29th Oct 2013 09:23
LONDON (Alliance News) - Nighthawk Energy PLC Tuesday said a Denver-based oil and gas company will drill three vertical wells on a 4,572 acre site at its Jolly Ranch project in Colorado, carrying some of the costs of the work but also getting a share of revenue.
The US-focused oil and gas producer said the unnamed company will carry all the costs of the work, earning a 50% working interest in the area and 40% net revenue interest once the work is completed.
Under the so-called farm-out deal, drilling is to start no later than April 30 next year, and the drilling company's earn-in will fall if it decides to drill fewer wells than the three agreed.
"This allows us to focus our own financial and operational resources on additional Pennsylvanian and Mississippian targets, opening up a larger proportion of our acreage to potential development," Nighthawk Chairman Stephen Gutteridge said in a statement.
Nighthawk Energy shares were up 9.1% at 12 pence Tuesday morning, one of the biggest rises on AIM.
By Steve McGrath; [email protected]; @stevemcgrath1
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