing data. The Board are very encouraged by the initial results from this work, which indicate that in addition to the Cherokee and Atoka formations, there are both shallower and deeper formations that show significant potential for production. In particular the Marmaton formation, at typical depths of around 6,200 - 6,500 feet, is a proven oil producer on neighbouring leases. Where these zones have been perforated as part of the work-over program, substantial accumulations of oil in some of the well-bores have been seen.

The work has also provided clear recommendations for new well locations and the Company is pressing on with new drilling plans at an accelerated pace.

Stephen Gutteridge, Chairman of Nighthawk, commented:

"We are pleased with the early results from the Jolly Ranch work-over program and we expect production to increase through Q2 as wells that were unavoidably off-line in Q1 due to the work-overs are brought back online. Whilst remedial work on equipment and infrastructure will take a little longer than expected, there are encouraging signs that our acreage gives access to a wider range of potential oil producing zones than expected. With increased activity and interest from the larger companies operating around us, we are pressing ahead rapidly with our existing program and accelerating our timetable for new drilling."

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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