Seeking Alpha is reporting:
Nighthawk has focused on Colorado's Eastern Plains which has good and
low-cost infrastructure. The company's interest is localized in
particular sweet spots of the Mississippian play, based on the
traditional exploration. Nighthawk's Mississippian play is analogous to
the Mississippi Lime play of Oklahoma that SandRidge Energy kicked off with a few horizontal wells in 2009. The Mississippi lime
has been very attractive to operators because of the relatively shallow
targets and smallish completion jobs that keeps well costs down and
profits up.
Nighthawk has been trying to do the leasing as quietly
as possible for competitive reasons, and has amassed about 250,000 net
mineral acres (100% controlling interest) of mineral rights in eastern
Colorado, primarily in Lincoln County.
In Nighthawk's area:
Here are some important facts about the area surrounding Nighthawk's core properties:
1) In July 2011, ConocoPhillips bought 46,000 acres of mineral rights in Adams, Arapahoe, Douglas and
Elbert counties which are neighboring Nighthawk's Lincoln county. In
2012, ConocoPhillips also signed
a $137 million deal with the Colorado State Land Board to lease
state-owned mineral rights (21,048 acres) under the old Lowry bombing
range in eastern Arapahoe County.
According to Matthew Meagher,
whose firm specializes in selling oil and gas properties nationwide:
"It was the toughest oil and gas lease I've ever seen in my life, and
ConocoPhillips accepted it." In addition to the upfront $137 million
payment, the land board also required
ConocoPhillips to pay a 20% royalty payment, as its share of the value
of the oil and natural gas produced from the range. This is obviously
high by industry standards and underscores the company's strong interest
in this oil-bearing area.
2) In May 2013, a new oil gusher was reported in Nighthawk's core area. According to the
Denver-based Rocky Mountain Oil Journal, a horizontal well in Cheyenne
county, the Pronghorn State #16-15-48-1H, owned by Chama Oil &
Minerals LLC has reportedly tested up to 2,000 bopd. Yes, you read that
right. This was a gusher with 100% light oil.
By comparison, the Jake well drilled in 2009 in northern Colorado by EOG Resources initially produced about 1,558 bopd. That was the well that kicked off Colorado's booming Niobrara play. Noble Energy's Gemini well in central Weld County initially yielded 1,100 bopd.
3)
Nighthawk's Lincoln County experienced an oil boom during 2013 with an
unusually high number of new drilling permits being issued. According to
John Dewitt, Lincoln County Land Use Administrator, his office saw a
surge in applications for well permits last year that it had not seen
previously.
Mr. Dewitt said:"Lincoln
County issued 107 drilling permits during 2013. At the start of last
year, we had a little more than a hundred active or producing wells, so
that more than doubles the number of oil wells we have."
As of the
first week of January 2014, there are a total of 182 oil wells in
Lincoln County. "That's 182 wells that are active, producing or capable
of producing oil," DeWitt said.
Market cap: $215 million/250,000 net acres = $860/acre.
It's a great company in a great country, with great potential.
ReplyDeleteI feel lucky to know it already, many more are going to find it out -
At less than $1,000 / acre, it sure is intriguing.
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