Nighthawk Energy has acquired a 75 per cent controlling interest in the Jolly Ranch shale oil project in Colorado that now forms the sole focus of the company's business. The asset was previously held as a 50:50 joint venture with American firm Running Foxes, which had been operator.
Jolly Ranch is a sizeable project at 410,000 gross acres, but has underperformed due to a lack of funds for development and maintenance work. As a result, production declined to an average of 63 barrels/day from 98 barrels/day in the corresponding period last year and the reported loss in the latest half year is largely due to a $12.6m (£7.88m) impairment charge on the carrying value of the asset.
To finance its increased interest in Jolly Ranch and a programme of drilling new wells and working over existing ones Nighthawk had a £14.7m fundraising in January comprising £10m of unsecured convertible loan notes, an open offer of £1.85m and £2.89m placing. The company plans to invest $7.5m (£4.7m) gross this year on a programme of working over 15 existing wells, which has already started, and drilling five new ones, the first of which is scheduled for the second half. The aim is to boost production substantially and to demonstrate the continuity of the shale over the vast acreage.
| NIGHTHAWK ENERGY (HAWK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 3.75p | MARKET VALUE: | £28.1m | |
| TOUCH: | 3.6-3.9p | 12-MONTH HIGH: | 10.31p | LOW: 2.31p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 5¢* | NET CASH: | $1.49m | |
| Half-year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 0.56 | -24.9 | -7.41 | nil |
| 2011 | 0.42 | -16.6 | -4.10 | nil |
| % change | -25 | - | - | - |
*Includes intangible assets of $18.7m, or 2.5¢ a share £1=$1.588 | ||||
