In June 2014, we highlighted the potential of Nighthawk Energy's (HAWK) acreage, based partly on the success of its Snow King discovery. Unfortunately, Nighthawk's exploration activities, along with its earnings and revenues, have taken an almighty hit from the subsequent oil price collapse.
Though daily production was maintained at just below 2,000 barrels through improved well performance, Nighthawk swung to a pre-tax loss in the first six months of 2015. The driller was faced with higher exceptional costs after it was forced to plug and abandon four wells deemed non-commercial. The company also booked impairment charges on nine wells due to reduced expectations in light of the depressed oil and gas market.
But Nighthawk did reveal that its drilling program was up and running again, following the successful completion of a 10m convertible loan note issue. And the company now expects increased upside in the second half on the back of new marketing agreements. As part of a joint development agreement with Cascade Petroleum, drilling has already begun on the second of four wells scheduled to be drilled before the end of this year, while preliminary 30-day production results from its first well are expected by the end of this month.