Nighthawk Energy plc (NHEGY: OTCQX International) | Production and Development Update

OTC

Production and Development Update

Aug 21, 2014

OTC Disclosure News Service

Guildford, ENG, United Kingdom


NIGHTHAWK ENERGY PLC
(“Nighthawk” or “the Company”)
 
Production and Development Update

 
Nighthawk, the US focused oil development and production company (AIM: HAWK and OTCQX: NHEGY), announces an update on production and development plans at its 100% controlled and operated Smoky Hill and Jolly Ranch projects in the Denver-Julesburg Basin, Colorado.
 
Highlights
 
·       Average gross oil production from all wells in the calendar month of July 2014 was 2,007 barrels per day (“bbls/day”)
 
·       Blackcomb 12-14 well at Arikaree Creek expected to commence production in August 2014 
 
·       Cumulative gross oil production from the Arikaree Creek field has exceeded 700,000 barrels (“bbls”)
 
·       Additional reserves at Arikaree Creek to be developed through horizontal drilling
 
·       3D seismic and multi-well development program planned for Snow King discovery 
 
·       Drilling rig currently on location at Jackson Hole 1-32 well
 
(Nighthawk has an average Net Revenue Interest* of approximately 81.5% in the gross oil production)
 
Production
 
Average gross oil production from all wells in July 2014 was 2,007 bbls/day. Production was affected by planned pressure build up tests on two wells at Arikaree Creek and routine maintenance work on a further two wells.
   
The Blackcomb 12-14 well at Arikaree Creek was drilled to a depth of 8,445 feet and successfully encountered the Mississippian Spergen oil pay zone and is expected to commence production in August 2014.
 
Initial oil production from the John Craig 2-2 well was delayed and the well commenced production on 9 August 2014.
 
Total gross oil production from the Arikaree Creek field has now exceeded 700,000 bbls, significantly ahead of the original recovery expectations in the January 2013 independent reserves report. A new independent reserve report is currently being prepared.  
 
During August and September 2014 further routine pressure build up tests and maintenance work will be implemented on a number of wells including the Taos 1-10 and Steamboat Hansen 8-10 wells. This will have a short-term impact on production, particularly in August 2014, but will benefit reservoir management and production levels through the winter period and in the longer-term. 
 
Development Plans – Arikaree Creek
 
The Arikaree Creek oil-field was discovered in November 2012 and has now successfully produced over 700,000 barrels of oil with nine wells in production, and a tenth well, the Blackcomb 12-14 well, about to commence production.
 
All Arikaree Creek wells have been extensively logged and the Company has taken several hundred feet of core from the Mississippian age formations. Eight of the currently producing wells produce from the Mississippian Spergen zone.
 
The exception is the Big Sky 14-11 well, which commenced production in May 2014, and produces from an Upper Mississippian pay-zone above the Spergen. This small vertical section was hydraulically fractured and has produced at a steady rate of around 50 bbls/day.
 
The potential for additional reserves and production from this Upper Mississippian section has been clearly identified across the Arikaree Creek structure and Nighthawk is now implementing plans to develop and produce these reserves.
 
The initial step will be a short horizontal well, the Big Sky 6-11 well, with a horizontal leg of up to 1,200 feet. The well is planned to be hydraulically fractured and tested and it is expected that drilling will commence in the fourth quarter of 2014.
 
Nighthawk has requested the independent consultants preparing the new reserve report to evaluate the potential in this Upper Mississippian zone.
 
Following the success of the Blackcomb 12-14 well, further drilling of the southern lobe of Arikaree Creek is expected within the next few weeks.        
 
Development Plans – Snow King Area
 
The information gained from the Snow King 13-33 and 12-33 wells has confirmed the potential for substantial additional production from the development of the Snow King structure. The Company will shortly commence a new 3D seismic shoot over the structure to confirm and de-risk a number of additional drilling locations and a multi-well drilling program is expected to commence in the fourth quarter 2014. As previously reported, the recently drilled Snow King 12-33 well was structurally low, and the well has now been plugged and abandoned. 
 
Exploration   
 
The drilling rig is currently on location at the Jackson Hole 1-32 well. This well was originally drilled as an exploratory well in December 2013 and, in order to comply with regulatory requirements, additional work and logging is underway.
 
Nighthawk is continuing to explore a number of identified structures similar to both the Arikaree Creek and Snow King discoveries and additional 3D seismic is planned in the acreage around Arikaree Creek.
Financing
 
The Company has this morning separately announced a credit commitment from Commonwealth Bank of Australia to provide the Company with a US$100 million Reserve Based Loan.
 
Stephen Gutteridge, Chairman of Nighthawk, commented:
 
“One of the key features of the development of Arikaree Creek has been the consistent presence of oil-bearing zones above the main Spergen producing reservoir, both Pennsylvanian and Mississippian in age. Based on log and core analysis the Upper Mississippian zone shows excellent prospectivity and we have used the Big Sky 14-11 well to test the viability of hydraulically fracturing this zone for production. The results, 50 bbls/day from a small vertical section, are very good, and open up the possibility of good flow rates from a short horizontal well. We believe it is now time to test this approach, and if successful it will add significant production and reserves.”     
 
Chuck Wilson, Chief Operating Officer of Nighthawk, who has over 33 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.
 
– Ends-
 
Definitions
 
*Net revenue interest (NRI) – Nighthawk’s share of oil, gas, and associated hydrocarbons produced, saved, and marketed, after satisfaction of all royalties, overriding royalties, or other similar burdens on or measured by production of oil, gas, and associated hydrocarbons

0
0
1
62
356
Nighthawk Energy plc
2
1
417
14.0

Normal
0

false
false
false

EN-GB
JA
X-NONE

/* Style Definitions */
table.MsoNormalTable
{mso-style-name:”Table Normal”;
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-parent:””;
mso-padding-alt:0cm 5.4pt 0cm 5.4pt;
mso-para-margin:0cm;
mso-para-margin-bottom:.0001pt;
mso-pagination:widow-orphan;
font-size:10.0pt;
font-family:Calibri;}

Enquiries:

 

Copyright © 2014 OTC Markets. All Rights Reserved

The above news release has been provided by the above company via the OTC Disclosure and News Service. Issuers of news releases and not OTC Markets Group Inc. are solely responsible for the accuracy of such news releases.

Leave a Reply