In another indication that Colorados Niobrara is attracting global interest, London-based Nighthawk is increasing its focus in U.S. shale plays with the announcement that it has entered an agreement with Running Foxes Petroleum (RFP) to acquire an additional 25% interest in the Jolly Ranch project in the Denver-Julesburg Basin.
The energy company will pay RFP more than $12 million in cash and stock in exchange for the 25% stake and operatorship of the project.
“This acquisition will propel Nighthawk to a position of majority partner and operator of a potentially major early stage US shale oil play, with funding available to press ahead with further development,” Nighthawk chairman Stephen Gutteridge said.
Nighthawk’s first phase of development as operator will target the Cherokee formation as well as test the Niobrara formation in the north of the acreage.
Its proposed work program will involve workovers on a selection of existing wells, seismic check shots and reinterpretation of existing 3D seismic surveys and the drilling of five new wells.
Following the completion of the acquisition Nighthawk will own a 75% interest in the Jolly Ranch project and said RFP had signed a separate letter of intent and was in exclusive discussions with an unnamed third party to sell its remaining 25% interest by 30 April next year.
Nighthawk also announced on Wednesday it was planning to raise up to $6.6 million through an open stock offering.