(HAWK.L) Nighthawk Energy PLC Buy/Sell

STOCKS NEWS Reuters

Results diary
Europe Real-time Equity News

UK Stocks on the move
UK smallcaps UK smallcaps news

12:58GMT 23Feb2010-Nighthawk falls on production speculation

Shares in Nighthawk Energy Plc fall as much as 17 percent after the energy company reported production levels at 150 barrels per day from 11 wells, which is lower than its peers say analysts.
The company says however it expects output from the Jolly Ranch project in Colorado to rise to 1,000 barrels in 2010.
Richard Nolan of Daniel Stewart says the initial reading of 13 to 14 barrels per well, is not a good number, compared with other companies.
"There is uncertainty about whether Nighthawk would lead production from the current 11 wells or drill new ones to reach its expected target of 1,000 barrels per day," Nolan adds.
For more double click on

Reuters messaging rm://juhi.arora.reuters.com@reuters.net
12:05GMT 23Feb2010-Drax weak after results

Shares in Drax Group shed 4 percent after the power station operator reports a steep fall in full-year profit driven by low power prices and demand.
Drax, whose coal-fired power station in Selby, North Yorkshire typically supplies about 7 percent of Britain's electricity, posts a 64 percent drop in 2009 pretax profit to 158 million pounds ($244 million).
Evolution says in a note that Drax's 2009 EBITDA of 355 million pounds was above its forecast of 350 million pounds and the consensus estimate of 346 million pounds.
The broker says the additional EBITDA "is likely to have come from slightly higher buybacks at weak spreads, reducing the group's output but boosting profit."
Evolution notes that while Drax has very good hedged positions for spreads in 2010 and 2011, it feels fundamentals for the firm are weak with "forward dark green spreads" (coal-fired generated electricity prices) very low due to low gas prices, and high coal prices caused by strong Asian demand.
Evolution says there is more downside risk to Drax's share price than upside, and it retains a "neutral" stance on the stock with a 415 pence price target.
For more on Drax's results, double click on

Reuters Messaging rm://jon.hopkins.reuters.com@reuters.net
12:04GMT 23Feb2010-UK small caps fall 0.3 pct midday

The FTSE Small Cap index falls 0.3 percent in midday trade, while the midcaps drop 0.4 percent and the blue chips are 0.1 percent weaker.
Spice tops the small cap fallers list, shedding almost 21 percent, after the utility support services group says it expects its profit before tax to miss its expectations in 2010 after severe weather in Britain hits its distribution businesses.
Elementis, meanwhile, is the top small cap riser, jumping more than 11 percent after the chemicals maker reports full-year results, with Brewin Dolphin repeating its "buy" rating on the stock.

Reuters Messaging rm://tricia.wright1.reuters.com@reuters.net
11:17GMT 23Feb2010-Misys rises; RBS upgrades

Shares in Misys rise 1.9 percent as RBS lifts its rating on the IT firm to "buy" from "hold", saying it expects positive newsflow over the coming weeks.
"(This) newsflow should highlight the sizeable opportunity for the BankFusion product and confirm accelerating growth across the group," RBS says in a note.
"Against this backdrop, we think the valuation discount will start to narrow," says the broker, which lifts its price target to 255 pence from 234.
RBS says that on March 3, Misys is holding an analyst and investor day to outline the opportunities for BankFusion, the group's new next-generation product.
It notes that while this product has only six customers so far, these include the group's first competitive win in the UNIX market in seven years.

Reuters Messaging rm://tricia.wright1.reuters.com@reuters.net
10:49GMT 23Feb2010-Mondi up after results

Shares in South African paper maker Mondi gain 5.6 percent in London after the firm reports in-line full year results and issues a confident outlook statetement.
Mondi posts a 44 percent decline in full-year headline earnings per share to 11.4 euro, due to lower sales and prices, but sees some price recovery in the European packaging grades, which coupled with the group's restructuring last year has left the company poised to perform well in the year ahead.
Citigroup says in a note that Mondi's underlying full-year EBIT of 294 million euro was 10 percent ahead of consensus, and underlying EPS of 18.7 euro was in line.
The broker also notes that the 251 million euro in cost savings delivered in full-year 2009 beat Mondi's target of 180 million euro for the year.
"All in, Mondi reported another solid set of results despite a tough year in paper markets," Citigroup says, repeating its "buy " rating and 410 pence/50 rand target prices on the stock.
Mondi shares in Johannesburg are up 3.9 percent.
For more on Mondi's results, double click on

Reuters Messaging rm://jon.hopkins.reuters.com@reuters.net
10:47GMT 23Feb2010-Kier rises ahead of first-half results

Shares in British construction company Kier Group rise 3.6 percent as Panmure Gordon repeats its "buy" rating on the firm ahead of its first-half results, due on Wednesday.
"With good exposure to residential markets plus its well positioned construction and support services operations, we are positive on Kier," says the broker in a note.
Panmure says Kier trades at a discount to the sector average on 8.7 times calendar 2010 price earnings, compared to 10.3 times for the sector, with a dividend yield of 5.8 percent.
"We are positive on the construction sector as we believe a lot of the current market uncertainty is already factored in to share prices," it adds.

Reuters Messaging rm://david.brett.reuters.com@reuters.net
09:31GMT 23Feb2010-SIG up; read across from Morgan Sindall

Shares in insulation and roofing group SIG rise 2.6 percent as Davy repeats its "outperform" stance, citing a read across from the performance of Morgan Sindall's office interiors division, Fit Out.
In its full-year results, construction group Morgan Sindall says Fit Out's order book at the start of 2010 was up 38 percent, to 171 million pounds at the same stage last year.
Davy says SIG's interior's division accounted for 26.5 percent of revenues in 2008 but suffered a 17 percent year-on-year decline in first-half 2009.
"Evidence of a more robust commercial interiors market in the UK is clearly good news from a SIG perspective," says the broker in a note.
SIG is due to report 2009 results on March 18.

Reuters Messaging rm://david.brett.reuters.com@reuters.net
09:25GMT 23Feb2010-Elementis jumps after results

Shares in Elementis jump more than 11 percent after the chemicals maker reports full-year results, with Brewin Dolphin repeating its "buy" rating on the stock.
Elementis posts a 62 percent drop in full-year adjusted pretax profit, but maintains its dividend and says 2010 trading began on a positive note as customers started restocking.
"Elementis' full-year results are slightly ahead of our expectations, confirming that the stabilisation in end markets continued as expected through to the end of the year," Brewin Dolphin says in a note.
"We continue to rate Elementis as one of our top picks in the sector for its high gearing to a global economic recovery and increasing exposure to the important Chinese market," it says.

Reuters Messaging rm://tricia.wright1.reuters.com@reuters.net
09:10GMT 23Feb2010-Reckitt weak on OFT news; Panmure cuts

Shares in Reckitt Benckiser shed 0.7 percent, bucking a firmer FTSE 100 trend after Britain's Office of Fair Trade (OFT) accused the consumer goods group of abusing its dominant market position in the supply of heartburn medicines.
The stock is also impacted by a downgrade in rating from Panmure Gordon to "hold" from "buy" on valuation grounds.
The OFT says Reckitt had delisted its Gaviscon Original Liquid from the NHS prescription database meaning that when doctors searched for the product under its brand name the system failed to supply the potentially cheaper generic name.
Panmure Gordon, in its downgrade note, says while the OFT issue "will clearly take some time to resolve, we do not see it as being particularly material to the investment case."
However, the broker says, following recent impressive fourth-quarter results from Reckitt, its shares have rallied strongly.
Panmure says while it is raising its price target from Reckitt to 3,650 pence, up from 3,380 pence, this only points to 4.9 percent upside potential in the stock and as such it moves its rating down to "hold".
"We remain very confident in the outlook for Reckitt, but look for a lower level to Buy," the broker adds.
For more on the OFT allegations, double click on

Reuters Messaging rm://jon.hopkins.reuters.com@reuters.net
09:03GMT 23Feb2010-Croda rises on solid 2009, confident outlook

Shares in Croda International rise as much as 5.7 percent to an all-time high of 889.5 pence after the chemicals company meets expectations with a 10.5 percent rise in full-year adjusted pretax profit, reflecting strong demand from the cosmetics and personal care sectors, and says it is confident about 2010.
"We expect the solid results and upbeat outlook statement to "We expect the solid results and upbeat outlook statement to boost sentiment to Croda's shares today," say analysts at Citi, who rate the shares a "hold". "That said, we see Croda's share price as roughly correctly valuing the company's prospects."
For more, double-click on

Reuters Messaging rm://paul.sandle.reuters.com@reuters.net
08:49GMT 23Feb2010-Luminar rises; CEO stepping down

Shares in Luminar gain 2.3 percent after Britain's biggest nightclub operator announces its Chief Executive and founder Stephen Thomas will step down from the board at the end of February, to be replaced by Simon Douglas.
"This appointment could be the first in a number of steps forward for the group and as such we feel the shares are likely to react positively today," says Altium Securities in a note.

The broker says Douglas, the former chief executive of music retailer Zavvi, has "significant experience in managing multi-site, consumer focused, branded entertainment businesses".
Luminar has issued three profit warnings in the last year.
"Whilst concerns surrounding headroom and the balance sheet remain, it is quite clear that a market recovery is required before Luminar can bounce back," Altium says.
For more double click on

Reuters Messaging rm://david.brett.reuters.com@reuters.net
08:46GMT 23Feb2010-Spice drops, says to miss profit target

Shares in Spice fall 12.7 percent after the utility support services group says it expects its profit before tax to miss its expectations in 2010 after severe weather in Britain hits its distribution businesses.
Altium Securities cuts its rating on the stock to "sell" from "buy" and lowers its target price to 48 pence from 70.
"A negative update revealing admittedly short-term weakness in the Electricity and Water businesses as a result of the weather, and also that Gas continues to make a loss," the broker says in a note.
Altium raises its net debt forecast to 120 million pounds from 110.4 million, "taking into account today's downgrade and the exceptional costs announced today."
The broker's earnings per share estimate for 2010 moves to 6.7 pence from 7.3, and for 2011, to 7.3 pence from 8.1.
For more double click on

Reuters Messaging rm://tricia.wright1.reuters.com@reuters.net
08:20GMT 23Feb2010-UK small caps flat early

The FTSE Small Cap index is flat in early trade, underperforming both the blue chips and the midcaps, which rise 0.7 and 0.5 percent, respectively.
Pendragon is a good gainer, adding 5 percent, after the car dealer posts a return to annual profit, boosted by the government's "cash for bangers" scrappage scheme, good cost control and a better used car performance.
Spice, meanwhile, tops the small cap fallers list, shedding almost 13 percent, after the utility support services group says it expects its profit before tax to miss its expectations in 2010 after severe weather in Britain hits its distribution businesses.

Reuters Messaging rm://tricia.wright1.reuters.com@reuters.net
08:08GMT 23Feb2010-Wolseley jumps after surprise trading update

Shares in Wolseley leap 8.2 percent higher, easily topping the FTSE 100 leaders' board, after the building materials supplier issues a surprise, upbeat trading statement, prompting BofA Merrill Lynch to raise its estimates.
Wolseley says its full-year trading profit before exceptional items would beat forecasts if current trends continued, mainly due to better than expected cost efficiencies.
In a note, Merrill ups its full-year 2010 EBITA forecast for Wolseley by 9 percent to 355 million pounds, and raises its "clean" EPS estimate by 14 percent to 59.1 pence, up from 51.9 pence previously.
The broker says it is not making any substantial changes to its full-year 2011 forecasts, which remain around 25 percent ahead of consensus.
"The key point from this statement is that we believe the market has underestimated the benefits of cost-cutting, especially if volume growth returns later in the year, as we forecast," Merrill says, repeating its "buy" rating and 2,100 pence target price on Wolseley.
For more double click on

Reuters Messaging rm://jon.hopkins.reuters.com@reuters.net

Keywords: MARKETS UK STOCKSNEWS/ =3
Shares in Nighthawk Energy fall 11.7 percent after an update from the energy company shows production levels of 150 barrels per day from 11 wells, which is lower than its peers, say analysts.
The company says, however, it expects output from the Jolly Ranch project in Colorado to rise to 1,000 barrels in 2010.
Richard Nolan of Daniel Stewart says the initial reading of 13 to 14 barrels per well, is not a good number, compared with other companies.
"There is uncertainty about whether Nighthawk would lead production from the current 11 wells or drill new ones to reach its expected target of 1,000 barrels per day," Nolan adds.
For more double click on

Reuters messaging rm://juhi.arora.reuters.com@reuters.net

COPYRIGHT

Copyright Thomson Reuters 2010. 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.

STOCKS NEWS Reuters

Results diary
Europe Real-time Equity News

UK Stocks on the move
UK smallcaps UK smallcaps news

12:58GMT 23Feb2010-Nighthawk falls on production speculation

Shares in Nighthawk Energy Plc fall as much as 17 percent after the energy company reported production levels at 150 barrels per day from 11 wells, which is lower than its peers say analysts.
The company says however it expects output from the Jolly Ranch project in Colorado to rise to 1,000 barrels in 2010.
Richard Nolan of Daniel Stewart says the initial reading of 13 to 14 barrels per well, is not a good number, compared with other companies.
"There is uncertainty about whether Nighthawk would lead production from the current 11 wells or drill new ones to reach its expected target of 1,000 barrels per day," Nolan adds.
For more double click on

Reuters messaging rm://juhi.arora.reuters.com@reuters.net
12:05GMT 23Feb2010-Drax weak after results

Shares in Drax Group shed 4 percent after the power station operator reports a steep fall in full-year profit driven by low power prices and demand.
Drax, whose coal-fired power station in Selby, North Yorkshire typically supplies about 7 percent of Britain's electricity, posts a 64 percent drop in 2009 pretax profit to 158 million pounds ($244 million).
Evolution says in a note that Drax's 2009 EBITDA of 355 million pounds was above its forecast of 350 million pounds and the consensus estimate of 346 million pounds.
The broker says the additional EBITDA "is likely to have come from slightly higher buybacks at weak spreads, reducing the group's output but boosting profit."
Evolution notes that while Drax has very good hedged positions for spreads in 2010 and 2011, it feels fundamentals for the firm are weak with "forward dark green spreads" (coal-fired generated electricity prices) very low due to low gas prices, and high coal prices caused by strong Asian demand.
Evolution says there is more downside risk to Drax's share price than upside, and it retains a "neutral" stance on the stock with a 415 pence price target.
For more on Drax's results, double click on

Reuters Messaging rm://jon.hopkins.reuters.com@reuters.net
12:04GMT 23Feb2010-UK small caps fall 0.3 pct midday

The FTSE Small Cap index falls 0.3 percent in midday trade, while the midcaps drop 0.4 percent and the blue chips are 0.1 percent weaker.
Spice tops the small cap fallers list, shedding almost 21 percent, after the utility support services group says it expects its profit before tax to miss its expectations in 2010 after severe weather in Britain hits its distribution businesses.
Elementis, meanwhile, is the top small cap riser, jumping more than 11 percent after the chemicals maker reports full-year results, with Brewin Dolphin repeating its "buy" rating on the stock.

Reuters Messaging rm://tricia.wright1.reuters.com@reuters.net
11:17GMT 23Feb2010-Misys rises; RBS upgrades

Shares in Misys rise 1.9 percent as RBS lifts its rating on the IT firm to "buy" from "hold", saying it expects positive newsflow over the coming weeks.
"(This) newsflow should highlight the sizeable opportunity for the BankFusion product and confirm accelerating growth across the group," RBS says in a note.
"Against this backdrop, we think the valuation discount will start to narrow," says the broker, which lifts its price target to 255 pence from 234.
RBS says that on March 3, Misys is holding an analyst and investor day to outline the opportunities for BankFusion, the group's new next-generation product.
It notes that while this product has only six customers so far, these include the group's first competitive win in the UNIX market in seven years.

Reuters Messaging rm://tricia.wright1.reuters.com@reuters.net
10:49GMT 23Feb2010-Mondi up after results

Shares in South African paper maker Mondi gain 5.6 percent in London after the firm reports in-line full year results and issues a confident outlook statetement.
Mondi posts a 44 percent decline in full-year headline earnings per share to 11.4 euro, due to lower sales and prices, but sees some price recovery in the European packaging grades, which coupled with the group's restructuring last year has left the company poised to perform well in the year ahead.
Citigroup says in a note that Mondi's underlying full-year EBIT of 294 million euro was 10 percent ahead of consensus, and underlying EPS of 18.7 euro was in line.
The broker also notes that the 251 million euro in cost savings delivered in full-year 2009 beat Mondi's target of 180 million euro for the year.
"All in, Mondi reported another solid set of results despite a tough year in paper markets," Citigroup says, repeating its "buy " rating and 410 pence/50 rand target prices on the stock.
Mondi shares in Johannesburg are up 3.9 percent.
For more on Mondi's results, double click on

Reuters Messaging rm://jon.hopkins.reuters.com@reuters.net

COPYRIGHT

Copyright Thomson Reuters 2010. 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.

RNS Number : 5135H Nighthawk Energy plc 23 February 2010

NIGHTHAWK ENERGY PLC

("Nighthawk" or "the Company")

Jolly Ranch Update

Nighthawk, the US focused hydrocarbon and production company (Tickers: AIM: HAWK and OTCQX: NHEGY), announces an update in respect of the Jolly Ranch project ("Jolly Ranch") in which it holds a 50% working interest with Running Foxes Petroleum Inc., the operator, holding the remaining 50% interest.

Jolly Ranch comprises both conventional and non-conventional oil producing horizons targeting primarily Pennsylvanian age formations, namely the Marmaton (conventional) and Cherokee and Atoka (non-conventional) shales.

The project covers approximately 370,000 gross acres located in Lincoln, Elbert and Washington Counties, Colorado. In July 2009 Schlumberger Data & Consulting Services ("Schlumberger") reported that the P50, or most likely, oil in place in the three primary formations across approximately two-thirds of the acreage is 1.462 billion barrels gross. In addition, the assessment stated that there is reasonable certainty of reservoir and source rock continuity over the project area and surrounding acreage.

Highlights

· Jolly Ranch is a potentially world class shale oil project located in the southern part of the Denver Basin

· 13 vertical development wells targeting the Cherokee and Atoka shales (including one well which was sidetracked horizontally), three shallower wells and two salt water disposal wells have been drilled on the project. In addition, an existing production well completed in an Atoka sandstone reservoir has been acquired from the State of Colorado

· The project is producing oil from the Atoka and Cherokee shales at depths of 6,500 to 7,500 feet
· The operator anticipates an upward trend in production from current average test production levels of approximately 150 barrels of oil per day to an initial target of 1,000 barrels gross per day during 2010

· The operator has completed three new 3-D seismic surveys that are presently being interpreted. Re-evaluation of the previous 3-D seismic surveys has indicated a number of conventional targets, basement faulting and areas of potential sweet spots

· Schlumberger has been engaged to complete an extended modelling and reservoir simulation to allow development of production and recovery profiles, with the results to be used as the basis of an independent reserves assessment

· Companies that are actively leasing in the area are Unit Corporation, EOG Resources, Newfield Exploration, Sundance Energy, Wiepking-Fullerton Energy and McElvain Oil and Gas

· As at 22 February 2010 Nighthawk had US$18.3 million in cash and liquid investments and remains debt free

David Bramhill, Managing Director of Nighthawk, said:

"Nighthawk's primary objective is to build value around Jolly Ranch, a sizeable low risk, high reward asset. We are focused on increasing production levels, in conjunction with proving up the extent of the asset in order to generate maximum value. We believe that Jolly Ranch can be established as a high value shale play similar to prolific shale projects such as the Bakken, Barnet and others throughout the US Mid-continent. These shale plays can command exceptional exit prices once producibility and economic parameters are exhibited."

Nighthawk Energy plc
David Bramhill, Managing 01271 882160
Director 07956 525433
Tim Heeley, Commercial 020 7887 1453

Director

Westhouse Securities Limited 020 7601 6100
Tim Feather tim.feather@westhousesecurities.com
Matthew Johnson matthew.johnson@westhousesecurities.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

Tim Heeley B.Eng (Hons) a member of the Society of Petroleum Engineers, Fellow of the Geological Society of London and a Chartered Energy Engineer, who is Commercial Director of Nighthawk and has over 13 years of experience in the hydrocarbons industry, has approved the technical information contained in this announcement.

Overview of Jolly Ranch Project

Strategic Objective

Nighthawk's strategic objective is to create value for shareholders by building a scalable hydrocarbon company focused on low risk, high reward assets in a politically and fiscally stable environment.

The directors believe that this can be achieved through proving up Jolly Ranch to a level that establishes the project as a high value shale play similar to prolific US shale projects such as the Barnet and, particularly, the Bakken, a major US shale oil play. Prices from recent shale oil M&A transactions have averaged in excess of US$5,000 per acre.

The directors also recognise that the demonstration of sustained production is a critical element in the proving up process, not only as a source of revenue but principally in building the value of the acreage.

Progress to Date

Over the past 18 months Nighthawk has invested over US$30 million in the Jolly Ranch project. These funds have been utilised in land acquisition, drilling and completing wells, the construction of production, storage and off-take infrastructure, seismic acquisition and geological and geophysical assessments.

The wells are being developed in accordance with current practice for optimising production from the Cherokee and Atoka shale formations. To date, 13 wells have been drilled targeting these formations, as well as two wells which are being utilised as salt-water disposal wells, Craig 6-4 SWD and Jolly Ranch 10-1 SWD. All 13 wells have been cased as producers and 11 have seen completion operations, all of which have flowed oil under test conditions. As at 31 December 2009, the cumulative test production from the 11 wells was 21,238 barrels gross. The two most recently drilled wells await completion. The quality of the oil is good ranging from 32 to 41 API gravity as independently verified by Weatherford Laboratories.

The test work has been, and continues to be, focused on the refinement of completion techniques critical for understanding the optimum recovery profile for each individual formation which contain multiple interbedded shale horizons. Combined mean net pay thicknesses in the Cherokee and Atoka formations are 20 feet and 38 feet respectively.

Well testing involves a combination of perforation, fraccing, acidising and swabbing procedures. Initial test production has delivered good flow rates from a number of wells providing optimism for sustained production in the future. Although short term initial production tests may not be indicative of future producing rates, each production test yields valuable information in respect of the producibility of the zones and have so far reinforced the lateral extent of the oil in place. Following this extensive test work, Nighthawk anticipates an upward trend in production from average test production levels of approximately 150 barrels of oil per day to 1,000 barrels per day during 2010.

Modelling and Reservoir Simulation

Schlumberger Data and Consulting Services has now been engaged to compile an extended modelling and reservoir simulation project on behalf of Nighthawk utilising the extensive drilling and development activities undertaken over the nine months since the last report.

A detailed reservoir simulation model for the Jolly Ranch area will be generated which can be used for the development of oil production profiles and EUR (estimated ultimate recovery) data. The results of this study will then be used as the basis of an independent reserves assessment.

Data Overview

A number of factors including drilling results, test and historical production reviews, petroleum system studies, source rock geochemistry, independently generated petrophysical models and economic scoping studies have all contributed to the belief that Jolly Ranch represents a high impact economic shale oil development project.

The internal and independent assessments completed to date in respect of Jolly Ranch have confirmed significant oil in place and producibility, as well as technical and economic viability.

A summary of the key findings of these reports are as follows:

Source Rock Geochemistry

Organic rich shales, as found in the Cherokee and Atoka formations, are typically viewed as the source rocks for hydrocarbons. Through the thermal maturation process, organic matter converts to oil and gas over geologic time, typically millions to tens of millions of years. Source rock geochemistry from cores taken while drilling has been used at Jolly Ranch to assess the present day level of thermal maturity and the potential for hydrocarbon generation. These shales are within the oil generation window and the oil potential in the source rock has been independently evaluated by Weatherford Laboratories.

Core samples have been collected from certain wells and cuttings were analysed to evaluate source rock potential and thermal maturity of the organic rich shales in the Cherokee and Atoka formations. Rock Eval pyrolysis, another method of analysis, and visual microscopy were also used. Integrating this data with petrophysical interpretation and additional geologic and production data have assisted in developing a more advanced understanding of the hydrocarbon potential in the Cherokee and Atoka.

Humble Geochemistry, a division of Weatherford Laboratories, performed a Leco TOC (total organic carbon) analysis over core samples from certain wells. Total Organic Carbon is a measurement of the organic richness of sedimentary rocks and is one of the first steps toward assessing the potential of a sediment to generate hydrocarbons. Samples evaluated from certain Cherokee and Atoka shales all showed excellent TOC values in excess of 5% with some exceeding 10%. The table below sets out the industry standard classification of total organic carbon in source rock. Generation Potential TOC Content in Shales (wt%)

Poor <0.5%
Fair 0.5-1.0%
Good 1.0-2.0%
Very Good 2.0-5.0%
Excellent >5%

Oil in Place

In July 2009, Schlumberger completed an independent evaluation of the hydrocarbons in place over approximately 246,000 project acres (termed the "Southern Acreage Model") and concluded that the P50, or most likely, oil in place in the Marmaton, Atoka and Cherokee formations, the three primary targets, using probabilistic methods, was 1.462 billion barrels gross of conventional and unconventional oil. The remaining 124,000 project acres will be evaluated at a later date for estimates of oil in place.

In addition, a further model encompassing an area of 885,988 acres, surrounding and including the detailed study of 246,000 acres, but not including the remaining unevaluated 124,000 project acres, was also generated and evaluated. The P50 (most likely) figure was calculated to be 5.258 billion barrels oil in place, highlighting the lateral continuity of the reservoirs and source rocks across the total acreage and in addition, the regional continuity of the formations.

The P50 oil in place calculated for the conventional Marmaton formations alone in the Southern Acreage Model is approximately 900 million barrels. The Marmaton formations are known producers in the Denver Basin and several companies in the past have operated viable oil fields concentrating on this formation.

The objective of Nighthawk is to focus at this stage of Jolly Ranch development on the unconventional shale zones which are believed to be laterally extensive over the project acreage. However, the Marmaton oil in place represents a high value element of the Jolly Ranch asset with known production profiles and completion methods. As the Marmaton is the shallowest of the targeted productive zones within the stratigraphy of Jolly Ranch, it thereby lends itself to being exploited following the successful exploitation of the deeper shales and should be regarded as having upside potential within the asset.

The gross oil in place figures for the unconventional Cherokee and Atoka formations were as follows: Formation P10 OIP (mmbbl) P50 OIP(mmbbl) P90 OIP (mmbbl)

Cherokee 109 157 218
Atoka 310 373 439
Total 419 530 657

Log analysis of oil in place from a number of the wells drilled confirms or exceeds the figures indicated within the independent report. For example, in the core production area, log analysis of the recently drilled Craig 6-4 SWD well indicates oil in place at reservoir conditions for the Atoka and Cherokee formations at depths of 6,497 to 7,164 feet to be 1.53 million barrels on a 40 acre spacing. This equates to 38,000 barrels per acre. The preliminary economic analysis set out below has been based on 160 acre spacing.

Based on historical production and analogue data from the Bakken and other shale oil plays, the internal estimate of recovery factors ranges between 10% and 20%.

Producibility

Production data from both historical and current wells have provided evidence for both the concept of the producibility of the project and the cross validation of the oil in place within the current core area of Jolly Ranch.

These evaluations confirm empirically that production can be achieved from the Cherokee and Atoka formations.

Production data in respect of Cherokee and Atoka production from historical third party wells are as follows;
Operator Well (Completed Zone) Active Dates Production (bbls)
Mull Drilling Craig 1 (Cherokee) 1984-1986 18,229
BHP America Craig 4-34 (Cherokee) 1985-1986 22,674
Anschutz Craig 8-1X (Atoka) 1994-1996 14,622
Wiepking-Fullerton Sellon 29-8 (Cherokee) 2008-present 3,608
Wiepking-Fullerton Withers 10-12 (Cherokee) 2005-present 24,774
Wiepking-Fullerton State Monk 23-6-1 2008-present 21,538
(Cherokee)
Wiepking-Fullerton Forristan Ranch State 2007-present 42,562
22-30 (Cherokee)

The Cherokee and Atoka shale formations at Jolly Ranch are composed of numerous discrete shale horizons over a gross interval of approximately 600 feet. These zones have been analysed and undergone various completion practices to determine which horizons and completion methods will provide the optimal producers in a given well bore. Consequently the level of test production varies significantly between individual wells as set out below. The optimised completion practices are now being applied to all wells with a view to bringing them on to full scale production.
Well Date of first test Total test production to 31 December 2009 (bbls)
production
Jolly 16-1 Nov 2008 996
Jolly 2-1 Nov 2008 481
Jolly 4-13 Feb 2009 2,072
Jolly 10-5 May 2009 1,329
Craig 15-32 Dec 2008 2,499
Craig 4-4 Feb 2009 12,265
Craig 8-1 Feb 2009 176
Craig 15-34 Apr 2009 91
Craig 7-34 May 2009 21
Craig 4-33 Nov 2009 1,268
Craig 12-33 Jan 2010 40
Craig 10-28 Awaiting completion -
Craig 12-28 Awaiting completion -
Total production 21,238

Craig 15-32H

The Craig 15-32H horizontal leg was drilled off the original Craig 15-32 vertical well to a total depth of 8,544 feet, of which 2,006 feet was drilled horizontally through the Cherokee formation. Three of the four stages of the lateral section of the well were successfully sand fracced. Initial swabbing operations prior to this exercise produced in excess of 100 barrels of oil per day. The well requires mechanical remediation following these exercises, which will be undertaken subsequent to the production focused completion exercises in the Cherokee and Atoka zones on the vertical wells.

Salt Water Disposal Wells

Craig 6-4 SWD

The Craig 6-4 SWD was permitted and drilled as a salt water disposal well to reduce the operating costs of production and development. During drilling excellent hydrocarbon bearing formations were encountered within the Cherokee and Atoka shales between 6,489 and 7,079 feet. Log analysis has indicated approximately 1.533 million barrels of oil in place on 40 acre spacing. In light of this result, a twin production well has been permitted to be drilled at a later date.

Jolly 10-1

The Jolly 10-1 encountered hydrocarbons, however for logistical reasons, it is being utilised as a salt water disposal well to reduce the operating costs of production and development.

J-Sand and Codell Wells

In January 2009 a small drilling programme was undertaken consisting of three shallow wells, the Fisher 13-20 targeting the J-Sand formation and the Jolly 9C-1 and Jolly 16C-1 targeting the Codell formation. The operator has reported that the recent testing of the Codell wells indicated low concentrations of hydrocarbons and a decision was made not to complete these wells and therefore, they have been or will be cemented and abandoned in accordance with State regulations. Due to the focus on the Cherokee and Atoka shales, the J-Sand formation and the Codell formation will not be pursued. These wells are not considered material to the project.

The Manassas Field

At the request of the State of Colorado, in February 2009 Nighthawk and Running Foxes took control of the Williams 10-27 well at no cost to the partnership. The well is located in Township 14S R56W on land already leased by Nighthawk and Running Foxes in the south of the Jolly Ranch area.

The Williams 10-27 well is part of the Manassas oilfield, which was discovered in 1976 by Petro-Lewis. The well was completed in a sandstone interval between 7,296 to 7,304 feet within the Atoka formation and produced oil and gas.

Evaluation of historic data shows there to be a full suite of Atoka and Cherokee shales present and indicates their prospectivity. In addition, the well bore is in good condition with significant pressure at the wellhead. As the well is located approximately four miles to the south of the current core project area, the confirmed extent of the Jolly Ranch Group shale play has been considerably increased through the acquisition. In addition, there are 10 feet of Marmaton reservoir present within the well bore which also appear to be potentially productive.

The interpretation of a recent 3-D seismic shoot around the Williams 10-27 well has upgraded this area to a high priority appraisal situation for the shales.

The Bluebird Oil Field

The inactive Bluebird oil field produced approximately 1 million barrels of oil between September 1985 and October 1998 and was acquired in December 2008 in a land package offered at a State of Colorado land sale. The acreage lies within the Mustang Creek section of the Jolly Ranch project.

Whilst current priorities dictate that Nighthawk and Running Foxes focus on proving up and raising the production profile within the Craig Ranch and Jolly Ranch area, the Bluebird oil field represents a further development opportunity at an appropriate time.

Seismic

Whilst it has been indicated that there is a very high likelihood that the Atoka and Cherokee shales are present across the whole acreage, in order to extract an optimum volume of oil the well location needs to be carefully selected. In this respect the recent reprocessing and reinterpretation of the original 3-D seismic surveys has led to the identification of certain seismic and petrophysical indicators, such as natural fracture mechanisms, which when tied back into the existing well logs could indicate areas of optimum production out of the shale horizons. In order to apply these techniques across a wider area, a further 25,920 acres of 3D seismic has been shot and is currently being processed.

Regional Activity

The immediate area surrounding Jolly Ranch continues to see increasing activity. Unit Corporation, EOG Resources, Newfield Exploration, Sundance Energy, Wiepking-Fullerton Energy and McElvain Oil and Gas are all at various stages of exploration and development. Anadarko remain one of the largest landholders in the region.

Preliminary Economics

The results of current preliminary economic studies compiled by Nighthawk and Benavides Petroleum Engineering Inc., a Denver based consultancy, indicate the project concept to be economically viable and demonstrate high rates of return on investment.

The study was executed assuming a single vertical well with a gross capital cost of US$1.4 million completed on 160 acre spacing with 100,000 barrels of gross recoverable oil in the Atoka and Cherokee formations.

The study used reasonable assumptions including comparative figures for variables such as decline and initial production rates and incorporated an industry standard 10% discount rate on a life-of-well basis. A US$70 oil price delivers a post-tax net back to Nighthawk of approximately 40% of the sales price.

With these assumptions and taking account of all royalties and production taxes, plus applicable regional and federal taxes, the discounted cash flow over the life of the well has been estimated to be US$4.7 million, providing a rate of return on the cost of the well of 330% on a discounted basis. On this basis, capital expenditure on the well pays back in less than six months.

These returns compare favourably to other petroleum development projects on a global basis and demonstrate the financial robustness of the project. Although horizontal wells may be used in the future, given these encouraging preliminary economics, the directors believe that, at this stage of development, vertical wells offer excellent value and rate of return.

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

MSCPGUBGPUPUGRP

RNS Number : 3190H Nighthawk Energy plc 18 February 2010

NIGHTHAWK ENERGY PLC

("Nighthawk" or "the Company")

Appointment of Non-Executive Director

The Directors of Nighthawk Energy plc, the US focused oil and gas development and production company (Tickers: AIM: HAWK and OTCQX: NHEGY), are pleased to announce the appointment of Stuart Eaton as a Non-Executive Director with immediate effect.

Until November 2009 Stuart was Head of UK Equity Alpha at Insight Investment Management Limited. Founded by HBOS in 2002, Insight had assets under management of £119 billion in 2009. Stuart joined Insight in May 2005 and was responsible for the management of UK equity long only portfolios.

Prior to Insight he was Director of Specialist Benchmark Funds at Newton Investment Management Limited, where he was responsible for managing global segregated pension funds and unit trusts. He was previously a portfolio manager at Provident Mutual Life Assurance managing UK equity segregated funds.

David Bramhill, Managing Director of Nighthawk, commented; "We are delighted that Stuart has joined the board. Having been a significant investor in the oil and gas sector for many years, we believe that Stuart is well placed to assist in ensuring that our operational progress is reflected in enhanced shareholder value. We consider that his experience will prove invaluable as we continue to grow the Company."

Further information on Stuart Eaton

Stuart Michael Eaton, aged 47, is also a director of Slicethepie Limited and is beneficially interested in 221,500 ordinary shares in Nighthawk.

Mr. Eaton has confirmed that there is no further information to be disclosed in accordance with the requirements of Schedule Two (g) of the AIM Rules.

Enquiries:

Nighthawk Energy plc
David Bramhill, Managing 01271 882160
Director 07956 525433
Tim Heeley, Commercial 020 7887 1453

Director

Westhouse Securities Limited 020 7601 6100
Tim Feather tim.feather@westhousesecurities.com
Matthew Johnson matthew.johnson@westhousesecurities.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

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

BOAGGUBWPUPUPUM