Nighthawk, the US focused shale oil development and production company, announces an update on production from its 100% controlled and operated Smoky Hill and Jolly Ranch projects in the Denver-Julesburg Basin, Colorado.
· Average gross oil production in March 2013 of 372 barrels per day ("bbls/day"), a record monthly production level for the projects
· Average gross oil production in Quarter 1 2013 of 313 bbls/day
· Production rate from Steamboat Hansen 8-10 well continues to increase with no water production
· John Craig 6-2 well brought back on-line on 22 March 2013 and currently producing 75-100 bbls/day with minimal water production
- At current prices and March 2013 production levels, monthly net revenues to Nighthawk of over US$750,000 comfortably exceed monthly expenditures, generating free cash for further investment
· Further increases in production are anticipated from the continuing work-over program and new drilling
Average gross production levels have continued to increase month-on-month driven by increased output from the Steamboat Hansen 8-10 well on the Smoky Hill project and successful results from the current work-over program on the Jolly Ranch project. March 2013 gross production averaged 372 bbls/day, a new monthly record for the projects. Average gross production for the first quarter of 2013 was 313 bbls/day, a 63% increase on the average for Q4 of 2012
Production from the Steamboat Hansen 8-10 well has continued to increase to over 270 bbls/day in March 2013 with zero water production and minimal downtime. The Company plans to drill two new wells on the Smoky Hill project in April to further develop this oilfield.
The current work-over program has successfully brought four wells back into production. The John Craig 6-2 well, which was shut-in due to high levels of water production, came back into production on 22 March 2013 and has settled down to a steady production rate of 75-100 bbls/day of oil with minimal water production.
Three older wells have also been brought back into production over the past three weeks and the Company anticipates further additions to production from the work-over program.
The Company is currently enjoying the benefit of strong prices for sales of oil and at current levels of price and March 2013 production levels net monthly revenue is over US$750,000. Monthly revenues are now comfortably in excess of monthly operating expenditures and overheads with surplus cash contributing to further development, drilling and leasing.
Stephen Gutteridge, Chairman of Nighthawk, commented:
"With growing production and increasing cash generation, Nighthawk is well positioned to invest in the next stage of growth and development. This will begin with the drilling of two new development wells close to the highly successful Steamboat Hansen 8-10 well, with drilling expected to commence in April 2013.
"The production gains from the current work-over program have confirmed the multiple stacked pay potential that we have across our acreage and diversified our production across a number of wells. We anticipate further increases in production through developing up-hole potential in existing well-bores, as well as significant additions from new drilling."
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