Nighthawk Energy Regulatory News (HAWK)

1 August 2016

NIGHTHAWK ENERGY PLC

("Nighthawk" or "the Company")

Water Flood Financing and Amendment of Loan Notes

Nighthawk, the US focused oil development and production company (AIM: HAWK and OTCQX: NHEGY), announces that it has entered into a new $3 million second lien note financing with certain shareholders of the Company and executed amendments to two existing agreements and an existing loan note to defer the payment of cash interest and royalty payments as required by the fourth amendment to the facility agreement between the Company and the Commonwealth Bank of Australia ("CBA") which was announced on 30 June 2016.

On 30 June 2016, the Company executed a new amendment to the existing facility agreement with CBA that renewed the $23 million principal amount of the financing, reduced covenants and established a new interest rate. The amended facility agreement required the Company to meet two conditions. Firstly, the Company was required to complete an additional $3 million financing for a water flood pilot project ("Pilot Project") by 31 July 2016; secondly, existing unsecured note holders were required, by 31 August 2016, to agree to defer all cash interest and royalty payments due to them until 31 July 2017.

The Company is pleased to announce that it has now satisfied both of these conditions.

As outlined below, the arrangements involve Johan Claesson, our largest shareholder and Board member, one of his related companies and Peter Gyllenhammar, another substantial shareholder, each of whom, together with others, are deemed to be members of a Concert Party in relation to the Company.

Water Flood Financing through $3 million Second Lien Notes

Nighthawk has completed the new $3 million note financing for the Pilot Project with funding arranged in accordance with the new bank agreement. The Company entered into this note agreement with four of its largest shareholders:

- Johan Claesson and related company (investing $1.65m) - Director & concert party member

- Peter Gyllenhammar (investing $0.75m) - concert party member

- Two other investors (investing a total of $0.6m)

The new $3 million second lien notes bear interest of 15% per annum, payable quarterly, and include a 1% overriding royalty interest, based upon production in excess of projected rates from the Company's Pilot Project. The new $3 million second lien notes are not convertible.

Amendment of Facility Agreements and Unsecured Notes

The Company has also agreed to amend the terms of certain of its existing unsecured facility agreements and loan notes on which interest will now be deferred during the term of the CBA agreement that expires on 30 June 2017, unless extended by CBA at their sole discretion.

The deferral applies to interest and royalty payments on the following loan notes and facility agreements currently in issue ("Existing Loans"):

- Interest on the £3,800,000 9% convertible unsecured loan notes.

- Interest and royalties pursuant to the Facility Agreement dated 23 July 2013 (as amended) between the Company and Fastighetsaktiebolaget Korpralen ("Korpralen"), a Company controlled by Johan Claesson, a director of the Company.

- Continuing royalty payments of 10% on profit sharing pursuant to the Facility Agreement dated 23 March 2013 (as amended) between the Company and Kattrumpan Fastighets AB.

It is proposed that, in return for accepting the interest and royalty deferral, the noteholders/lenders will be given the option, exercisable at their discretion but subject to the condition below, to receive the deferred sums through either of two routes:

Cash Payment: payment in cash on 1 October 2017 of the deferred sums together with interest on those deferred sums applied at a rate equivalent to 15% per annum.

Share Payment: subject to the approval of a waiver of the obligations of Rule 9 of the UK Takeover Code by independent shareholders (the "Waiver") and the disapplication of statutory pre-emption rights, through the issue of new ordinary shares in the Company of 0.25 pence each ("New Ordinary Shares"), with the deferred sums converted at 1 penny per New Ordinary Share. No interest shall be applied to the deferred sums if the Share Payment option is exercised.

If the noteholders/lenders all elect to receive the deferred sums in ordinary shares, at the conversion rate of 1 penny per share, this would equate to the issue of approximately 211 million New Ordinary Shares, or 18% of the issued share capital as enlarged through the new share issue.

The relevant members of the Company's Concert Party have agreed to the above amendments to Existing Loans held by them. Election by them for the payment of the deferred interest and royalty to be satisfied via the Share Payment will require the approval of the Waiver. The election of the Share Payment option would increase the Concert Party's interest, and Mr Claesson's interest individually, in the equity capital of the Company from less than 30% to more than 30% (but under 50%), assuming that no other ordinary Nighthawk shares are issued until the exercise of the Share Payment option.

If the Waiver is not approved by the independent shareholders then the Share Payment option will cease to exist, and the Company will be required to make the Cash Payment to the holders of Existing Loans. The Board of Directors support the approval of the Share Option Payment and believes the future cash payment would further jeopardise the Company's liquidity.

The Company and its advisors are preparing a Circular and related resolutions for consideration by the independent shareholders in order to obtain the Waiver and expect to be posting the Circular shortly and scheduling a General Meeting during August.

Related Party Transactions

The subscription for the new $3 million second lien notes and the amendment of the terms of the Existing Loans by Johan Claesson (and related company) and Peter Gyllenhammar are considered related party transactions for the purposes of Rule 13 of the AIM Rules for Companies. The independent directors, being the Directors other than Johan Claesson, having consulted with the Company's nominated adviser, Stockdale Securities Limited, consider that the terms of the transactions are fair and reasonable insofar as the Company's shareholders are concerned.

Fifth Amendment to the facility agreement

Furthermore, pursuant to recent discussions with certain noteholders of the Company, a fifth amendment to the facility agreement was entered into. Under the fifth amendment, if CBA proposes to assign all or a portion of its rights and obligations under the facility agreement to a proposed assignee, then prior to such assignment taking place, CBA shall provide Korpralen a right of first refusal to acquire such rights and obligations.

Rick McCullough, Chairman of Nighthawk, commented:

"This completes two major steps in our previously announced debt restructuring plan. The $3 million funding from our principal shareholders not only speaks to their support of the Company and the Pilot Project, but it also gives us the necessary capital for Chuck Wilson, Chief Operating Officer of the Company, and his team to move forward to implement the project. This and the amendment of the Existing Loans, meets the two conditions we agreed to in the new CBA facility agreement and further illustrates the support of the bank and our lenders and noteholders. We thank them for this support and vote of confidence.

We will soon be calling on our independent shareholders to approve the Waiver and will be seeking approvals for the authorisation to issue the necessary new shares. Our Board is very supportive of this proposal and believes the entering into these agreements is in the best interest of all our stakeholders."

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