Nighthawk has announced an operational update in respect of the Jolly Ranch Group project, located in Elbert, Lincoln and Washington Counties, Colorado. Nighthawk holds a 50% interest in the project and the operator, Running Foxes Petroleum Inc., holds the remaining interest.
The Jolly Ranch Group project is a major hydrocarbon production and development venture which includes Jolly Ranch, currently the core area, Middle Mist and Mustang Creek, to the north and west of Jolly Ranch respectively. The current project area comprises 370,578 gross acres (281,069 acres on a net basis).
Drilling results to date have established Jolly Ranch as a significant new oil and natural gas field, particularly in the Atoka and Cherokee shales. These shales are laterally extensive and are believed to be continuous over the entire project area. In addition, several oil bearing conventional zones have been penetrated during drilling, including the Marmaton, Morrow, Spergen, St Louis and Codell formations.
Jolly 10-5 Well
The Jolly 10-5 well, the tenth of the drilling programme, has reached Target Depth and encountered several hydrocarbon bearing formations, both conventional and unconventional. The well has been cased for production and will be put on production in January 2009.
Craig 15-32 Well
The Craig 15-32 well commenced production at the start of December from a four foot Tebo shale, a component of the Cherokee shales, the first test applied to this formation on the project. The oil is 38 API gravity, low paraffin sweet crude and has a -10 degree pour point and no sulphur. The well commenced production at 50 to 60 bbls of oil per day and has increased to 110 to 120 bbls of oil per day with less than 10% water.
The Cherokee formation comprises four shales varying from three to six feet thick for a net thickness of 15 to 22 feet. These shales contain 40% to 80% quartz and carbonates which, based on detailed analysis, are heavily fractured and saturated with hydrocarbons. The Tebo B, Tebo, V and Excello shales all have the same reservoir features. In addition, Omnilabs, a division of Weatherford International, has indicated in detailed reports, that both the Atoka and Cherokee shales in the project area are generating and expelling hydrocarbons and showing characteristics typical of a successful shale play.
Codell and J Sand Drilling Program
Black Gold Inc., a local drilling company, is commencing a four well drilling programme to test the shallower Codell and J Sand formations, both prolific producing zones in the region. Three wells, the Jolly 9C-1, Jolly 16C-1 and Jolly 7-1 will test the Codell formation and the Fischer 14-20 will test the J Sand formation in the Middle Mist Project.
These formations are of Cretaceous age and are located at depths of between 3,000 and 4,000 feet. The J Sand is a prolific producer in the central part of the Denver Basin.
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