TIDMNTOG
RNS Number : 6316G
Nostra Terra Oil & Gas Company PLC
31 May 2017
31 May 2017
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Pine Mills Operations Update & Investor Conference Call
Nostra Terra (AIM:NTOG), the oil and gas exploration and
production company with a portfolio of assets in the USA and Egypt,
is pleased to announce an operations update for the Pine Mills oil
field for the first six months since the Company took over as
operator.
At 11am BST today (Wednesday 31 May 2017) Nostra Terra will host
an Investor Conference Call with a strategic update about the
Company followed by a question and answer session immediately
after. Details of how to join the call are provided below.
Highlights:
-- US$586,355 net revenue and US$321,556 net operational profit
(after royalties and severance tax) generated at Pine Mills (100%),
for the period from 01 November 2016 to 30 April 2017.
o Nostra Terra currently owns an 87.5% interest in Pine Mills
but as a result of a recent Court Order will be able to credit bid
for the remaining 12.5% interest in Pine Mills, which would mean it
has full claim to 100% of net revenue and net operational profit at
Pine Mills going forward (please refer to the Company's 24 May 2017
announcement for further information)
-- Average oil production was 91bopd over period, delivering an
average of over $53,000 net operating income per month
o Production so far in the full month of May has averaged
118bopd, a 30% increase over the average for the period
o Nostra Terra remains on course to achieve its stabilised
average daily production target of 130 - 150bopd at Pine Mills
during 2017
-- Average Lifting Costs (Lease Operating Expenses) at Pine Mills for the period: US$16.31/bbl
o Further operational improvements planned
-- Independent Reserves Report (as at 1 March 2017), details of
which were released on 05 April 2017, confirmed:
o Net proven reserves at Pine Mills, attributable to Nostra
Terra's 87.5% WI, were 481,350 barrels of oil*.
o Nostra Terra's 87.5% WI in Pine Mills was assigned an NPV10
valuation of US$3.53million*.
-- Nostra Terra has made tangible progress towards becoming cash
flow positive on a Group-wide basis and aims to achieve this goal
during H2 2017.
*Note these figures were calculated on the basis of Nostra
Terra's 87.5% WI in Pine Mills.
Operations Update
Nostra Terra aims to become cash flow positive on a Group-wide
basis over the course of 2017. Net cash flow generation at Pine
Mills is making an increasingly significant contribution to
enabling the Company to reach this goal.
During the first 6 months of ownership of the Pine Mills oil
field, Nostra Terra focused on decreasing Lease Operating Expenses
("LOE") and overheads, upgrading infrastructure to help stabilise
production, followed by workovers to increase production. Nostra
Terra is pleased to report that these efforts have delivered an
immediate improvement in field performance at Pine Mills.
During the difficult winter months, the Company used this time
to upgrade infrastructure and wells to help stabilize production.
As a result of these activities average production for the
six-month period was 91bopd and the field has been in profit for
six consecutive months since Nostra Terra acquired
Operatorship.
Recent workovers have further increased production, with the
month of May delivering the highest monthly production yet. Current
average daily production at Pine Mills for May is 118bopd. Nostra
Terra will continue to perform workovers on identified
opportunities to increase production further.
The table below summarises the six month operational
performance, on a 100% WI basis, at Pine Mills between 01 November
2016 and 30 April 2017.
Period Sales (gross Net Revenue Lease Operating Net Operating
barrels (after Expenses Profit
of oil) royalties (LOE) (net cash
and severance flow)
tax)
------------- ------------- --------------- ---------------- --------------
01 November
2016 to
30 April
2017 16,600 $586,355 $264,799 $321,556
------------- ------------- --------------- ---------------- --------------
In total, Nostra Terra sold a gross 16,600 barrels of oil at
Pine Mills between 01 November 2016 and 30 April 2017. This
generated net revenue (after royalties and severance tax) of
$586,355. Total LOE, otherwise know as "Lifting Costs", were
$264,799. The average LOE per barrel of oil produced was $16.31.
The net operating profit for the period at Pine Mills was
$321,556.
Nostra Terra currently owns an 87.5% WI in Pine Mills. However,
as a result of the outstanding monies owed by Hammerhead Management
Partners ("Hammerhead") (please refer to the Company's 24 May 2017
announcement for further information), the Board anticipates this
will increase to 100% in the near future. As such, this has
permitted Nostra Terra to retain 100% of all surplus cash flow
generated at Pine Mills. This will be set off against monies owed
by Hammerhead.
Nostra Terra is encouraged by the results of operational
improvements it has made at Pine Mills and still targets average
stabilised average production rates of between 130 and 150bopd. New
workovers are planned to increase stabilised production rates over
the coming months, using internally generated funds. Nostra Terra
will also work to further reduce operating expenses (lifting costs)
and thereby improve operating margins.
Reserves Report
The Independent Reserves Report, released on 05 April 2017,
confirmed Nostra Terra's net proven reserves at Pine Mills were
481,350 net barrels of oil. These net proven reserves were assigned
an NPV10 valuation of US$3.53million. These results were calculated
on the basis of Nostra Terra owning an 87.5% WI in Pine Mills.
Investor Conference Call
At 11am BST, Nostra Terra will host an Investor Conference Call.
To access the Investor Conference Call online and submit questions
please go to:
https://ntog.clickmeeting.com/ntog-investor-conference-call
To access the Investor Conference Call via telephone please
call:
+44 207 048 4146 (use pin: 251916#)
Please note questions can only be submitted via accessing the
meeting online.
Matt Lofgran, Chief Executive Officer of Nostra Terra,
commented:
"With 6 consecutive months of operating profit and now
increasing production rates, Pine Mills continues to generate solid
cashflow for Nostra Terra.
"Our primary focus as a Company is to increase production on
assets that can generate free cash flow at current lower oil
prices. Pine Mills is a great example of this, where the net cash
flow covers the majority of our corporate overheads.
"We look forward to updating on further progress on Pine Mills
as well as other areas of our portfolio."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
For further information, visit www.ntog.co.uk or contact:
Nostra Terra Oil and Gas Company
plc
Matt Lofgran, CEO +1 480 993 8933
Strand Hanson Limited
(Nominated & Financial Adviser and
Joint Broker) +44 (0) 20 7409 3494
Rory Murphy / Ritchie Balmer / Jack
Botros
Vicarage Capital Limited (Joint Broker) +44 (0) 20 3651 2910
Rupert Williams / Jeremy Woodgate
This information is provided by RNS
The company news service from the London Stock Exchange
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