30 September 2015
NIGHTHAWK ENERGY PLC (”Nighthawk” or ”the Company”)
Unaudited
Interim Results for the six months ended 30 June 2015
Nighthawk, the US focused oil development and production company (AIM: HAWK and OTCQX: NHEGY), announces its unaudited interim results for the six months ended 30 June 2015 (”First half 2015”).
First Half 2015 Operational Highlights
* Oil sales volumes higher than six months ended 30 June 2014 (”First Half 2014”)
– First Half 2015 351,609 barrels of oil (First Half 2014: 345,558 barrels of oil)
– First Half 2015 1,950 bopd (First Half 2014: 1,909 bopd)
* Production maintained despite very limited new drilling activity through capital efficient production enhancement projects within existing wells
* Joint Development Agreements (”JDAs”) signed in January 2015
– Monarch and El Dorado JDAs materially increase Nighthawk’s Mississippian Spergen drilling inventory adding significant strategic value
– 3D seismic interpretation complete showing as many as 10 drillable features containing as many as 55 to 65 possible Mississippian Spergen drilling locations
* Key initiatives to set up business for reduced operational costs and increased margins
– Water gathering infrastructure at Arikaree Creek expected to deliver material operational cost savings from early 2016
– Oil marketing initiatives delivering US$3 to US$4 per barrel cost savings
* Secondary recovery waterflood at Arikaree Creek being pursued as potential 2016 project
– Potential to deliver highly significant reserves and borrowing base increase and associated production and operating cash flows increase by end 2016
* Recommenced drilling since period end with five well program which commenced in early September 2015
– Crested Butte 2-14 development well at Arikaree Creek followed by four commitment wells at Monarch JDA testing new Mississippian Spergen structures
– Drilling costs reduced by 30% from recent years
– Nighthawk’s conventional vertical wells potentially highly economic even at low oil prices
First Half 2015 Financial Highlights
* Group revenues for First Half 2015 materially lower than First Half 2014 due to low oil prices
– Revenues US$16.0 million (First Half 2014: US$25.4 million)
– Realised oil price US$44.32 per barrel (excluding hedging) (First Half 2014: US$91.73 per barrel (excluding hedging))
* Normalised EBITDA1 for First Half 2015 US$6.6 million or US$18.73 per barrel (First Half 2014: US$17.4 million or US$50.50 per barrel)
* Non-cash impairment charges recognized in exceptional administrative expenses of US$8.8 million (First Half 2014: US$3.2 million) relating to decisions taken to write off, plug and abandon four wells and to impair partially nine non-core wells on account of reduced expectations for reserves recovery and lower oil prices
* US$16.9 million invested in First Half 2015 (First Half 2014: US$18.8 million) in new wells drilled in late 2014 and early 2015 prior to rig release, additional completions and recompletions in wells, strategic lease acquisitions and renewals and 3D seismic at JDAs
* Cash balances of US$2.3 million at 30 June 2015
* US$10.0 million raised since period end in August 2015 via issuance of a zero coupon unsecured convertible loan note
Rick McCullough, Chairman of Nighthawk, said:
”The first half of the year was challenging with low oil prices and our lack of drilling. However, now with the recent capital raise, we are well positioned to execute our five well drilling program during the remainder of this year. We are particularly encouraged by the prospects of the Arikaree Creek water flood project that we expect to implement in 2016. We will file for Colorado regulatory approval for the waterflood in October and hope to complete the project by mid 2016. The project is expected to increase materially both our production and reserves out of the field.”
Notes:
1 Normalised EBITDA is operating profit adjusted for depreciation, amortisation, contribution from test revenue and exceptional administrative items. Refer to the Chief Financial Officer’s statement.
Enquiries:
Nighthawk Energy plc
Rick McCullough, Chairman + 1 303 407 9600
Richard Swindells, Chief Financial Officer +44 (0) 20 3582 1350
Westhouse Securities Limited +44 (0) 20 7601 6100
Alastair Stratton
Robert Finley
Canaccord Genuifty +44 (0) 20 7523 8000
Manuel Santiago
Henry Fitzgerald O´Connor
FTI Consulting +44 (0) 20 3727 1000
Ben Brewerton ben.brewerton@fticonsulting.com
Adam Cubbage adam.cubbage@fticonsulting com
read more; www.nighthawkenergy.com
