The directors of Nighthawk Energy plc announced an update on the Buchanan and Worden waterflood projects, located in Vernon and Bates Counties, Missouri. Nighthawk holds a 50% interest in the projects and the operator, Running Foxes Petroleum Inc., the remaining 50%.
The projects lie on the Missouri side of the prolific Cherokee Basin that is known for shallow oil saturated sandstones which are typically waterflooded for production. Various government reports suggest that 5 to 30 billion barrels of oil remain in place in Missouri.
On October 10, 2007, Nighthawk announced the acquisition of a combined 774 acres at Buchanan and Worden targeting the same Bartlesville sandstone reservoirs as at the Devon Oilfield, in the adjoining State, Kansas and the intention to permit four test wells on each project.
Each of these initial test wells encountered hydrocarbons and as a consequence Nighthawk and Running Foxes have embarked on a proactive land acquisition program. The combined acreage now currently held is in excess of 7,000 acres with further land acquisition envisaged.
A successful development drilling program over the original and newly acquired project areas is underway. 28 wells have been permitted, of which 16 production wells have been drilled to date. All of the wells drilled encountered hydrocarbons, have been cased and are awaiting completion. As a result of this success, permit applications have been made for a further 30 wells which will be added to the development program. The wells are being drilled on a 10 acre spacing therefore the current land base provides over 700 potential well sites.
The test wells all targeted the Upper and Lower Bartlesville channel sandstones, however, an additional oil bearing formation known as the McClouth has been encountered in some wells and has exceeded 60 feet in thickness.
All of the test wells have been evaluated for conventional oil on a 10 acre spacing. The key features of the evaluation are:
The Buchanan and Worden projects are now considered to be of development status and the operator anticipates water injection and the start of oil production during Q3 2008.
Nighthawk has commissioned independent consultants Oilfield Production Consultants Limited to undertake an independent reserve evaluation on the Devon, Buchanan and Worden projects immediately following the ongoing re-evaluation of Nighthawk's 50% interest in the Cisco Springs natural gas project in Utah.
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