Schlumberger report finds shales present under most of Nighthawk’s Jolly Ranch acreage

Nighthawk Energy (LON:HAWK, OTC:NHEGY) said that a report on the continuity of the Atoka and Cherokee shales over key areas of its Jolly Ranch project by Schlumberger Data & Consulting Services provides confidence that shales were present under most, if not all of the Jolly Ranch project acreage.

The report was commissioned to confirm independently that the organic rich shales in the Atoka and Cherokee are laterally continuous, specifically between the Craig 6-4 SWD well and the recently drilled John Craig 7-2 well which are approximately 30 miles apart.

It was concluded that in both the Atoka and Cherokee formations, the individual shales can be readily correlated through the area covered by the cross sections and that shales were present under most and probably all of the acreage.
Westhouse Securities featured Nighthawk in its 'Daily Oil & Gas Filter', saying: "This result adds confidence to what we already suspected: that commercially important shales are present throughout Nighthawk’s acreage."
The report is part of an ongoing updated evaluation of hydrocarbons in place and reservoir stimulation report by Schlumberger (NYSE:SLB), which is set for completion in Q4 this year, Nighthawk said.

Jolly Ranch covers 406,400 a (acres) in the Denver Basin in south-eastern Colorado and is currently at a mature stage of development, having progressed through seismic acquisition, drilling, well completion, testing and geochemical and fluid analysis. The initial results have shown well production of up to 180 bpd (barrels per day) from the target formations. A scoping study undertaken by Macquarie estimated the net present value (NPV) of the project at US$2.8 billion based on a 75% WI (working interest) and recoverable reserves of 215.5 mmboe (million barrels of oil equivalent). However, there could be more as Nighthawk is yet to undertake significant development and appraisal work to define a reserve base.

Nighthawk and operator Running Foxes Petroleum are currently planning on selling an up to 75% interest and operatorship of the shale oil project, which broker Edison Investment Research said would offer the group an opportunity to easily bag more than £76 million, which is the group's current market capitalisation.

Shares in the company added nearly 4% on the news.