Half Yearly Report

29 March 2011

NIGHTHAWK ENERGY PLC

("Nighthawk" or "the Company")

Half Yearly Report

Nighthawk, the US focused hydrocarbon development and production company (AIM: HAWK and OTCQX: NHEGY), announces its interim results for the six months ended 31 December 2010.

Financial Highlights

·; Revenue of US$1.30 million (2010: US$1.01 million)

·; Loss on disposal of US$40.4 million on Revere plus impairment of US$1.95 million on Cliffs and US$21.26 million on Cisco Springs

·; £25 million equity draw down facility entered into with Darwin Strategic

·; Deriving value from the Jolly Ranch project continues to be the key focus

Operational Highlights

·; Ongoing recompletion and completion operations at Jolly Ranch

·; Focus remains to optimise completion method to increase production

Post Period End Highlights

·; Schlumberger report confirms increased estimates of Oil Initially In Place over part of the Jolly Ranch project

·; Gaffney, Cline & Associates evaluation of Reserves and Resources underway on Jolly Ranch area

Tim Heeley, CEO of Nighthawk, commented:

"Following our strategic review we took the decision to focus activity on our core Jolly Ranch project in order to accelerate progress and maximise returns from what we believe is an as yet unrecognised asset. As a result we exited and wrote down the value of projects that did not offer value and scalable upside for investors. Recent developments including an uplift in the oil in place estimates and, more importantly, initial results from our workover programme, have reinforced the conclusions we reached following the strategic review.

"Although the full effects of the ongoing cost saving initiatives will not be felt until the end of the full year, controlling expenditure continues to be a priority to ensure funds are focused on proving up value on the Jolly Ranch project.

"Nighthawk has taken Jolly Ranch from an initial concept to a comprehensive, but still early stage, shale development with 19 wells, early production and excellent understanding of the key geological and geo-mechanical characteristics needed to grow a shale play. The development is far from fully understood but good progress is being made. The process from here is to continue the fracturing and stimulation activity, grow the well portfolio and accelerate the rate of development."

CEO's Statement

Financial and Corporate Overview

The financial results for the period ended 31 December 2010 reflect the operations of the Company prior to the implementation of the conclusions of our strategic review and the consequently restructured asset base. The corporate and operational cost reduction measures implemented following the management changes of 29 September 2010 are now beginning to be reflected in the accounts but the full effect will not be seen until the second half of the year.

The Administrative Expenses figure of US$25.24 million includes a number of cost items that are unrelated to the ongoing operations of the business, including US$1.95million of charges relating to the impairment of the Cliffs project in Illinois and US$21.26 million for Cisco Springs in Utah. Nighthawk continues to focus on cutting unnecessary expenditure and ensuring that the Company's resources are appropriately allocated to deliver value.

In recent months the Company has issued periodic operational updates and launched a new corporate website. The Company is also pursuing a number of initiatives to strengthen its commercial and operational capabilities as it grows which will be announced in due course.

Strategic Review

The conclusion of the Strategic Review, undertaken in October 2010, was to focus primarily on the Jolly Ranch project, exit the Revere and Cliffs projects and actively consider disposal options for the Cisco Springs project. The accounting effect of these actions is reflected in these interim results as follows:

Revere Project

The project was disposed of to the Operator as of 31 December 2010 and the Company no longer has any liability associated with the project. The Company has written down US$40.4million in relation to the disposal of the asset whilst retaining an asset in the Balance Sheet for the Over Riding Royalty of 5% of gross production for three years.

The Company retains the right to back into the project for 120% of back costs up to 31 December 2013 and will also receive 25% of any future sale if undertaken before this date.

Cisco Springs

The Cisco Project has been impaired in the accounts by US$21.26 million, with US$2.5 million maintained on the Balance Sheet as a reflection of management's estimate of the net realisable value of the project.

There remains a small level of expenditure on the project due to the Operator recently employing Nuclear Magnetic Resonance ("NMR") log analysis techniques to assist in identifying missed oil bearing zones in existing well bores with a view to maximising oil production in the interim, given the current oil price.

The Company continues to examine a number of disposal options for its 50% net working interest in the project.

Cliffs

The Cliffs project has had no wells drilled on it and the leases are being allowed to lapse as part of the Strategic Review. Costs of US$1.95million have been written down with respect to this project.

Jolly Ranch Group

Nighthawk holds a 50% interest in the Jolly Ranch Group Project ("Jolly Ranch"), covering 410,000 gross acres in Lincoln, Elbert and Washington Counties, Colorado. Jolly Ranch has multiple conventional and non-conventional oil bearing horizons. Nighthawk is primarily targeting Pennsylvanian age Cherokee and Atoka shales.

The process is to learn how the wells can be completed and stimulated with maximum commercial payback, which is of paramount importance in deriving value from the project for shareholders. Production is of course an important factor in helping derive this value but at the current stage of development the determination of the optimal completion procedures takes precedence. The injection of capital into the project at this stage is not proportionate to the level of reserves, however continuing development should see this relationship improve and revenues increase.

In July 2009 Schlumberger Data and Consulting Services ("Schlumberger") undertook its first study of the Jolly Ranch project and assessed 246,000 gross acres. The conclusion was that approximately 1.4 billion barrels of oil were in place in the Marmaton, Cherokee and Atoka formations; with the shales contributing approximately 2,150 bbl/acre. In addition Schlumberger concluded that the shales are present under most, if not all, of Nighthawk's acreage.

Following this report further wells were drilled thereby increasing our knowledge of the inter-bedded shale formations and establishing long term test production. This increased understanding led to Schlumberger being commissioned to undertake a more detailed simulation study focused on approximately 3,200 acres of Craig Ranch, part of the Jolly Ranch project, where many of the wells and the production are located.

This second report not only concluded an approximate 14 fold uplift in the oil in place within the Shale horizons on the acreage studied but also gave an initial assessment of the potential recovery from the shales.

A recovery rate was assessed on the basis of a number of prediction scenarios with various well and economic parameters and cut offs and is presented for each of the horizons below for the modelled area based on vertical wells on 40-acre well spacing.

Value Add

The capital investment in Jolly Ranch to date is approximately US$46 million net to Nighthawk and has taken the project from an initial concept to a comprehensive, but still early stage, shale development with 19 wells, early production and an excellent understanding of the key geological and geo-mechanical characteristics needed to grow a shale play.

The development is far from fully understood but progress is being made. The process from here is to continue the fracturing and stimulation activity, grow the well portfolio and to accelerate the rate of development.

Jolly Ranch - Current well status

Production

Production volumes from the project continue to be a focus as Initial Production ("IP") rates and long-term production profiles are a key factor in determining value in the shale play.

Ongoing test production means that wells are producing as the performance of the acidisation and fracturing method applied is observed. It can take many weeks for an acidised or fracced well to settle into stabilised flow and the type curve, a profile of a "typical" well, can be developed.

Shale wells are developed by drilling wells as the work needed to understand the completion methodology has to be undertaken in the well bore; the more wells that are drilled, the greater the confidence and understanding of the shale leading to a greater number of wells that can be brought into production.

Gaffney Cline

Gaffney Cline is working on the assessment of reserves and resources of the Jolly Ranch development. The study is expected to be concluded and the results announced in the near term.

Summary

Nighthawk's strategic aims for the remainder of 2011 are to:

·; Increase production levels

·; Establish reserves and resources at Jolly Ranch for the first time

·; Continue to improve our technical understanding of our assets so as to underpin a valuation typical of other US shale oil plays

·; Enhance visibility for investors in Europe and the US and increase institutional participation

·; Establish core operational competencies within the Company

Nighthawk is increasingly well positioned for the future. Solid progress is being made towards demonstrating the potential significant value at Jolly Ranch and the Company is well positioned in the context of the broader global geopolitical backdrop.

The management team and Board remain confident that significant progress will be achieved towards our goals in 2011 and beyond.

Tim Heeley

Chief Executive Officer

Unaudited Condensed Consolidated Income Statement

for the six months ended 31 December 2010

Unaudited Condensed Consolidated Statement of Comprehensive Income

for the six months ended 31 December 2010

Unaudited Condensed Consolidated Balance Sheet

as at 31 December 2010

Unaudited Condensed Consolidated Cash Flow Statement

for the six months ended 31 December 2010

Notes to the Unaudited Financial Information

for the six months ended 31 December 2010

Accounting policies

The interim financial information in this report has been prepared on the basis of the accounting policies set out in the audited financial statements for the year ended 30 June 2010, which complied with International Financial Reporting Standards as adopted for use in the European Union ("IFRS").

IFRS is subject to amendment and interpretation by the International Accounting Standards Board ("IASB") and the IFRS Interpretations Committee and there is an ongoing process of review and endorsement by the European Commission.

The financial information has been prepared on the basis of IFRS that the Directors expect to be applicable as at 30 June 2011, with the exception of IAS 34 Interim Financial Reporting.

The condensed financial information for the year ended 30 June 2010 set out in this interim report does not comprise the Group's statutory accounts as defined in section 434 of the Companies Act 2006.

The statutory accounts for the year ended 30 June 2010, which were prepared under IFRS, have been delivered to the Registrar of Companies. The auditors reported on these accounts; their report was unqualified; did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006, and did not include reference to any matters to which the auditor drew attention by way of emphasis.

1. Administrative Expenses

Included within Administrative Expenses is an impairment of US$1.95 million for the Cliffs project and an impairment of US$21.26 million for the Cisco Springs project.

The Cliffs project has no wells drilled on it and the leases are being allowed to lapse following the Strategic Review that took place in October 2010, resulting in a full impairment of the intangible asset and property, plant and equipment associated with the project.

The Cisco Springs project has been impaired down to a residual value of US$2.5 million in the Balance Sheet as a reflection of management's estimate of the net realisable value of the project.

2. Loss per share attributable to the equity shareholders of the Company

As at 31 December 2010, 30 June 2010 and 31 December 2009 the options in issue are not dilutive under IAS 33, Earnings per Share, because they would have the effect of decreasing the loss per share. As such there is no difference between the basic and dilutive loss per share at these dates.

3. Taxation

There was a small current tax charge of US$11,478 paid by a US subsidiary in the interim period, but no other current tax charge for the period due to the loss incurred (2009: US$ nil).

A deferred tax asset in respect of trading losses and share based payments has not been recognised due to the uncertainty over timing of future profits. The trading tax losses are recoverable against suitable future trading profits.

4. Loss from discontinued operations

As a result of the Strategic Review, undertaken in October 2010, the Revere project was disposed of to the Operator as of 31 December 2010 and the Company no longer has any liability associated with the project.

The Company has recognised a loss on disposal of US$40.4million in relation to the Revere project representing the sale proceeds less the costs of the project. Part of the sale proceeds include the recognition at fair value of an intangible asset of US$294,000 for the Over Riding Royalty of 5% of gross production and the Company's retention of the right to back into the project for 120% of back costs up to 31 Dec 2013 and receipt of 25% of any future sale if undertaken before this date.

5. Share Capital

During the period to 31 December 2010, 28,463,600 shares were issued at 11.51p raising £3.275 million as a result of a draw down from the EFF agreement.

Following the Placing, there are 358,103,080 ordinary shares of 0.25p each in issue.

6. Post Balance Sheet Events

On 1 February 2011, 20,000,000 shares were issued at 9.50p raising £1.899 million as a result of a draw down from the EFF agreement.

Following the Placing, there are 378,103,080 ordinary shares of 0.25p each in issue.

7. Copies of the Half Yearly Report

A copy of this Half Yearly Report is now available on the Company's website at: www.nighthawkenergy.com