Nighthawk, the US focused oil development and production company (AIM: HAWK and OTCQX: NHEGY), announces an update to current production levels, operations and existing litigation matters.

Production Update

The Company’s production continues to remain strong through the first seven months of 2016. The effects of a natural water drive in the Arikaree Creek field, along with the efforts from the production operations team, have kept production relatively flat as compared to last year for the first seven months.

Gross and net* production, in barrels, for the first seven months of 2016 is summarised below.

 

  Monthly   Daily Average
  Gross   Net   Gross   Net
  2016 2015   2016 2015   2016 2015   2016 2015
                       
January 43,915 63,605   36,031 52,183   1,417 2,052   1,162 1,683
February 40,809 55,979   33,444 45,843   1,407 1,999   1,153 1,637
March 40,720 59,382   33,392 48,688   1,314 1,915   1,078 1,570
April 40,704 59,919   33,374 49,136   1,357 1,997   1,113 1,638
May

June

July

40,358

40,677

42,846

59,406

54,446

56,119

  33,093

33,355

35,134

48,710

44,646

46,018

  1,302

1,356

1,382

1,916

1,815

1,810

  1,068

1,112

1,133

1,571

1,488

1,484

 

 

*Net production is based upon Nighthawk’s Net Revenue Interest of approximately 82%

Operations Update

The Arikaree Creek Water Pilot Project was finally approved in early June 2016. The Company has commenced working on the Pilot with the final engineering design phase now completed and the equipment procurement phase beginning. Construction and installation of the water gathering lines and the water injection lines should commence in the second half of September. The water injection and the polymer facilities are currently being manufactured and are anticipated to be delivered, installed, tested, and become operational in late October.

Nighthawk has been negotiating with Cascade (Denham) in regards to the last two commitment wells located within the Monarch Joint Development Area. Nighthawk believes the parties may soon finalize negotiations around a proposed settlement. Once this is reached, Nighthawk will announce the results in a future news release.

Litigation Matters

As previously disclosed, the ongoing litigation between Running Foxes Petroleum, as plaintiff, and the Company, is the final stages of being settled. There is currently only one remaining outstanding claim and the Company believes that the allegations contained in the remaining complaint are baseless and groundless actions, and will vigorously defend against the remaining complaint. Based on participation in the pre hearing conference and related court filings, the Company has recently been approached about the two parties trying to negotiate a settlement prior to the scheduled court date of September 20, 2016.

In addition, Nighthawk Production has recently filed a formal complaint against Running Foxes Petroleum and American Patriot Oil and Gas Limited, an Australian company listed on the ASX, for a seismic disclosure breach in connection with a Joint Venture the two companies have announced involving acreage near us.

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.


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