www.nighthawkenergy.net
AIM quoted Nighthawk Energy plc (AIM:HAWK) is a dynamic UK registered energy company with a focus on the development of, and production from, hydrocarbon projects in the USA, a country with low political risk and a major shortfall in domestic oil and gas production.
Nighthawk Energy’s corporate moves should revitalise investor interest, says broker
The recent shake-up at Nighthawk Energy (LON:HAWK OTCQX:NHEGY) should revitalise investor interest in the company, according to broker Westhouse.
In recent weeks Nighthawk has raised over £18 million and struck a deal to take control of the flagship Jolly Ranch shale project in Colorado.
It has agreed to buy an additional 25 per cent stake in the project, taking its stake up to 75 per cent.
At the same time, chief executive Tim Heeley is handing over the reins to the newly appointed management team, led by executive chairman Steve Gutteridge, before joining the operational and commercial team on the ground in Denver.
“These key elements of corporate activity should act as a “collective” catalyst to revitalise investor interest in the company and, crucially, enable Nighthawk to demonstrate its subsurface strategy and move forward to sustainable production,” said Andrew Matharu, head of oil & gas at Westhouse, said in a note to clients.
With Nighthawk now in control as the operator of Jolly Ranch, Matharu says the firm will be able to implement its own reservoir exploitation strategy, and deploy its own operations team.
“We believe that the acquisition of Jolly Ranch, and its associated operatorship, will enable management to implement a reservoir development strategy where they will be able to extract greater shareholder value from the asset than the previous operator.”
Westhouse says Nighthawk can improve the Jolly Ranch operation in a number of ways.
Specifically Matharu reckons improvements can be made in well design and completion techniques deployed, drilling operations and analysis. Furthermore he says that horizontal drilling and side-track wells are also now an option for Nighthawk.
“A significant work programme is planned by the company to commence in the second quarter of 2012, and will include the workovers of existing wells and the drilling of up to five new wells,” Matharu said.
He added: “Development of the full project will necessitate the drilling of a large number of wells.
“Nighthawk, as the new operator, will need to devise a development plan for the field, involving decisions on well design and well spacing.
“We understand that the company has also yet to decide its financial model for developing the acreage. This may involve the sale of part or all of the acreage to a larger company.”
Westhouse rates the stock as a ‘buy’ with a 10.7p price target, which is more than four times the current price of 2.6p.
