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Company Nighthawk Energy plc
TIDM HAWK
Headline

Farm-Out Agreement

Released 07:00 29-Oct-2013
Number 5862R07

RNS Number : 5862R
Nighthawk Energy plc
29 October 2013
 



 

 

29 October 2013

 

NIGHTHAWK ENERGY PLC

("Nighthawk" or "the Company")

 

Farm-Out Agreement

 

Development of unconventional Pennsylvanian potential at Jolly Ranch Project

 

Nighthawk, the US focused oil development and production company (AIM: HAWK and OTCQX: NHEGY), announces that it has entered into a farm-out agreement with an undisclosed private, Denver-based oil and gas company ("Farmee") covering 4,572 acres of its 100% owned and operated Jolly Ranch project in the Denver-Julesburg Basin, Colorado.

 

Highlights of the Agreement

 

Farm-out area covers 4,572 acres (the "Farm-out Acreage"), currently 100% Nighthawk working interest, in the immediate vicinity of Limon, approximately fifteen miles south of Nighthawk's Arikaree Creek oil-field

 

Farmee to earn a 50% working interest (40% net revenue interest) by drilling as operator three vertical wells on the Farm-out Acreage

 

Farmee to carry all costs for Nighthawk's 50% working interest through to the tanks

 

Wells will be drilled with primary targets in the unconventional Pennsylvanian Cherokee and Marmaton horizons

 

Drilling to commence no later than 30 April 2014

 

Farmee is producing from the unconventional Pennsylvanian Cherokee and Marmaton horizons on adjacent acreage

 

Well locations will be mutually agreed and will benefit from Farmee's recent 3D seismic survey covering the Farm-out Acreage and adjacent Farmee licences

 

Nighthawk and the Farmee will exchange 3D seismic information 

 

Additional Information

 

Both Farmee and Nighthawk have acreage positions in the immediate vicinity of Limon, on the northernmost part of Nighthawk's Jolly Ranch project, around fifteen miles south of Nighthawk's producing Arikaree Creek oil-field. Farmee recently conducted a 30 square mile 3D seismic survey and operates two wells on its acreage with production from both the Cherokee and Marmaton horizons. Nighthawk's nearest well is the John Craig 6-2 well, about three miles south of the 3D survey area, which has produced from both the Cherokee and Marmaton horizons.

 

The area covered by the farm-out agreement will be all of Nighthawk's leases within the area of Farmee's 3D seismic survey, comprising 4,572 net acres.

 

Under the terms of the agreement, Farmee is planning to drill three vertical wells on the Farm-out Acreage and will carry all costs for Nighthawk's 50% working interest through to the tanks. On completion of the three well program Farmee will earn a 50% working interest (40% net revenue interest) in the Farm-out Acreage.

 

The wells will be drilled on mutually agreed locations and will primarily target the Pennsylvanian Cherokee and Marmaton horizons although other potential pay zones will be monitored. Drilling is to commence no later than 30 April 2014 and Farmee will be the operator under an agreed Joint Operating Agreement. Any additional wells above the three well commitment will be on a 50/50 basis. 

 

In the event that Farmee decides to drill only one or two wells then the earn-in shall be limited to a 50% working interest in either the well-bore or the section on which the well is located, depending on the location of the well.

 

Farmee and Nighthawk have agreed to an exchange of 3D seismic information as part of the arrangement. 

 

Stephen Gutteridge, Chairman of Nighthawk, commented:

 

"This is an attractive arrangement for Nighthawk. It is a step forward in the commercial exploitation of the extensive unconventional Pennsylvanian opportunities across our acreage, with a partner already familiar with the geology and operational environment. This allows us to focus our own financial and operational resources on additional Pennsylvanian and Mississippian targets, opening up a larger proportion of our acreage to potential development."   

 

 

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-

 

Enquiries:

Nighthawk Energy plc

Stephen Gutteridge, Chairman

Richard Swindells, Chief Financial Officer

 

 

020 3582 1350

 

Westhouse Securities Limited

Richard Baty

Ian Napier

020 7601 6100

richard.baty@westhousesecurities.com

ian.napier@westhousesecurities.com

FTI Consulting

Ben Brewerton

Ed Westropp

 

 

020 7831 3113

ben.brewerton@fticonsulting.com

edward.westropp@fticonsulting.com

 

 

 

 

 

 

 

 

  

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Farm-Out Agreement - RNS