Nighthawk Energy Regulatory News (HAWK)

24 Jul 2009 14:02



Friday 24 July 2009

NIGHTHAWK ENERGY PLC

("Nighthawk" or "the Company")

Placing of £22.4 million

Nighthawk (AIM: HAWK), the US focused hydrocarbon production and development company, announces that it has conditionally raised £22.4 million (before expenses) through a placing of new ordinary shares at a price of 35 pence per share (the "Placing") by its broker, Hanson Westhouse Limited ("HansonWesthouse").

Background to the Placing

On 20 July 2009, the Company announced details of an independent evaluation by Schlumberger Data & Consulting Services, of the hydrocarbons in place at the Jolly and Craig Ranch fields, Lincoln County, Colorado part of the Jolly Ranch project. The P50, or most likely, oil in place ("OIP") estimate of the 246,000 acres evaluated, using probabilistic methods, is calculated to be 1.462 billion barrels gross. Nighthawk holds a 50% working interest in the project and Running Foxes Petroleum Inc. ("Running Foxes"), the operator, holds the remaining 50%.

In addition, the Company announced, on 15 July 2009, the results of an independent technical review in respect of the Buchanan Group project conducted by Oilfield Production Consultants Limited ("OPC") and previous to this, a similar report on the Devon project. These two projects, combined with the nearby Xenia Project, now form the Revere project for which the OPC reports determine that the most likely case stock tank oil originally in place ("STOOIP") is 210.5 million barrels gross which is expected to increase as additional wells are drilled on the offsetting acreage.  A report on the Xenia acreage is due to be completed by the end of Q3 2009 by OPC.  Nighthawk has a 50% interest in the Buchanan Group project, an 80% interest in the Devon project and a 50% interest in the Xenia project. 

Use of Proceeds

The net proceeds of the Placing will enable the Company to undertake a 12 month development programme. The programme will include the drilling of 20 wells, including a number of horizontal wells, and the building of production facilities at Jolly Ranch; the drilling of more than 200 wells and the building of production facilities at the Revere project; with the remainder being used to fund other projects and corporate overheads.

The Placing 

The Company, through its broker, HansonWesthouse, has received commitments to subscribe for 64,095,857 new ordinary shares (the "Placing Shares") at 35p per share, raising £22.4 million (before expenses).

The existing power granted by shareholders to the directors of the Company to allot shares for cash is insufficient to allow the issue of all of the Placing Shares.  Therefore, the Placing is conditional on the passing of the necessary resolutions at a General Meeting of the Company which is expected to be held at the offices of Osborne Clarke, One London Wall, London, EC2Y 5EB at 11.00 a.m. on 14 August 2009 and is expected to be completed at 8.00 a.m. on 17 August 2009 on admission of the Placing Shares to trading on AIM. A Notice of General Meeting will be posted to shareholders early next week.

Following the Placing, there will be 329,639,480 ordinary shares of 0.25p each in issue.

David Bramhill, Managing Director of Nighthawk, commented:

"The recent independent reports on the potential of the Jolly Ranch project and the Revere project have transformed the scale of the opportunity for Nighthawk; Jolly Ranch in particular could rapidly become a world class asset.  The funds secured by this placing will enable us to continue to progress the value of Nighthawk's portfolio for our shareholders.

"We will continue a rapid pace of development to determine optimum production and recovery rates, and continue the de-risking of the Jolly Ranch project. We look forward to updating the market as we progress our core assets with a clear focus on delivering maximum value to our shareholders."

Tim Heeley B.Eng (Hons) a member of the Society of Petroleum Engineers, Fellow of the Geological Society of London and Chartered Energy Engineer, who is Commercial Director of Nighthawk and has over 12 years of experience in the hydrocarbons industry has approved the technical information contained in this announcement.

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