Nostra Terra Oil & Gas Company PLC Operations Update (7022C)
October 21 2020 - 01:00AM
UK Regulatory
TIDMNTOG
RNS Number : 7022C
Nostra Terra Oil & Gas Company PLC
21 October 2020
21 October 2020
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Operations Update
Nostra Terra (AIM: NTOG), the oil & gas exploration and
production company with a portfolio of development and production
assets in Texas, USA, is pleased to provide an operations update on
all assets.
During the third quarter, Nostra Terra acquired the Caballos
Creek Asset - an oil producing asset in South Texas, progressed
planned drilling of a new well at Pine Mills and signed a farm-in
agreement for a new oil producing asset in the Permian Basin.
During the fourth quarter the Board's goals are to deliver
significant increases in production and reserves across the
portfolio. Work is focused on assets that will generate near-term
cashflow with lasting reserves.
Caballos Creek (South Texas)
In September 2020, the Company announced the acquisition of this
oil producing asset which is already cash generative. The
acquisition was completed in less than a month, with non-dilutive
financing. Nostra Terra has now assumed operations and is
undertaking a thorough review of engineering and geology to assess
additional upside opportunities in the field. Initial work has
identified multiple potentially productive formations in the oil
field, where we believe there is significant additional pay behind
pipe. These targets are anticipated to be low cost to access and
would represent additional reserves not included in the original
reserve figures announced on 2 September. Nostra Terra plans to
commission a new reserve report and will update shareholders on its
completion.
Pine Mills (East Texas)
In April 2020 a farm-in agreement was announced where a
third-party would drill a new well on a currently undrilled area of
Nostra Terra's 100%-owned Pine Mills asset. Nostra Terra is
receiving a 25% carried working interest ("WI") (at no cost to
Nostra Terra) in the new well and the immediately surrounding
undrilled acreage and has exercised an option to participate for
another 10% WI at cost (7.5% WI factoring in the carry), giving the
Company a total of a 32.5% WI in the well. As announced on 8(th)
October and 19(th) October 2020, progress towards drilling the new
well continues. Drilling is anticipated shortly, in an area that
has become increasingly active of late .
Permian Basin (West Texas)
In September 2020 Nostra Terra signed a farm-in agreement
("Farm-in") where Nostra Terra has an option to acquire a 75% WI in
an existing oil producing asset in the Permian Basin, details of
which are contained in the announcement of 21 September. This is
Nostra Terra's fourth acquisition in the area in recent years. This
asset is similar to the first three acquisitions, in which the
assets had minimal production from existing wells, however, we
recognised significant upside potential which could be realised
through workovers and new wells. This is exemplified by the third
acquisition that produced 3.5 bopd when acquired (similar to the
Farm-in assets), where we later drilled the Twin Well which reached
payback in less than a year (see RNS of 4 February 2019). The new
asset is only 6 miles from the Twin Well with similar geology.
Nostra Terra will be re-entering one of the three existing
wellbores and completing the well in the same target formation and
using the same completion techniques already successfully employed
in the Twin Well. An engineering firm has been engaged to prepare
for the first well. Under the Farm-in, Nostra Terra will earn 50%
of the net cashflow for the life of this well, with an option to
acquire a 75% WI in the entire asset.
Nostra Terra's work program is fully-funded and the upcoming
activity is anticipated to produce significant additional cashflow
for the Company. This cashflow is expected to remain robust, even
at subdued oil prices.
The Company's existing producing assets in East and West Texas
remain in production and the Company will report on the results of
these in its interim accounts to 30 June 2020 which are expected to
be published at the end of this month.
Matt Lofgran, Nostra Terra 's Chief Executive Officer, said:
"We've previously stated that we're focused on increasing our
cashflow in the near-term, through acquisition and development of
producing assets or those that can be put into production quickly,
all with long-life reserves and additional upside opportunity.
We now have three distinct areas of operations further balancing
our portfolio, with activity in each area aimed towards increasing
production and reserves in the near-term. Those activities are now
fully-funded for the current work programmes through investment
from new and existing institutional and professional investors. We
look forward to updating on all fronts as progress continues."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014
Competent Person Disclosure
John Stafford, a Director at Nostra Terra with over 35 years'
relevant experience in the oil industry, 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. Stafford is a Fellow of the Geological Society
and a member of the Petroleum Exploration Society of Great
Britain.
For further information, contact:
Nostra Terra Oil and Gas Company
plc
Matt Lofgran, CEO Email: +1 480 993 8933
Beaumont Cornish Limited
(Nominated Adviser)
James Biddle / Roland Cornish Tel: +44 (0) 20 7628 3396
Novum Securities Limited (Broker)
Jon Belliss
Tel: +44 (0) 207 399 9425
Lionsgate Communications (Public
Relations)
Jonathan Charles Tel: +44 (0) 7791 892509
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