REG - Nostra Terra O&G Co - Fouke #2 Payback in Under 3 Months

Nostra Terra Oil and GasAnnouncement

01/08/2022 07:00

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RNS Number : 4013U  Nostra Terra Oil & Gas Company PLC  01 August 2022

1 August 2022

 

Nostra Terra Oil and Gas Company Plc

("Nostra Terra" or "the Company")

 

Fouke #2 Payback in Under 3 Months

 

 

Nostra Terra (AIM: NTOG), the international oil & gas exploration and
production company with a portfolio of production and development assets in
Texas, USA, is pleased to announce that the Fouke #2 well (NTOG 32.5% WI) has
reached payback (recovery of all drilling and drilling-related costs from net
cashflow) less than 3 months from production start-up. This is considerably
ahead of pre-drill expectations due to a combination of higher realised oil
prices and a production rate that is 70% greater than originally forecast.

 

The production rate at the Fouke #2 remains at 140 bopd, experiencing no
decline since start-up and is 100% oil.  The Fouke #1 is also producing 100%
dry oil at a rate of 110 bopd, which is the maximum supported by the current
surface production equipment. These production rates will be maintained so
that the operator can collect technical data to support its request for an
increased "field allowable rate", a maximum recovery rate applicable to the
longer term.  A hearing with the relevant authority on changing the field
allowable rate, currently 82 bopd, has been requested but not yet scheduled.

 

The Company has completed additional technical work in the farmout area, using
information obtained from the Fouke #1 and #2 wells.  Based upon the results
of this analysis the Company has initiated discussions with the Fouke operator
on a 3(rd) well in the farmout area. These technical discussions are on-going
and will continue until the results of the field allowable rate hearing are
known, after which a decision on the 3(rd) well will be made.

 

 The Company has also commenced a 5 well work-over program in the Pine Mills
oilfield, focused on returning to production several wells that had been shut
in due to mechanical issues.  Finally, the Company has also completed a
technical study on optimising water handling in the field and plans to
implement the report recommendations as part of the work-over program to
further increase production in the Pine Mills oilfield.

 

Matt Lofgran, Nostra Terra's Chief Executive Officer, said:

 

"Both the Fouke #1 and Fouke #2 wells have been very strong producers, adding
significant cashflow to the Company. These results highlight some of the
opportunities that exist in the Pine Mills Field. Nostra Terra whilst having a
WI of 32.5% at the Fouke wells, owns a 100% working interest in 2,320 acres
and continues to develop additional opportunities to grow production from this
field.

 

Additionally, planning, and technical work continues on our West Texas asset
to select a location for our next drilling opportunity.  Long lead items are
being ordered and drilling contractors contacted to firm up the timing of the
next well in this area. All current growth initiatives in our portfolio are
anticipated to be funded internally, without need for dilution.

 

It's been a great year for the Company so far with a strong increase in cash
flows and production rates and I am looking forward to reporting on the
results of our current activities in future periods."

 

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK Domestic
Law by virtue of the European Union (Withdrawal) Act 2018. Upon the
publication of this announcement, this inside information is now considered to
be in the public domain.

 

For further information, contact:

 Nostra Terra Oil and Gas Company plc          Tel:   +1 480 993 8933

 Matt Lofgran, CEO

 Beaumont Cornish Limited                      Tel:   +44 (0) 20 7628 3396

 (Nominated Adviser)

 James Biddle/ Roland Cornish

 Novum Securities Limited (Broker)             Tel:   +44 (0) 207 399 9425

 Jon Belliss

                                               Tel:    +44 (0) 7791 892509

 Lionsgate Communications (Public Relations)

 Jonathan Charles

 

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.

 

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