Nighthawk Energy plc Update re Water Flood Pilot Project (9225N)

TIDMHAWK

RNS Number : 9225N

Nighthawk Energy plc

01 November 2016

1 November 2016

NIGHTHAWK ENERGY PLC

("Nighthawk" or "the Company")

Water Flood Pilot Project Update

Nighthawk, the US focused oil development and production company (AIM: HAWK and OTCQX: NHEGY), announces an update to the Company's Arikaree Creek water flood pilot project (the "Pilot Project").

Pilot Project Development Update

As previously disclosed, the Pilot Project was anticipated to begin operations in late October 2016, however this is now expected to be pushed back until mid-November 2016.

On 28 October 2016, the Company performed a mechanical integrity test ("MIT") on the injection wells and were notified that it did not pass state specifications. Therefore, the Company will carry out remediation work on the two injection wells to rectify the pressure drain-offs experienced. The Company expects to be able to pass the state testing, depending on the required solution, in 7 to 14 days.

This is the last remaining step to complete to bring the project online. All other construction and testing has been completed and injection equipment has been installed, ready to commence operations.

In order to comply with the terms of the Company's arrangement with its commercial lender, Commonwealth Bank of Australia ("CBA"), on 31 October 2016 the Company signed an amendment with CBA, regarding project milestones, included in the 4(th) Amendment to the credit agreement which required water flood injection to commence by 31 October 2016 as well as initial well response by that date. The further amendment extends the water flood injection date to 15 November 2016 and initial well response to 30 November 2016. The Company anticipates meeting both these amended threshold dates.

Rick McCullough, Chairman of Nighthawk, commented:

"The MIT testing that was not passed on the two injector wells only related to the wells holding pressure and is, from a technical standpoint, relatively easy to fix but does require the time to re-enter the well. Our operations team immediately began workover efforts following the test results and we are confident we will have the Pilot Project up and running within two weeks. This delay will not have a significant impact on either the revenues or volumes produced from the project."

Enquiries:

 
 Nighthawk Energy plc 
 Rick McCullough, Chairman         [phone] 
 Kurtis Hooley, Chief 
  Financial Officer           [phone] 
 
 Stockdale Securities 
  Limited                     [phone] 
 Richard Johnson 
 David Coaten 
 
 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

This information is provided by RNS

The company news service from the London Stock Exchange

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November 01, 2016 03:00 ET (07:00 GMT)