Fox-Davies Daily Newsflash including Nighthawk Energy, Leed Petroleum, Dragon Oil, African Diamonds and Mwana Africa

Nighthawk Energy (HAWK) announced an update in respect of the Jolly Ranch project in which it holds a 50% working interest with Running Foxes Petroleum Inc., the operator, holding the remaining 50% interest. Jolly Ranch comprises both conventional and non-conventional oil producing horizons targeting primarily Pennsylvanian age formations, namely the Marmaton (conventional) and Cherokee and Atoka (non-conventional) shales. The project covers approximately 370,000 gross acres located in Lincoln, Elbert and Washington Counties, Colorado and geologically located in the southern part of the Denver Basin.  In July 2009 Schlumberger Data & Consulting Services reported that the P50, or most likely, oil in place in the three primary formations across approximately two-thirds of the acreage is 1.462 billion barrels gross.  In addition, the assessment stated that there is reasonable certainty of reservoir and source rock continuity over the project area and surrounding acreage. 13 vertical development wells targeting the Cherokee and Atoka shales (including one well which was sidetracked horizontally), three shallower wells and two salt water disposal wells have been drilled on the project. In addition, an existing production well completed in an Atoka sandstone reservoir has been acquired from the State of Colorado. The project is producing oil from the Atoka and Cherokee shales at depths of 6,500 to 7,500 feet and the operator anticipates an upward trend in production from current average test production levels of approximately 150 b/d to an initial target of 1,000 b/d gross during 2010. The operator has completed three new 3-D seismic surveys that are presently being interpreted, while a re-evaluation of the previous 3-D seismic surveys has indicated a number of conventional targets, basement faulting and areas of potential sweet spots. Schlumberger has been e ngaged to complete an extended modelling and reservoir simulation to allow development of production and recovery profiles, with the results to be used as the basis of an independent reserves assessment.

Leed Petroleum (LDP) announced that the Ship Shoal 201 A-6 well has reached its total depth. The Company's interpretation of well logs confirms the presence of hydrocarbon pay in line with pre-drill expectations. 
The Ship Shoal A-6 well was spudded on 1 February 2010 and reached a total measured depth of 13,341 feet on 17 February 2010. Electric line logs have confirmed that the well encountered a total of 65 feet of true vertical thickness payin the primary sand. The Company plans to test the well from the primary sand shortly and is currently evaluating reserves attributable to the sand, the results of which evaluation will be announced in due course. The Company has a 100% working interest and an 80.2% net revenue interest in the well. The Ship Shoal 201 A-6 well was drilled from the recently acquired Ship Shoal 202 "A" platform in order to expedite commencement of production, which is expected to occur during the 2nd quarter of 2010. Ship Shoal Block 201 is located 125 miles offshore, southwest of New Orleans, Louisiana in approximately 102 feet of water. The Company plans to continue execution of its focused Gulf of Mexico strategy by developing several high quality projects over the next 12 months which could add material new 2P reserves and provide production diversity across multiple fields.Desire Petroleum (DES) announced that, following the arrival of the Ocean Guardian in Falklands waters on 19 February 2010, the Liz 14 /19-A exploration well was spudded at 14.15 hours (GMT) on 22 February 2010.
The well is being drilled to an estimated target depth of circa 3,500m and drilling operations are expected to take approximately 30 days. A further announcement will be made once drilling is completed.

Dragon Oil (DGO) announced its preliminary results for the year ended 31 December 2009. Landmark production of 50,000 bopd was reached at the turn of 2009-10 with average daily rate of production raising 9% to 44,765bopd compared to 40,992bopd in 2008. Eight development wells completed during 2009 with two rigs employed full-time. The New Dzheitune (Lam) B platform was completed and will support 8 new wells by 2011. Additional slots on Dzheitune (Lam) A platform were installed and the Dzheitune (Lam) 63 platform was refurbished and upgraded. The construction of a 30 inch, 40 km oil and gas trunkline and Phase 2 expansion of the Central Processing Facility is ongoing and expected to be completed during H2 2010.
The Company gave a positive outlook for 2010-12 with plans to complete up to 11 wells in 2010 and up to 40 development wells, including five appraisal wells. It targets annual product ion growth of 15% in 2010 and 10% to 15% on average in 2010-12. There are plans to install two additional wellhead and production platforms over next 2-3 years and capital expenditure for oil infrastructure in 2010-12 is estimated at US$600-700m, including US$250m allocated for 2010 projects.
The Company also indicated it continues to make progress in the commercialisation of gas resources and will pursue diversification of its asset base with a focus maintained on quality and strategic fit. The Board is also currently re-examining the corporate restructuring proposal and is reviewing options. Significant progress has been made in corporate social responsibility activities with the completion of the new desalination plant in Hazar, Turkmenistan.
The Company has a strong balance sheet with a net cash position of more than US$1 billion and no debt providing significant financial flexibility.


African Diamonds (AFD) announced an update on the progress of the AK6 diamond discovery in Botswana.  The timeline remains first production in late 2011. A valuation of 1,760 carats of diamonds from AK6 was undertaken in Geneva by Mercury Diamonds. The diamond parcel included 1,175.7 carats of diamond recovered from large diameter drill samples that were processed to recover diamonds greater than 1 mm, and 584.5 carats of diamond recovered from trench samples that were processed to recover diamonds both at a 1mm and 2mm bottom cut off. Mercury noted that the diamonds were of very good quality with a significant presence of Type IIA stones including 12+ carat stones that had been broken into fragments. The modelled valuation of the sample was US$162 a carat.  It was noted by Mercury that diamond breakage was  a  significant problem in the  samples, chiefly caused by the dri lling and diamond recovery process, and that there would be upside valuation potential is this was reduced. 

Mwana Africa (MWA) announced that it has received notification from ASX-listed Shaw River Resources ("SRR") that SRR has exercised its right to acquire Mwana's 80% interest in the Butre Ahanta exploration joint venture in Ghana, pursuant to an option agreement entered into in September 2009. Under the terms of the agreement, SRR were granted a period of six months to evaluate the  prospect in  return for assuming up to $50,000 of  the costs incurred by the joint venture in the period.  SRR were also granted an option to acquire Mwana's interest in the concession for a cash consideration of $200,000 minus the costs incurred. Following the conclusion of SRR's evaluation process, Mwana and SRR have agreed revised terms of the transaction.  In place of cash consideration, SRR will issue to Mwana 980,000 ordinary shares, provided that the market value of the shares on issue i s at least $150,000.  Mwana has agreed to hold the shares for a minimum period of three months from the date of issue. If, however, the market value of the shares on issue is below $150,000, SRR will instead pay to Mwana a cash consideration of $150,000.

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