Nighthawk Energy plans refinancing after 'significant' oil discovery

17th Apr 2014 16:02

AIM-listed US oil producer Nighthawk Energy made an 'highly significant' oil discovery at one of its well at its Snow King project in Colorado.Snow King's 13-33 well began production on April 12th from the Mississippian Spergen formation, the same pay-zone as its nearby producing Arikaree Creek oilfield, with an initial production rate of 300-400 barrels per day. The company, which enjoyed average gross oil production in March of 1,885 barrels per day, said the discovery "potentially opens up a full-scale development program similar to the Arikaree Creek oilfield".Chairman Stephen Gutteridge said the discovery was "a highly significant success" for the company."We now have two distinct conventional Mississippian discoveries, and this success enhances the prospect of additional discoveries across our extensive acreage position. We have already identified a number of similar structures for future drilling."With further development of Arikaree Creek also planned, management said they intend to maintain the current pace of drilling and development subject to financing, and as a first step to securing short-term funds have agreed revised repayment terms for existing loans from the company's largest shareholder Johan Claesson. The company said management was "currently planning to refinance all existing short-term, non-convertible loans with new longer term borrowing facilities within the next three months".But for now, the repayment date of three loans of $3m each have been delayed by three months and the interest rate on the loans has been lifted from 9% to 15% since April 1st. Shares in Nighthawk were up 625% to 12.75p in late afternoon trading. OH