Nighthawk wells closed by excess water

Shares in Nighthawk, the US focused shale oil development and production company, fell on Thursday after it said weather problems had kept one of its mines closed.

Its wholly-owned Knoss 6-21 well in the Jolly Ranch Denver-Julesburg Basin in Colorado had to be shut shortly after production began in mid-December due to bad weather.

The firm said after the weather shut-in, very high initial fluid production from the well had exceeded available water disposal capacity in the area.

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The problem was exacerbated by the well itself producing with a relatively high water cut.

The company is currently upgrading its water disposal capacity and said the Knoss 6-21 well will be brought back on-line when that work is complete around mid-January.

The John Craig 6-2 well, which also produces significant amounts of water, was shut-in for most of December.

News of the closures pushed shares down 7.8% by 0930 on Thursday.

But there was positive production news with Nighthawk trumpeting average total oil production in December of 276 barrels per day, a record monthly production level for its Smoky Hill and Jolly Ranch projects.

Average total oil production in the fourth quarter of 2012 reached 192 barrels, a record quarterly production level for the projects.