Nighthawk, the US focused oil development and production company (AIM: HAWK and OTCQX: NHEGY), announces an update at its project in the Denver-Julesburg Basin, Colorado.
Highlights
- Production maintained through Behind Pipe and remedial treatment program in March and April 2015
- Average gross production YTD of 2,002 bopd (2014: 1,935 bopd)
- Behind Pipe and remedial treatment program to continue over May and June 2015
- Completed initial shooting of 3D seismic for the two new Joint Ventures
- Hedges at average $67.67 per barrel until April 2016 over volumes equivalent to more than 55% of 2014 net production
- New crude oil marketing arrangements providing wider access to markets
- Borrowing base update
Production/Operations
As reported in mid-February 2015, Nighthawk’s behind pipe and work-over operations were delayed throughout the winter due to unusually poor weather conditions. There was a further bout of very heavy snowfall in late February 2015, which extended delays in the field. However, progress has been made in March and April 2015 with these operations. Throughout January, February and early March 2015, Nighthawk experienced an inordinate amount of mechanical failures on 10 wells (14 separate projects) and rig activity was redirected to maintain production. This further delayed the behind pipe program and remedial solvent treatment plans. These programs have now been reinstated and are progressing well as discussed below, however production did not reach the anticipated 2,500 bopd gross levels during the first quarter.
Since releasing the drilling rig in January 2015, Nighthawk has been maintaining production by low cost behind pipe completions in the Pennsylvanian (Marmaton) section and co-mingling with Mississippian Spergen production. In addition, remedial solvent treatments have been applied in some of the existing Mississippian Spergen perforated zones improving the well performance. Over time, the perforations in the Mississippian Spergen in some wells may become plugged and a solvent treatment is required to clean out the perforations and re-establish optimal production. In one well, additional perforations were added to the lower Mississippian Spergen section and the results yielded more than 100 bopd gross incremental production after the procedure. Another well was treated with a proprietary solvent treatment that yielded incremental production of approximately 70 bopd. Nighthawk plans to continue to implement solvent treatments in the Mississippian Spergen in the Arikaree Creek field and two of the wells located in the Snow King area. The solvent treatment design is a proprietary fluid and the vendor is currently scaling up their operations with the requisite equipment and products to facilitate a broader roll out of the operational procedure across our Mississippian Spergen wells in the near future. Additional pay zones in the Marmaton have been identified in several existing wells, which will be completed and co-mingled in the next couple of months.
Gross and net* production for the first four months of 2015 is summarised below.
2015 Monthly Daily average
Bbls Gross Net Gross Net
January 63,605 52,183 2,052 1,683
February 55,979 45,843 1,999 1,637
March 59,376 48,684 1,915 1,570
April (estimate) 61,300 49,984 2,044 1,666
*Net production is based upon Nighthawk´s Net Revenue Interest of approximately 82 %.
