REG - Nostra Terra O&G Co - Fouke 2 Production Rates Exceed Expectations

Nostra Terra Oil and GasAnnouncement

16/05/2022 07:00

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RNS Number : 5273L  Nostra Terra Oil & Gas Company PLC  16 May 2022

16 May 2022

 

Nostra Terra Oil and Gas Company Plc

("Nostra Terra" or "the Company")

 

Fouke 2 Production Rates Exceed Expectations

Significant Increase in Free Cash Flow

 

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), at
the Company's Pine Mills oil field in east Texas, has been completed, tested
and is now on production.

 

Highlights:

 

·    Fouke 2 well producing at 145 bopd greatly exceeding internal
expectations

o  77% higher than Fouke 1 current production rate

o  100% oil, no water

·    Oil sales from the Fouke 2 have commenced

·    Both Fouke wells to produce at higher levels while permanent
allowable increase is sought;

·   Increased production rate from both Fouke wells would represent a circa
40% increase in net production based on Q4 2022 average bopd

·    Significant increase in Company's free cashflow due to increased
production, higher prices

·    Grant East #1 well being completed

 

 

The Fouke 2 well was completed in two reservoir sections within the Cretaceous
Woodbine Formation.  A total of 23 ft of pay was perforated within these two
sequences only, one of which was found in the offset Fouke 1 well.  After
completion, the well was tested and flowed at a rate of 145 bopd over a 24-
hour period with a 0% watercut. The well has now been placed into continuous
production and oil sales from the Fouke 2 have commenced. This production rate
exceeds that of the offset Fouke 1 well by 77% which has been limited by field
rules (allowable) to 82 bopd per well.  For more than a year the Fouke 1 has
produced oil at this allowable rate without decline and not produced any
water.

 

As a result of the past performance of the Fouke 1 and the test rate of the
Fouke 2, the operator plans to request a substantial increase in the field
allowable rate so that both wells can be produced at much higher and more
efficient rates. A decision is anticipated later in the year. During the
interim period the operator plans to produce each well at circa 140 bopd,
which is above the current allowable cap, to obtain sufficient technical
information to support the increased field allowable.

 

The Company also is pleased to announce, following completion of the Fouke 2
well, a substantial increase in average monthly net operating cashflow is
anticipated.  This is due to a combination of increased production from the
Fouke wells combined with recent high oil prices.  The Company is
anticipating that free cash flow for the remainder of the year will be in
excess of original internal budget forecasts as a result.

 

Finally in West Texas, the Company's Grant East #1 well (NTOG 100% WI) was
fracture stimulated last week and will continue being completed this week.
Work on the production facilities is underway and is expected to be completed
in the near term.

 

 

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

 

"We are very pleased with the results of the Fouke 2 test and the plans by the
operator to seek a substantial increase in the field production allowable.
The Fouke 2 production will have a very positive impact on our cash flow.
Given the performance of these wells we anticipate that a substantial
allowable increase will be approved which will result in a further step change
increase in our cash flow performance.  Finally, I am looking forward to the
results of the Grant East 1 completion and simulation activity concurrent with
the completion of the field facilities.  It's been an active period for the
company recently and I look forward to reporting additional results of our
efforts in due course."

 

 

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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