Nostra Terra Oil & Gas Company PLC Full ownership of Pine Mills & Increased Reserves (9111P)
September 06 2017 - 1:00AM
UK Regulatory
TIDMNTOG
RNS Number : 9111P
Nostra Terra Oil & Gas Company PLC
06 September 2017
6 September 2017
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Full ownership of Pine Mills & Increase of Reserves
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 it has successfully secured the remaining
12.5% Working Interest in the Pine Mills oilfield, Texas. Nostra
Terra now has 100% ownership of Pine Mills.
Highlights
-- Successful completion of auction, which was undertaken
yesterday, resulting in Nostra Terra owning 100% Working Interest
in Pine Mills
o Effective date of 100% ownership 1 November 2016
-- Increase of Pine Mills Reserves:
o Net Proven Reserves ("1P Reserves") of 326,000 barrels of oil
at Pine Mills (as of April 2017)
o US$4.03million NPV10 valuation to Nostra Terra (as of April
2017)
-- Average 4-month oil production at Pine Mills stands at 106 bopd
o Sustained 15% increase in oil production since assuming
operatorship of Pine Mills
-- Access to non-dilutive funds via Senior and hedging facilities
-- Progress in Egypt
Judgement in Favour of Nostra Terra and Auction Result
As previously announced, Nostra Terra has a non-appealable Court
Judgement against Hammerhead Management Partners ("Hammerhead")
(the "Court Judgement") from GFP Texas, the previous majority owner
of Pine Mills. This Court Judgement stood at $450,246 and was
secured by Hammerhead's ownership of a 12.5% working interest in
Pine Mills. On 5 September 2017, an auction was held for the sale
of the 12.5% stake in Pine Mills. As a result of the auction Nostra
Terra now has full ownership of the 100% working interest in Pine
Mills.
Additionally Hammerhead owes Nostra Terra a further US$594,031
(plus accruing interest), which is comprised of the outstanding
balance of the original Court Judgement and a second trade payable.
Nostra Terra will continue to take action against Hammerhead to
recover this amount.
Pine Mills Bankable Reserves Increase
On 5 April 2017, Nostra Terra published the result of the
Company's Texas Assets Independent Reserves Report ("the Reserves
Report"). Nostra Terra commissioned the Reserves Report to act as a
bankable assessment of the Company's oil-producing assets to enable
it to access hedging facilities against future oil production.
The Reserves Report originally assigned a US$3.53million NPV10
valuation to the Company's then 87.5% stake in Pine Mills and
identified 1P Reserves of 285Mbbl attributable to Nostra Terra. As
a result of yesterday's auction, Nostra Terra NPV10 valuation is
now increased to US$4.03million, based upon its 100% Working
Interest in Pine Mills comprising of 326Mbbl of 1P Reserves.
Pine Mills operational update
Average daily oil production over the last 4 months at Pine
Mills now stands at 106 bopd. This is a 15% increase since Nostra
Terra first assumed the operatorship of Pine Mills on 1 November
2016. Nostra Terra has identified further potential for development
of Pine Mills through reactivating existing drilled wells,
development drilling of proven locations and exploration drilling.
Current production remains above 100 bopd and was not affected by
the recent hurricane in South Texas and Louisiana.
Hedging facility
Operations at Pine Mills have been profitable every calendar
month since Nostra Terra became the operator. Having established a
positive track record of lowered operating costs and increased
production, along with the additional working interest increases
the value of Pine Mills.
Nostra Terra is in the process of updating its Reserves Report
and establishing a hedging facility. The board anticipates the
hedging facility will provide the Company with the ability to
reduce risks associated with fluctuation of commodity prices and
improve access to a significant amount of non-dilutive funds, which
can be used at the Company's discretion in the USA and Egypt.
Egypt
Nostra Terra continues to make encouraging headway in Egypt and
expects to provide an update to the market in the near future.
Matt Lofgran, Chief Executive Officer of Nostra Terra,
commented:
"We're very pleased with the results. Following yesterday's
auction we have confirmed Nostra Terra's 100% Working Interest in
Pine Mills, effective from 1 November 2016. We anticipate this will
have a materially positive impact on the forthcoming Interim Report
for the 6 months ended 30 September. Combined with the operational
improvements we have made at Pine Mills, both in cutting costs and
increasing sustained oil production, we expect to be able to
demonstrate tangible evidence of Nostra Terra's turnaround over the
course of 2017.
At the same time, we are making similarly significant progress
in Egypt and expect to be able to make an announcement
shortly."
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
Smaller Company 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
END
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