Nighthawk Energy plc (“Nighthawk” Or “The Company”) Production And Drilling Update

LONDON, Oct. 24, 2014 /PRNewswire/ -- Nighthawk, the US focused oil development and production company (AIM: HAWK and OTCQX: NHEGY), announces an update on production and drilling 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 September 2014 was 1,804 barrels per day ("bbls/day") and is averaging 1,931 barrels per day through mid-October, despite the Big Sky 12-11, the Big Sky 14-11 and the Snowbird 9-15 wells each being off line for several days for maintenance
• New additional focus of capturing behind pipe production and reserves in completed wells and new drills already showing potential benefits in Salen 14-35 and Snowbird 16-15
• Identified a number of behind pipe opportunities that can be pursued in existing wells; these projects, which can generally be completed in a few days with nominal capital expenditure, may provide the highest capital efficiency projects available to the Company at the lowest levels of risk
• 3D seismic analysis being completed for the Snow King discovery and 3D seismic acquisition underway for the Salen area; these projects will set up business for later this year and into 2015

(Nighthawk has an average Net Revenue Interest* of approximately 81.5% in the gross oil production)

Production

The Blackcomb 12-14 and the Blackcomb 5-14 wells, completed in Mississippian age formations, at Arikaree Creek commenced production in September 2014 and had average 30 day gross production rates of 145 and 276 barrels per day respectively.

Production casing was run in the Salen 14-35 well and it was completed in a Pennsylvanian age formation at a depth of just over 7,200 feet.  The initial testing has yielded promising results and the well will be brought on production during October.

Completion operations were recently initiated on Snowbird 16-15, which was drilled to a depth of 8,400 feet, with this well expected to be in production later this month.

Drilling/Seismic

After drilling the Snowbird 16-15 well, the rig was moved on to the Blackcomb 3-14 development well at Arikaree Creek where it is currently drilling ahead.

The Company has completed the new 3D seismic shoot over the Snow King structure and is in the early stages of permitting a number of additional drilling locations.  We expect to begin drilling these locations towards the end of the fourth quarter 2014 or in early 2015. Additionally, we have initiated a new 3D seismic shoot in the Salen area and expect to have these results analyzed later this year.

Rick McCullough, Chairman of Nighthawk, commented:

"The new behind pipe program we are launching and our initial testing of this approach in the Salen 14-35 well has been very encouraging.  Basins like the Eastern Denver-Julesburg with stacked pay opportunities can substantially drive down the risk and cost of dry holes and substantially increase the returns for successful wells.  By way of example, the Salen well was originally completed in the Mississippian zone unsuccessfully but behind pipe pay was seen up hole in Pennsylvanian zones where it was subsequently completed.  The results from just one Pennsylvanian zone turned the well from a dry hole failure to a commercial well.  While this program will have the impact of temporarily reducing production for a day or two while new zone(s) in a particular well are completed, the ultimate impact could be a substantial increase in production, cash flows and eventually reserves with only nominal capital being expended.  In general, these projects can be completed at a cost of approximately $50,000 per zone and we expect to execute a number of them prior to year-end.

"Our Snow King structure and potentially the Salen area sets up our 2015 drilling program nicely and provides clear visibility on future production growth.  While we continue to de-risk the company's acreage and better define its upside, we must continue to pursue 3D and other science related projects to increase our knowledge base.  We hope to continue to provide greater clarity around our future plans in upcoming updates."

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.

Definitions and Glossary

*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.

Behind pipe – Behind pipe opportunities, production or reserves refers to potentially producible zones that have been penetrated by a well bore but are separated from the well bore by casing (pipe) and cement and hence cannot be produced without recompleting the well in such behind pipe zones. Once completed and proved to be productive, behind pipe opportunities can increase production, cash flow and reserves.

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SOURCE Nighthawk Energy plc