Nostra Terra has been pushing out news with amazing regularity recently. It all started midway through the year when the company acquired a new CEO, Matt Lofgran.
Since then, it's changed its strategy completely. Having started out with an oil field in Ukraine, it's now moved to invest in US oil fields instead - looking for areas where the exploration and operational risk, but also political and currency risk, is much lower. While it retains the Ukrainian asset for the time being, it might well try to sell it - on the other hand it's developing its US assets fast, bringing its fields into production and looking for further investments of a similar type.
So far, Nostra Terra has been working exclusively in the US with its joint venture partner, the privately held Hewitt Petroleum Inc. (HPI), which serves as operator on the leases in which NTOG has acquired an interest. Utah-based HPI's speciality is the identification, acquisition and management of older oil and gas fields that have either been abandoned, or are producing well below capacity, as they have passed their peak of production.
HPI uses modern technology to recover additional hydrocarbons from these old reservoirs, at low cost - management claims to be able to produce at less than USD 11 a barrel operating cost [1] , which is well below the 2006 average US onshore production cost of USD 19.46 [2] - and costs have presumably increased for most producers in the past three years.
HPI also has an enviable success rate in discovering additional commercial reserves. It has built up a massive database of leases in target oilfields, and is looking to acquire further assets. It is likely that Nostra Terra will be able to participate in some of these leases. It's also worth noting the speed with which HPI has been able to bring the joint venture assets into production - whether that's a feature of HPI operations generally, or simply the fact that NTOG's participation has freed up cash for investment.
NTOG holds a number of assets in partnership with HPI: the Boxberger prospect, Bloom prospect, and Hoffman property. All of them are in Kansas, and have gas as well as oil reserves.
Recent months have seen newsflow on all these assets. At the start of November, the company announced new, upgraded reserves estimates for the Bloom prospect.…
