(HAWK.L) Nighthawk Energy PLC Buy/Sell

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Nov 3 (Reuters) - U.S.-focused Nighthawk Energy Plc said on Tuesday its Xenia gas pipeline, in which the company holds a 50 percent stake, was fully operational and flowing at more than 650,000 cubic feet of gas per day.
The energy company said it expected five further wells to be brought on stream shortly with an anticipated rise in flow rates. A further 22 wells have been permitted for future drilling, it said.
Xenia stands within the Revere waterflood project in the United States. Revere was formed by the consolidation of the Devon oilfield, Buchanan and Worden and Xenia projects.
The company also said it bought a 50 percent interest in the Bourbon County pipeline for $500,000 from Admiral Bay Resources, a gas production company focused on development of projects in the Cherokee Basin in southeastern Kansas.
"This acquisition allows the company to market its share of gas production at Revere, including Xenia, with reduced transportation costs," Nighthawk said in a statement.
The company's shares closed at 39 pence on Monday on the London Stock Exchange.

(Reporting by Tresa Sherin Morera in Bangalore; Editing by Vinu Pilakkott) Keywords: NIGHTHAWK/ (tresa.sherin@thomsonreuters.com; +91 80 4135 5800; Reuters Messaging: tresa.sherin@thomsonreuters.com)

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Xenia, which comprises 3,708 acres, is contained within the Revere waterflood project covering a total area of approximately 40,000 gross acres. Revere is the product of the consolidation of the Devon Oilfield (Nighthawk 80% working interest), Buchanan and Worden (Nighthawk 50% working interest) and Xenia (Nighthawk 50% working interest), all located on and near the State Border of Kansas and Missouri. Running Foxes Petroleum Inc., the operator, holds the remaining interests.

The recently constructed 26 kilometre, 5 MMCFGPD capacity Xenia gas pipeline, in which Nighthawk holds a 50% interest, is now fully operational after being completed on time and within budget. Gas is flowing into the Bourbon County pipeline and being sold into the Southern Star (a division of General Electric) Interstate transport line.

An initial eight wells have been brought on to production with an aggregate stabilised flow rate of over 650 MCFGPD. A further five previously drilled production wells are currently being connected and flow rates are expected to increase. Gas production is from the Riverton Coal and the Excello and Osage shales. A further 22 wells have been permitted for future drilling and permitting for additional wells is ongoing.

In addition, Nighthawk has acquired a 50% interest in the 39 kilometre Bourbon County pipeline from Admiral Bay Resources for a consideration of US$500,000. This acquisition allows the Company to market its share of gas production at Revere, including Xenia, with reduced transportation costs. The economics of this transaction indicate a payback on costs within 12 months at current gas prices. Approximately 30% of gas sales are hedged at a US$5 floor per MMBtu until December 2010. The acquisition also includes 50% of all related infrastructure such as measuring and telemetry equipment, boosters and compressors, amine units, separators and gas handling equipment.

As previously announced, Oilfield Production Consultants Limited ("OPC") is currently conducting a review of hydrocarbons in place at Xenia. The review is ongoing, however OPC has estimated the Stock Tank Oil Originally In Place ("STOOIP") for the Bartlesville sand. The P50 (most likely) calculation for the total 3,708 acres of the project is 6.85 MMBBL. The P10 (low case) and P90 (high case) figures are 1.49 MMBBL and 23.7 MMBBL gross respectively.

The gas in place remains to be calculated from the Riverton Coal, Excello shale and other formations. Whilst full results of this exercise are not expected until the end of Q4 2009, OPC has indicated that this figure will be significant.

With the addition of the oil in place at Xenia, the total current independently calculated P50 STOOIP at the Revere project stands at 217 million barrels gross and excludes any gas potential. As development continues, this figure is expected to increase markedly.

Tim Heeley B.Eng (Hons) a member of the Society of Petroleum Engineers, Fellow of the Geological Society of London and Chartered Energy Engineer, who is Commercial Director of Nighthawk and has over 12 years of experience in the hydrocarbons industry has approved the technical information contained in this announcement.

Enquiries:

Nighthawk Energy plc
David Bramhill, Managing 01271 882160
Director 020 7887 1454
Tim Heeley, Commercial 07956 525433

Director

Hanson Westhouse Limited 020 7601 6100
Tim Feather tim.feather@hansonwesthouse.com
Matthew Johnson matthew.johnson@hansonwesthouse.com
Bishopsgate Communications 020 7562 3395
Limited nick@bishopsgatecommunications.com

Nick Rome

Financial Dynamics 020 7831 3113
Ben Brewerton ben.brewerton@fd.com
Ed Westropp edward.westropp@fd.com

Glossary

"Btu" a British thermal unit, equal to about 1.06 kilojoules.

"hydrocarbon" a compound containing only the elements hydrogen and carbon
which may exist as a solid, liquid or a gas. The term is
mainly used in a catch-all sense for oil, gas and condensate.
"MCF" thousand cubic feet of gas
"MCFGPD" thousand cubic feet of gas per day
"MMBBL" million barrels of oil
"MMBtu" million British thermal units
"MMCFGPD" million cubic feet of gas per day
"P10" indicates at least a 10% probability that the quantity of oil
in place will equal or exceed the estimate
"P50" indicates at least a 50% probability that the quantity of oil
in place will equal or exceed the estimate
"P90" indicates at least a 90% probability that the quantity of oil
in place will equal or exceed the estimate
"shale" fine grained sedimentary rock whose original constituents were
clay materials or muds
"STOOIP" Stock Tank Oil Originally In Place

This information is provided by RNS The company news service from the London Stock Exchange

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Oct 7 (Reuters) - Nighthawk Energy Plc reported a narrower full-year operating loss, aided by a surge in revenue, and said its strong balance sheet and a portfolio of assets will continue to add "tremendous value" into 2010 and beyond.
"Nighthawk is in a better financial position than at any time in its history and funds are in place for the development of its core projects for at least the next 12 months," the company said, adding that it remains debt free.
The U.S.-focused energy company reported an operating loss of $2 million for the year ended June 30, compared with $3.5 million year ago. Revenue rose to $497,876 from $138,998 a year ago.
The company also reported a 60 percent rise in non-current assets to $75.2 million.
Shares of the company closed at 35.5 pence on Tuesday on the London Stock Exchange.

(Reporting by Ramkumar in Bangalore; Editing by Himani Sarkar)

(ram.kumar@thomsonreuters.com +91 80 41355800; Reuters Messaging: ram.kumar.thomsonreuters.com@reuters.net)) Keywords: NIGHTHAWKENERGY/

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Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.