Nighthawk Energy plc Farmout Option Agreement (1745V)
November 01 2017 - 2:00AM
UK Regulatory
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 +1 303 407 9600
Kurtis Hooley, Chief
Financial Officer +44 (0) 20 3582 1350
Stockdale Securities
Limited +44 (0) 20 7601 6100
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
END
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