Nighthawk Energy, the US focused hydrocarbon production and development company, provides an operational update in respect of the Jolly Ranch Group project, located in Elbert, Lincoln and Washington Counties, Colorado. Nighthawk holds a 50 per cent. working interest in the project and the operator, Running Foxes Petroleum Inc. (Running Foxes), 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 total project area comprises 370,578 gross acres (281,069 acres on a net basis).

Drilling results from the initial ten wells drilled have established Jolly Ranch as a significant new oil and natural gas field, particularly in the Atoka and Cherokee shales, which are laterally extensive and are believed to be continuous over the entire project area. In addition, several conventional oil bearing zones, in particular the Marmaton, have been penetrated during drilling.

Under the rules and regulations of the Colorado Oil and Gas Commission, co-mingling of production from the Atoka, Cherokee and Marmaton reservoirs is permitted at Jolly Ranch. The reservoir characteristics in terms of age of rock and pressure data imply similarity and are therefore not expected to result in production problems. This means that the requirement for multiple wells on one location to produce from separate formations is reduced as production is permitted from multiple reservoirs simultaneously from one well, minimising costs and increasing the rate of return on a per well basis.

The previously drilled wells, the Craig 15-34 and the Craig 4-4, have been placed on production following perforation and acidisation in the Tebo and Lower Atoka shales. Both wells swabbed between 90 and 100 per cent. oil prior to being placed on production. These wells are now awaiting further completion in the Upper Atoka, V and Excello shales and the conventional Marmaton zone.

The Craig 8-1 well, which initially produced from the Lower Atoka shales, has also been completed in the Tebo shales and is now producing from both formations.

All of the ten initial wells, with the exception of the Jolly 10-1 which will be used as a water disposal well, have been or will be subjected to slickwater and sand fraccing in the Cherokee zones. This process has proved to be successful based on the results from the Craig 15-32, Craig 8-1, Jolly 16-1 and Jolly 4-13 wells.

The Craig 15-32, Jolly 2-1 and Jolly 16-1 wells continue to produce at previously reported rates. Production of 1,000 barrels of oil per day (gross) at Jolly Ranch is targeted to be reached during Q1 2009.

Tags: Nighthawk Energy plc