TIDMNTOG
RNS Number : 1297N
Nostra Terra Oil & Gas Company PLC
28 January 2021
7.00am 28 January 2021
Nostra Terra Oil and Gas Company Plc
("Nostra Terra" or "the Company")
Cashflow Positive
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 announce that the Company is
cashflow positive. This is a significant milestone achieved
following comprehensive, but careful, cost reductions and an
increase in daily net oil production by the Company.
Highlights
-- Cashflow positive achieved in December (prior to new well), key drivers being:
o Lowered operating costs and overheads
o Improved operating efficiency
o Increased production
o Increase in oil prices
-- New well at Pine Mills in January increases net production by
circa 26% further supporting positive cashflow
-- Surplus cash to be utilised in further increasing oil production and asset base
The Company is now cash generative at the corporate level
including meeting our monthly debt repayment obligations. Having
now completed the December accounts which included production of
net 103 bopd, the Company achieved positive cashflow in December
2020. In January 2021 Nostra Terra announced the success of the new
well at Pine Mills, adding a further net 32.5 bopd (before
royalties), an increase of approximately 26% in production net to
the Company compared to December's figures. The Company's cashflow
positivity is now a robust position, not simply dependent on the
short-term oil price spike, but being first achieved in December
where the spot price for oil (West Texas Intermediate, "WTI") was
$45. January has proven to be stronger than December: oil prices
have increased further and the new well at Pine Mills is now in
production with its oil sales already commenced.
Lowered operating costs and overheads
During the first half of the year the Company made significant
reductions in overheads at the corporate level and operationally in
the field.
The Company's objective is to have a portfolio of assets with
low lifting costs that will continue to support the Company at
lower oil prices. Nostra Terra has built a lean, but strong,
operating team most of whom we have long-term relationships with.
Another important aspect is the focus on conventional assets, as
opposed to unconventional assets such as "shale plays". These
conventional assets are characterised by shallow decline curves,
relatively lower operating expenses and long-life reserves.
Increased production
Prior to the new well at Pine Mills being completed and put into
production, Nostra Terra returned production from other assets to
above pre-curtailment levels. This month the new well at Pine Mills
was put into continuous production, with sales already occurring.
This provides a further significant percentage increase in
production and net cashflow.
Increase in oil prices
During 2020 the average WTI oil price was $38.52 per barrel
compared to $56.99 in 2019 and $64.94 in 2018. WTI is currently
above $50 per barrel.
(
https://www.statista.com/statistics/266659/west-texas-intermediate-oil-prices/
)
As the macro-economic environment continues to re-build and
strengthen, Nostra Terra will seek to continue to grow cashflow,
production and reserves through a combination of developing its
existing assets and also expanding its portfolio. As previously
mentioned, the Company continues to progress various opportunities
at various stages, both in the USA and internationally. The
unsolicited fundraise completed earlier this month (at no discount
to the market share price) provides additional funds to achieve
this.
Matt Lofgran , Nostra Terra's Chief Executive Officer, said:
"The primary goal for the Company over the past 12 months has
been to become cashflow positive. This became increasingly
difficult during the global economic downturn brought on by the
Covid-19 pandemic, simultaneously bringing on an oil price crash.
We've seen a record number of bankruptcies during the same period.
The Board worked diligently to not only survive the downturn, but
to reposition the Company to be in a stronger position. We're
pleased to be able to announce today that we've reached this
milestone.
During the downturn we've also worked on multiple opportunities
to expand our portfolio, in the USA and in other developed oil and
gas provinces. Our goal with this has been to add to our existing
foundation assets with large multiples of upside in potential
reserves and production, while still sticking with assets that are
substantially de-risked. To help achieve this we have capital from
the recent fundraise, free cashflow from production and our Senior
Lending Facility. We look forward to updating shareholders on
progress in these various areas."
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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END
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