Nighthawk Energy up on deal to improve margins

Shares in Nighthawk Energy were up after the company signed a deal to improve its cost margins.

The AIM listed company’s share price was up by 0.83% to 3.93p at 1014 BST.

Nighthawk said it entered a new six month contract with its oil purchaser to narrow its netback pricing to $7.00 per barrel, a $1.60 per barrel improvement on current netback pricing. This new agreement will start in September and means Nighthawk’s margins will improve.

Netback is calculated by subtracting all costs associated with getting oil to market from revenue.

The oil company also said it had driven down costs and had produced about 1.5m barrels of oil since it began operating in 2012.
Nighthawk said a five well drilling campaign was scheduled for next month, with estimated drilling costs of $1.4m per well, down by about 30% off 2014 levels.

"We believe that the Company's shares are undervalued. We are committed to closing that valuation gap through our accomplishments and effective communications of our plans and results," Nighthawk chairman Rick McCullough said.