Shares in Nighthawk Energy (LON:HAWK, OTCQX:NHEGY) rose more than 8 percent in morning trade as the oil exploration group gave a more detailed insight of its plans for the Jolly Ranch Project in Colorado.
In all it will focus on six completions and re-completions following a review by chief executive Tim Heeley and his team.
Analysts said the programme will add to production while hopefully providing management with a far better understanding of the shale play’s prospective zones. It also reveals a new “openness” from Nighthawk, according to Charlie Sharp, analyst at City broker Matrix.
Repeating his 44 pence a share price target, he told clients this morning: “The company is now specifically focused on the Jolly Ranch asset and is carrying out completions and recompletions on six previously drilled wells.
“This involves improved definition of the potentially most productive zones through use of the pulsed neutron log, leading to perforation or re-porforation of the identified attractive zones.
“The company provided a full breakdown of the operations of individual wells, suggesting increasing operational openness.”
Nighthawk said earlier its efforts will be focused on the Craig 4-33, William 1-27, John Craig 7-2, Craig 12-33, Craig 15-34 and Craig 8-1 wells.
In addition, an internal technical assessment is currently underway to assess the potential to drill in the northern section of the Jolly Ranch acreage and the Middle Mist area, with a coiled tubing unit to target the shallower Niobrara formation.
“Whilst there is as yet no firm plan to drill this well, it could form part of the previously announced drilling campaign which is anticipated to commence in the next few months,” Nighthawk added.
“The use of a coiled tubing unit would permit a quick and cost effective method of testing the Cretaceous aged Niobrara shale formation, which is currently the target of numerous wells in the Northern part of the Denver-Julesburg Basin."
The group also announced plans to release end-of-quarter production figures.
Broker Westhouse restated its buy advice and its 37 pence a share price target in the wake of the update.
Analyst David Hart said: “It provides some of the details behind management’s commitment to focus solely on Jolly Ranch and the initial completion and recompletion exercise.
“This activity will not only add test production and associated cash flow, but also further the understanding of the play’s productive zones, and contribute to the development of the ultimate completion techniques which will be required to unlock the potential of the play.”
At 11.30 am, shares in the company, which have fallen 69 percent in the past year, were trading 0.8 pence higher at 10.5 pence.