29th Oct 2015 09:46
LONDON (Alliance News) - Nighthawk Energy PLC Thursday reported a steady decline in production in the third quarter of 2015 as its producing US wells begin their natural decline as the company progresses its drilling campaign to try and get some new wells up and running.
The US-based oil company said net production in the third quarter averaged 1,417 barrels of oil per day, which has pushed production since the start of 2015 to an average of 1,555 barrels of oil per day, a smidgen above the 1,542 barrels a day averaged a year earlier.
Nighthawk holds an 82% net revenue interest in the producing US assets in Colorado.
Gross production in the third quarter averaged 1,728 barrels of oil per day, but Nighthawk said this has dropped to around 1,600 barrels per day in mid-October.
Importantly, production has fallen consistently month-on-month during the third quarter. In July, net production averaged 1,484 barrels per day before falling to 1,425 barrels a day in August to 1,338 barrels per day in September.
Nighthawk said the production was expected as it is part of the "natural decline" of its existing production wells. It also stressed that it has not included any production figures from the Monarch 10-15 nor Crested Butte 2-14 wells because they are currently undergoing performance testing.
At the Monarch joint development area, the company said it has begun drilling the Happy Jack 7-10 well, which will be followed by the drilling of the North Star 1-14 well before the end of November. Each of those wells is expected to cost around USD1.5 million.
"We are cautiously optimistic about the potential of these two new targets. The information learned from the prior two joint development area wells has provided additional data points in our evaluation and assessment process," said Chief Operating Officer Chuck Wilson.
"As we have disclosed previously, these structures that we have located through use of seismic, must individually be tested to determine if they are oil bearing in the Spergen formation. We have identified a total of 10 such structures in the Monarch JDA and we now plan to test two more structures as part of our planned drilling of the Happy Jack and North Star locations," he added.
After those two wells, the company will "lay down the rig" until spring 2016, taking that time to expand its knowledge and assess the opportunities available to it.
Nighthawk shares were up 4.4% to 2.40 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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