Nighthawk Energy (AIM:HAWK, OTCQX:NHEGY) revealed this morning that quarterly production had fallen by over 1,000 barrels of oil to 3,086 barrels in the three months ended December.
The group, which owns the Jolly Ranch Project in Colorado, said the reduction from 4,092 barrels of oil in the third quarter was the result of the increased number of work-overs and recompletions.
Production in the current quarter is broadly level with December’s output which was 986 barrels.
Today’s update makes good on Nighthawk’s pledge to regularly publish production data. The next set of figures, covering the first quarter, is expected to be published in May.
Nighthawk said the information should not be used to calculate daily production as the wells, which are predominantly on test, are intermittently taken offline for routine maintenance, modifications to pumping equipment, weather related conditions, work-overs, recompletions or completion in new zones.
However, as the number of wells increases the effect of individual wells being taken offline will have less effect on the overall production figures, it added.
“The main objective of the current programme, as previously stated, is to establish the optimum completion and stimulation technique that is most applicable in each of the key interbedded sub zone objectives within the Atoka and Cherokee shale formations, and thereby increase production and reserves,” Nighthawk said in a statement to the stock exchange,
The last update from the company in January was long-awaited Eclipse reservoir simulation on the company’s Jolly Ranch Project.
Produced by Schlumberger Data and Consulting Services, it suggested oil in place in the Cherokee and Atoka shale formations is some 14 times higher than previous estimates.
The information will now be passed on to Houston-based Gaffney, Cline and Associates, which will begin a reserves and contingent resources study.
In total Schlumberger reckons there are 35,157 barrels of oil per acre compared with a previous estimate of 5,879 barrels.
The analysis assigns an average recovery rate of around 7.5 percent, though it reckons there will be zero recoveries from both the Marmaton and Marmaton B horizons.
The reservoir simulation lifts the oil in place to 14,219 barrels per acre for the Cherokee formations from a previous 638, to 15,624 barrels from 1,515 for the Atoka formations and to 5,313 barrels from 3,276 for the Marmaton intervals.
Given the significant increase in oil in place within the targeted shale horizons, Nighthawk has commissioned Schlumberger to undertake further field development scenarios.
This will include variable well spacing as well as design and analysis of an optimal fraccing method for possible implementation in the field.