Nighthawk Energy plc Farmout Option Agreement (1745V)

TIDMHAWK

RNS Number : 1745V

Nighthawk Energy plc

01 November 2017

1 November 2017

NIGHTHAWK ENERGY PLC

("Nighthawk" or "the Company")

Farmout Option Agreement

Nighthawk, the US focused oil development and production company (AIM: HAWK and OTCQX: NHEGY), announces a farm out option agreement covering acreage in the Monarch area.

Summary

The Company is pleased to announce that on 31 October 2017 it entered into a farm out option agreement (the "Agreement") with a Denver based privately held oil and gas exploration company (the "Farmee") covering approximately 1,920 gross acres in the Monarch exploration area ("Agreement Area"). Key terms of the Agreement are as follows:

1. The Farmee will have the option to drill prior to 1 November 2018, at its own expense, an initial test well ("Initial Test Well") in the Agreement Area. If the Farmee elects to complete the Initial Test Well as a production well, or plugs and abandons the well as a dry hole, Nighthawk will assign 80% of its interest in the drilled section to the Farmee. If the Farmee does not elect to complete the Initial Test Well, Nighthawk has the option to take over the wellbore at no cost but will assume all future liability. In such an instance, the Farmee will relinquish all interest in the Initial Test Well;

2. If the Farmee has drilled the Initial Test Well to contract depth (as set out in the Agreement) and has completed the Initial Test Well as a well capable of production, or has plugged and abandoned it as a dry hole, and has otherwise complied with terms of the Agreement, the Farmee shall have earned a continuous option for a period of six months thereafter to drill a subsequent test well ("Subsequent Test Well"). Drilling of the Subsequent Test Well will be under the same terms as the Initial Test Well;

3. If the Farmee elects to complete the Subsequent Test Well as a producing well, or plugs and abandons the well as a dry hole, the Farmee will earn an 80% interest in previously unearned acreage of the Agreement Area, following which the Farmee may elect to drill further wells in the area of the Agreement Area. The costs of such further wells will be shared by the Farmee and the Company on an 80%/20% basis, respectively;

4. As part of the Agreement, Farmee will have the option to purchase 80% of the Company's working interest in the existing Monarch 10-15 well for $160,000.

Chuck Wilson, Chief Operating Officer of Nighthawk, noted: "This Farmout Option Agreement creates opportunity for development of existing exploration acreage, providing for the potential of additional revenue and reserves. Nighthawk is pleased to have an established and reputable operator as a partner in the Farmout."

Chuck Wilson, Chief Operating Officer of Nighthawk, who has over 34 years of experience in the oil and gas industry and meets the criteria of qualified persons under the AIM guidance note for mining and oil and gas companies, has reviewed and approved the technical information contained in this announcement.

Enquiries:

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

This announcement contains inside information for the purposes of Article 7 of the Market Abuse 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, 2017 03:00 ET (07:00 GMT)