31st Jul 2015 15:34
LONDON (Alliance News) - Nighthawk Energy PLC said Friday it plans to recommence drilling by early September 2015, and that it has secured funding with its major shareholder Johan Claesson to support the drilling.
Claesson has a 16.53% interest in the company, according to Morningstar.
The oil and gas company operating in the US state of Colorado said it is planning to begin drilling in late August or early September with a five well programme targeting the Mississippian Spergen formation in the Arikaree Creek Field.
It said that since it last drilling January, the capital cost to drill and complete a new well and to install surface facilities has significantly reduced. Recent quotes for services and supplies indicated an around 30% reduction in total drill, completion and facilities cost of a new well, Nighthawk said.
Nighthawk has agreed a GBP6.4 million unsecured convertible loan note subscription deal with Claesson, who is a non-executive director of the company. It has looked at other financing options, but said that in light of current commodity price market conditions, it concluded this was a more appropriate option.
Claesson has subscribed for GBP1.8 million of the convertible loan notes, and has underwritten an additional amount of up to GBP4.6 million of convertible loan notes, which may be offered for subscription to other existing investors in Nighthawk by no later than August 14.
"We are very pleased with this capital raise and the continued support we receive from our major shareholder, Johan Claesson. This funding will provide us the necessary capital, along with our existing cash flows and reserves based bank loan to drill five wells in 2015 and probably twice that many in 2016," said Chairman Rick McCullough in a statement.
"The board believes that there exists a material gap between the potential intrinsic value of the company's assets and the company's market valuation and remains focused on taking all possible actions to close this gap and demonstrate this value for the benefit of all shareholders," McCullough added.
Shares in Nighthawk were up 3.9% at 3.66 pence Friday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Nighthawk Energy