Nighthawk Energy has noted an independent evaluation of the hydrocarbons in place at the Jolly and Craig Ranch fields, part of the Jolly Ranch project, Lincoln County, Colorado. The P50 or most likely oil in place (OIP) estimate of the 246,000 gross acres evaluated, using probabilistic methods is calculated to be 1.462 billion barrels gross.

Nighthawk and Running Foxes Petroleum Inc., hold approximately 370,000 gross acres at the Jolly Ranch project, incorporating Jolly Ranch, Middle Mist and Mustang Creek. Nighthawk holds a 50 percent interest and Running Foxes holds the remaining 50 percent of the project.

Schlumberger Data & Consulting Services reviewed the petrophysical and geological data associated with the Jolly Ranch and Craig Ranch fields, Lincoln County, Colorado. This study was undertaken to assess resources in place under Nighthawk's acreage in the Pennsylvanian (Upper Carboniferous) Marmaton, Cherokee and Atoka formations. Also included within the evaluation was the determination of lateral continuity for the reservoir and source rocks.

For the purpose of this study approximately 246,000 gross acres were reviewed and evaluated representing a significant proportion of the land which Nighthawk and its partner Running Foxes hold under lease at the Jolly Ranch project.

In addition, a further model encompassing an area of 885,988 acres, surrounding and including the detailed study area of 246,000 acres, was also generated and evaluated. Whilst not fully evaluating Nighthawk's and Running Foxes' total acreage holding, the assessment showed the potential for lateral continuity of the reservoir and source rocks across the total acreage. From this study it was concluded that the regional continuity of the formations was such that the resources in place are likely to be laterally continuous.

Historical Production Review While a full characterisation of the production history at the Jolly Ranch project was outside the scope of the study, it was important to review results to date as part of an integrated study to be able to validate the results of the petrophysical and geological interpretations. Actual production results provide evidence for successful play concepts and cross-validate oil in place calculations from petrophysics and geology. Production histories from historical wells in the immediate study area were reviewed to make general observations on Atoka and Cherokee production. Offset current activity in Lincoln County, from the Marmaton, Cherokee and Atoka zones were also reviewed.

Shallow production from the Cretaceous D and J sands at the Bluebird field, contained within the Nighthawk and Running Foxes acreage was also summarized, as these sands are present within the study area and could represent upside opportunity if identified in an appropriate structural trap.

Historical production data was available for several wells and fields within the Jolly Ranch/Craig Ranch area. The operators were Mull Drilling, BHP America, Anschultz, Wepking-Fullerton, Newfield, Citation Oil and Gas, Ritchie Oil and Gas and Heartland Oil and Gas.

Managing Director of Nighthawk, David Bramhill, commented, "Our objective is to deliver excellent returns to shareholders by building a scalable, viable oil and gas company. The results of the review provide not only transparent figures for our core asset but also corroborate Nighthawk's strategy and underpin progress made to date. My belief that Jolly Ranch has the potential to become a 'world class' asset has been strengthened considerably by these results. However, this is only the start of the Jolly Ranch development story. There remains much work to be completed such as further delineating the oil in place, defining optimum production zones and establishing recovery factors using modern completion practices and techniques. Prior to the oil price crisis on the 80s and 90s, producers in the region were operating profitably with percentage recovery rates in the low 20s.

"The oil in place figures reported will, in my opinion, place the Jolly Ranch project, located in a politically stable environment, on the radar screens of major energy companies and is an excellent stepping stone for the next stage of development of both Jolly Ranch and Nighthawk. The natural progression is now to continue the pace of development and determine the optimum production and recovery rates and continue the derisking of the project, eliminating the normal uncertainties of a project of this magnitude, such that firm economics can be established leading to major value creation.

"Steven Tedesco, CEO of Running Foxes, who introduced the Jolly Ranch project to Nighthawk less than two years ago, has excelled. We look forward to updating the market as we rapidly progress this exciting development project."

Tags: Nighthawk Energy plc