(MENAFN- ProactiveInvestors - N.America) Nighthawk Energy (LON:HAWK) today said it has the confidence to expand its current drill programme, adding one additional well to take the tally to five.
This comes after the first well in the programme, which is now on permanent production, significantly improved production levels at the Jolly Ranch field in Colarado.
Nighthawk says the well, tagged John Craig 6-2, is being 'cautiously managed' to produce between 200 and 250 barrels a day.
It also said the fourth well of the programme is now being drilled, and the third is now awaiting completion.
The company however is having to re-evaluate the stimulation strategy for the second well in the programme after it did not produce oil under initial completion.
"As we move through the new drilling program we are learning more about the hydrocarbon bearing formations and how to effectively complete each hydrocarbon bearing zone," said chairman Stephen Gutteridge.
"It is already clear that each well will require a slightly different approach, with the 6-2 responding instantly to acidisation, whilst the 4-30 has been reluctant so far to flow the identified oil accumulations in the Cherokee.
"What has been consistent however, is the significant prospectivity in all the well logs, and with the increased financial resources now available to us, we have the confidence to extend the 2012 drilling program to five wells.
"On production, the successful John Craig 6-2 well has resulted in a significant step-up in Nighthawk's oil production.
"With current attractive oil prices and an 80% net revenue interest, revenues are now close to covering operating costs and overheads, with a reasonable expectation of more to come from any further drilling success."
"As a result we are able to direct our cash reserves towards the additional drilling and the planning of new activity in 2013."
Impact of the John Craig 6-2 well is clear. Nighthawk said that the new well has increased Jolly Ranch's average gross production to 270 barrels a day.
It was on production for only 3 days in September and that period alone lifted the month's average daily production to 118 barrels. Average production for the third quarter, up to the end of September, average production was 76 barrels a day â€" which is double the average in the first half.
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