TIDMNTOG
RNS Number : 2926C
Nostra Terra Oil & Gas Company PLC
15 October 2015
15 October 2015
Nostra Terra Oil and Gas PLC
("Nostra Terra" or the "Company")
Acquisition Completion
Nostra Terra (AIM:NTOG), an oil and gas exploration and
production company with a growing portfolio of producing and
exploration prospects, in a newly-formed joint venture ("JVCO")
with Independent Resources plc ("Independent Resources"), is
pleased to announce the completion of the acquisition of the 50 per
cent. interest in the East Ghazalat concession in Egypt from
TransGlobe Petroleum International Inc, a wholly owned subsidiary
of TransGlobe Energy Corporation ("TransGlobe or the Vendor") for
US$3.5 million (the "Acquisition"), as first announced on 6 October
2015.
Highlights
-- Current gross production from East Ghazalat is approximately
880 barrels of oil per day (bopd), based on average June 2015
production levels (440 bopd net to JVCO).
-- Gross Company 2P reserves attributable to the 50 per cent.
interest acquired ("Acquired Interest") at the effective date of 30
June 2015 were estimated at 1,008,922 barrels of oil (DeGolyer and
MacNaughton Canada Limited estimate).
-- Implied acquisition cost of US$3.47 per barrel of 2P oil
reserves and US$7,955 per barrel of daily oil production
attributable to the Acquired Interest.
-- The concession also includes two gas discoveries mentioned by
TransGlobe on 28 August 2013 and 3 September 2014 in North Dabaa 1X
and North Dabaa 2X respectively. North Dabaa 1X tested at an
average rate of 16 million cubic feet per day (MMCFD) and 1,620
barrels per day of condensate. North Dabaa 2X tested at 18.7 MMCFD
and 542 barrels per day of condensate. No reserves have been
attributed for these discoveries.
-- Operated by North Petroleum, a wholly-owned subsidiary of
China ZhenHua Oil Co, Ltd, a Chinese state-owned oil company.
-- New drilling locations identified for additional wells.
-- The Vendor has agreed to issue a loan note for US$2.5 million
and the remaining cash element due has been funded from cash and an
existing third party loan facility arranged by Nostra Terra. No
shares have been issued by either Nostra Terra or Independent
Resources in conjunction with the Acquisition. The loan note bears
interest at 10 per. cent per annum payable on a semi-annual basis
and must be redeemed by JVCO by 30 September 2017.
The effective date of the closing is 1 July 2015. The immediate
priorities of JVCO are to improve operating margins through cost
reduction initiatives, and to implement further reserve enhancement
opportunities in a disciplined and rigorous manner.
In conjunction with Independent Resources, we continue through
JVCO to appraise a number of other acquisition opportunities in the
region. We look forward to updating shareholders on further
progress.
Matt Lofgran, CEO of Nostra Terra Oil & Gas, commented:
"I'm very pleased to announce the closing of our first
acquisition outside of the USA, with Independent Resources, and the
start of a diversified approach to increased levels of production
and cash generation. The asset provides an opportunity to
measurably impact on cash flows. We look forward to an exciting
future with Independent Resources as there are many opportunities
which we believe we can now consider.
We were able to obtain financing from the seller on very good
terms while keeping the acquisition non-dilutive to shareholders.
While we continue to look at other potential assets to acquire, our
operational team is in the first instance keenly focused on
improving production and margins in this field."
Alden McCall, Chief Operating Officer of Nostra Terra, has
reviewed this announcement for the purposes of the current Guidance
Note for Mining, Oil and Gas Companies issued by the London Stock
Exchange in June 2009. Mr McCall is a Certified Petroleum Geologist
and is a member of the American Association of Petroleum
Geologists, the Society of Petroleum Engineers, the Oklahoma
Geological Society, the Fort Worth Geological Society and the
Houston Geological Society.
For further information, visit www.ntog.co.uk or contact:
Nostra Terra Oil and Gas Company plc
Matt Lofgran, CEO
mlofgran@ntog.co.uk Telephone: +1 480-993-8933
Sanlam Securities UK Limited (Nominated Adviser &
Broker)
Lindsay Mair/James Thomas Telephone: +44 (0)20 7628 2200
Walbrook PR Ltd (Media Relations)
Gary Middleton/Nick Rome Telephone: +44 (0)20 7933 8797
Notes to Editors:
Concession overview
The East Ghazalat Concession (the "Concession") is located in
the Western Desert region of Egypt, approximately 240 kilometres
southwest of the city of Cairo in a platform region over the
Sharib-Sheiba high which covers an area of approximately 626 square
kilometres. Field facilities are located 130 km south-south-west of
El Alamein, a city located on the Mediterranean coast 106 km west
of Alexandria.
The Concession is limited to the north by the southwestern
extension of the Alamein Basin. The southern part of the concession
is situated in the Abu Gharadig and Margin Basins, the former of
which holds some of the greatest hydrocarbon potential in the
Western Desert of Egypt.
The Concession is operated by North Petroleum, a subsidiary of
China ZhenHua Oil Co. Ltd, a Chinese state owned oil company. It
consists of two development licences covering approximately 62
km(2) .
There are currently six wells in production.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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