Nighthawk Energy plc provides an update on operations at the Cisco Springs project, located in Grand County, Utah. This update includes details of the commissioning of the new production facilities and the commencement of gas sales, the acquisition of a further 12.5 per cent. of the Cisco Springs project from the operator, Running Foxes Petroleum Inc. (”Running Foxes”) and positive drill results from both the Summer and current drilling programmes.

David Bramhill, Managing Director of Nighthawk commented “With the implementation of the new production facilities, we are now in a position to start to gear up production levels. Along with our partner Running Foxes, we have demonstrated the ability to bring a project from exploration and development to production status. Credit must be given to Steven Tedesco CEO of Running Foxes and his dedicated team who have worked tirelessly on both an almost continuous drilling programme as well as the construction and commissioning of the new production facilities. This augurs well for the future of our other development projects, in particular Jolly Ranch, where expectations are high and the Devon Oilfield, where four water injection wells have been successfully completed and pilot production will commence in the near future. As a result, we are confident that Nighthawk will be reporting on further development projects being brought into production in 2008.”

Highlights

• New production facilities operational • Acquisition of further 12.5 per cent. interest in Cisco Springs project • P50 net natural gas reserves increased by 33.3 per cent. to 125 bcf through the acquisition • Six recent wells completed as future producers

Commissioning of new production facilities and commencement of gas sales Construction and commissioning of the first phase of the Nighthawk and Running Foxes jointly owned Cisco Springs production facilities is complete and natural gas is now being sold to market directly via the Northwest pipeline.

Previously drilled production wells are currently being hooked up to the facilities via an internal pipeline network and production and gas sales at the end of 2007 are expected to be between 1.0-1.5 mmcfgpd. Planned production will be incrementally increased to between 3.0-4.0 mmcfgpd by the end of 2008. Upgrading of the production facilities is ongoing and an additional compressor capable of handling 1.2 mmcfgpd is en-route to Cisco Springs and will be tied-in to the facilities on arrival at site. This will augment the existing compressor which is rated at 3.0 mmcfgpd. Gas prices in the Rocky Mountain region have firmed considerably during late November and December 2007 and 50 per cent. of Cisco gas is being delivered at daily spot price and 50 per cent. at monthly spot price. Forward sales contracts are also being considered by Nighthawk and Running Foxes for the future.

The Rocky Mountain region is currently seeing major activity in respect of local pipeline construction. During the next four years, the Bronco pipeline, operated by Spectra, is expected to be commissioned supplying natural gas to the Western US markets, followed by the important Kinder Morgan, Rocky Mountain pipeline which will, upon completion, supply product to the high demand markets of New York, where prices are usually at a premium to NYMEX. In addition the Williams pipeline is expected to ship product eastwards in 2010. These new pipelines will open additional markets to Cisco Springs production and are expected to underpin gas prices in the region.

Acquisition of a further 12.5 per cent interest in the Cisco Springs project Agreement has been reached with Running Foxes to purchase with immediate effect a further 12.5 per cent. working interest in the Cisco Springs project, increasing Nighthawk’s currently held 37.5 per cent. interest to 50 per cent.

The purchase price for the additional interest is US$4,000,000 which will be funded from the Company’s existing cash reserves. Included in the transaction is a pro rata interest in the project owned production facilities, Ingersoll-Rand drill rig, a workover rig and all other project related equipment including a pipeline network and numerous oil storage tanks. Nighthawk will be entitled to a 50 per cent. revenue share from all gas and oil sales from 1 December 2007.

The transaction provides Nighthawk with a significant increase in both P90 and P50 reserves. Based on the Competent Person’s Report of March 2007 on the Cisco Springs project by Oilfield Production Consultants Limited (”OPC”), P90 reserves (Proven), net to Nighthawk, increase through the transaction from 74.9 bcf (billion cubic feet) to 99.85 bcf and P50 reserves (Proven + Probable) from 94.2 bcf to 125.59 bcf.

OPC was commissioned to comment on the acquisition of the additional interest from Running Foxes and their comments are as follows:

“In equivalent terms, the consideration is considerably less than the NPV10 of the Cisco Springs project as evaluated by OPC in its CPR of March 2007. We have been advised by the Directors of Nighthawk that since that time the two companies have become partners in several new development projects and the acquisition can thus be considered a strategic transaction.

“We are also advised by the Directors of Nighthawk that since the OPC evaluation a significant number of new wells have been drilled on the project. We have inspected the data from several of these wells and confirm that the results are in line with the OPC parameters assumed in the CPR, while in some cases they have significantly exceeded expectations. Furthermore, additional acreage to that evaluated in the CPR has been acquired and this could be expected to increase pro rata the NPV of the project.

“Given this information, OPC is of the opinion that any revised and updated evaluation of Nighthawk’s interest in the Cisco Springs project may well reflect a value materially higher than that originally calculated.”

Drilling programmes and results A drilling and development programme of over 60 wells commenced in June 2007 and is ongoing. Drilling results to date continue to confirm the presence of additional hydrocarbons. Commercial discovery wells have been logged and cased as producers and are currently being hooked up to the Cisco production facilities.

Nighthawk and Running Foxes have adopted a systematic and scientific approach to field development including the shooting of seismic and the flying of an aeromagnetic survey over much of the project area which covers in excess of 18,000 acres. The subsequent interpretation of this seismic and aeromagnetic data has resulted in a better understanding of the reservoir distribution, minimising the potential for dry holes.

Following completion of the previous ten well programme, Major Drilling, a Salt Lake City based drilling company, commenced a seven well programme in late October 2007. The three wells drilled to date, the Cisco 7-8-1, Cisco 7-1-1 and Cisco 6-13-2 have all indicated hydrocarbon reserves in place and have been logged and cased as future production wells. The remaining four wells will be completed by mid-December. Additional drilling permits are expected to be received from the Bureau of Land Management in the near future.

Another important recent development has been the recognition of the production potential of the Mancos shale, which covers the whole project area. This potential is currently being investigated, and to date, Nighthawk and Running Foxes are encouraged by the results obtained at this early stage of evaluation.

In addition to the new well programme, a number of the 62 old wells that were part of the original purchase package have been successfully re-entered, resulting in increased production rates and the discovery of additional hydrocarbon reserves. A typical well costs US$140,000 to US$200,000 through to completion. Using heavily discounted recovery factors the potential rate of return per well is a multiple of 10 to 15 times drilling costs, amply demonstrating the financial robustness of the Cisco Springs project.

The wells drilled are evaluated for conventional gas (on a 40 acre spacing) and oil (on a 10 acre spacing) potential. The majority of new commercial wells drilled are gas producers. However a notable feature of recent drilling has been the discovery of significant oil zones.

Wireline log analysis is conducted by Atoka Laboratories, using Bowler JLog petrophysical analysis software. Analysis of the final three wells from the summer programme and the first three wells of the new programme has been completed.

Tags: Nighthawk Energy plc