REG - Nostra Terra O&G Co - Half-year Report
28/09/2023 07:00
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RNS Number : 9069N Nostra Terra Oil & Gas Company PLC 28 September 2023
28 September 2023
Nostra Terra Oil and Gas Company PLC
Interim Results for the six months ended 30 June 2023
Nostra Terra (AIM: NTOG), the oil and gas exploration and production company
with a portfolio of assets in the USA, is pleased to announce its unaudited
results for the six-month period ended 30 June 2023. A copy of the Interim
Results is available on the Company's website, www.ntog.co.uk
(http://www.ntog.co.uk/) .
Financial Highlights
· $1,472,000 Revenue for the period (30 June 2022: $2,003,000)
· $530,000 Gross profit from operations for the period (30 June 2022:
$1,203,000 profit)
· $481,000 profit before non-cash items (depletion, depreciation,
amortisation, and interest)
· $48,000 profit for the period (30 June 2022: $203,000 loss)
· 21,023 barrels of oil total production for the period (30 June 2022:
20,383 barrels of oil)
· Borrowing increased to $4,203,000, an increase of $317,000 vs. 31
December 2022
Post-period events:
· Favourable ruling regarding Fouke Wells increasing the production
limit to 126 bopd per well (50%+) as announced on 30 August 2023
Chairman's report
The first six months of 2023 have been a period of consolidation and prudent
progress for Nostra Terra Oil & Gas.
In the wider world, the war in Ukraine continued, though the global pandemic
crisis has finished with the end of lockdowns in China. This was supposed to
release pent-up demand for energy in China as their economy fired back up. It
has yet to happen for a variety of reasons. However, a global increase in
energy demand and continuing effects from the war mean that the WTI spot
benchmark price has strengthened to around $90 per barrel at the time of
writing.
The Company continued to take advantage of these relatively high oil prices
throughout the period to concentrate on optimising production from our
existing producing wells. Toward that end, a further four workovers at Pine
Mills were carried out to continue supporting production volumes and revenues.
Despite some well-specific operational issues, Nostra Terra produced an
operating profit for the period of $176,000 ($48,000 after financing costs).
In March 2023, Jeffrey Henry LLP was replaced by MAH as the Company's
auditors. Jeffrey Henry no longer had sufficient capacity to service Nostra
Terra and many others of its clients' needs, and so had to withdraw from
providing audit services to several companies.
Post period, in August 2023, the Texas Railroad Commission (as regulator)
approved the operator's request for an increase in the allowable field rate
from 82 bopd to 126 bopd each for the Fouke #1 and Fouke #2 wells. This
significantly increased the cap on the production rate from the Company's two
currently most productive wells, removing a regulatory brake on our potential
revenue stream.
I would like to thank our shareholders again for their support over the last
six months.
Dr Stephen Staley
Chairman
28 September 2023
Chief Executive Officer's report
We had a strong first half of the year. Our focus has been on increasing cash
flow. This was achieved by maintaining production levels and keeping operating
costs low.
Revenue was robust at $1,472,000 for the period (30 June 2022: $2,003,000).
Gross profit from operations for the period was $530,000 (30 June 2022:
$1,203,000 profit). Average oil sales prices during the period were $70.04 per
barrel (30 June 2022: $98.28), and average production was 116 bopd (2022: 112
bopd)
At the beginning of 2022, the Fouke 2 (32.5% WI) well was drilled and put into
production. The well was then tested and flowed at a rate of 145 bopd over a
24-hour period with 0% watercut and placed into continuous production. This
production rate exceeded that of the offset Fouke 1 well by 77% because the
Fouke 1 had been limited by field rules ("allowable") to 82 bopd per well. As
a result of the past performance of the Fouke 1 and the test rate of the Fouke
2, the operator requested a substantial increase in the field allowable rate
so that both wells could be produced at higher and more efficient rates. The
hearing took place in March 2023, with the final order granting the proposed
changes being approved in August 2023.
Due to the excellent returns from these wells, Nostra Terra continues to look
for similar opportunities in the Company's 100% working interest acreage in
Pine Mills. We have let our application for Tunisian acreage lapse for now but
maintain good relations with the authorities there and may recommence the
process in due course. Additionally, the Company continues actively seeking
and assessing new opportunities within the US and abroad.
I wish to extend a sincere thank you to our shareholders for your continued
support, and I look forward to updating you as we continue to grow our
Company.
Matt Lofgran
Chief Executive Officer
28 September 2023
For further information, visit www.ntog.co.uk or contact:
Nostra Terra Oil and Gas Company plc +1 480 993 8933
Matt Lofgran, CEO
Beaumont Cornish Limited +44 (0) 20 7628 3396
(Nominated Adviser)
James Biddle / Roland Cornish
Novum Securities Limited (Broker) +44 (0) 207 399 9425
Jon Belliss
Nostra Terra Oil and Gas Company plc
Consolidated Income Statement
for the six months ended 30 June 2023
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 31 December 2022
2023 2022
Note $'000 $'000 $'000
Revenue 1,472 2,003 4,021
Cost of sales
Production Costs (647) (581) (1,779)
Well impairment - - (897)
Depletion, depreciation, amortisation (295) (219) (539)
Total cost of sales (942) (800) (3,215)
GROSS PROFIT 530 1,203 806
Exploration costs written off - (813) -
Share based payment (40) (80) (156)
Administrative expenses (319) (478) (1,074)
Foreign exchange (loss)/gain 5 (25) 26
OPERATING PROFIT/ (LOSS) 176 (193) (398)
Finance costs (138) (49) (199)
Other income 10 39 51
INCOME/ (LOSS) BEFORE TAX 48 (203) (546)
Income tax - - -
INCOME/ (LOSS) FOR THE PERIOD 48 (203) (546)
Attributed to:
Owners of the company 48 (203) (546)
Earnings per share expressed in cents per share:
Continued Operations
Basic (cents per share) 3 0.006 (0.03) (0.07)
Diluted (cents per share) 3 0.005 (0.03) (0.07)
The Group's operating profit or loss arose from continuing operations.
There were no recognised gains or losses other than those recognised in the
income statement above.
Nostra Terra Oil and Gas Company plc
Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2023
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 31 December 2022
2023 2022
$'000 $'000 $'000
INCOME (LOSS) FOR THE PERIOD 48 (203) (546)
Other comprehensive income:
Currency translation differences 6 - - -
Total comprehensive income for the period 48 (203) (546)
Total comprehensive income attributable to:
Owners of the company 48 (203) (546)
Nostra Terra Oil and Gas Company plc
Consolidated Statement of Financial Position as at 30 June 2023
Unaudited Unaudited Audited
As at 30 June As at 30 June As at 31 December 2022
2023 2022
Note $'000 $'000 $'000
ASSETS
Non-current assets
Intangible assets 2,519 2,328 2,224
Property, plant and equipment 1,215 1,119 1,308
- oil and gas assets
3,734 3,447 3,532
Current assets
Trade and other receivables 571 650 558
Deposits and prepayments 64 16 66
Cash and cash equivalents 125 114 132
760 780 756
LIABILITIES
Current liabilities
Trade and other payables 761 1,153 1,051
Borrowings 164 273 94
925 1,426 1,145
NET CURRENT LIABILITIES (165) (646) (389)
Non-current liabilities
Decommissioning liabilities 361 321 340
Borrowings 4,203 3,295 3,886
4,564 3,616 4,226
NET LIABILITIES (995) (815) (1,083)
EQUITY AND RESERVES
Share capital 4 8,142 8,142 8,142
Share premium 22,115 22,115 22,115
Translation reserve (676) (676) (676)
Share option reserve 463 386 423
Retained losses (31,039) (30,782) (31,087)
(995) (815) (1,083)
Nostra Terra Oil and Gas Company plc
Consolidated cash flow statement
For the six months ended 30 June 2023
Unaudited Unaudited Audited
Six months to 30 June 2023 Six months to Year to
30 June 2022 31 December 2022
Notes $'000 $'000 $'000
Cash flows from operating activities
Operating income (loss) for the period
48 (203) (546)
Adjustments for:
Depreciation of property, plant and equipment 154 113 299
Amortisation of intangible assets 121 87 202
Exploration costs written off - 813 -
Well impairment - - 897
Depletion 21 19 38
Other Income (10) (39) (51)
Foreign exchange (5) 25 26
Share based payment 40 80 156
Operating cash flows before movements in working capital 369 895 1,021
(Increase) /decrease in receivables (13) (302) (211)
(Decrease)/increase in payables (295) 208 105
(Increase)/decrease in deposits and prepayments 2 - (50)
Interest paid 138 49 199
Net cash generated by operations 201 850 1,064
Cash flows from investing activities
Purchase of intangible assets (416) (1,214) (1,318)
Purchase of plant and equipment (64) (345) (719)
Disposals 2 30 40
Increase in decommissioning liabilities 21 19 38
Net cash from investing activities (457) (1,510) (1,959)
Cash flows from financing activities
Proceeds from issued share capital - 194 194
Net borrowing 387 591 1,003
Finance costs (138) (49) (199)
Lease payments - (7) (16)
Net cash from financing activities 249 729 982
Increase/(decrease) in cash and cash equivalents (7) 69 87
Cash and cash equivalents at the beginning of the period 132 45 45
Cash and cash equivalents at the end of the period 125 114 132
Nostra Terra Oil and Gas Company plc
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2023
Share Deferred shares Share Share option reserve Translation reserve Retained losses Total
capital premium
$'000 $'000 $'000 $'000 $'000 $'000 $'000
As at 1 January 2023 1,593 6,549 22,115 423 (676) (31,087) (1,083)
Income for the period - - - - - 48 48
Share based payments - - - 40 - - 40
As at 30 June 2023 1,593 6,459 22,115 463 (676) (31,039) (995)
Share Deferred shares Share Share option reserve Translation reserve Retained losses Total
capital premium
$'000 $'000 $'000 $'000 $'000 $'000 $'000
As at 1 January 2022 1,538 6,549 21,976 306 (676) (30,579) (886)
Loss for the period - - - - - (203) (203)
Shares issued, net of expenses 55 - 139 - - - 194
Share based payments - - - 80 - - 80
As at 30 June 2022 1,593 6,549 22,115 386 (676) (30,782) (815)
Share Deferred shares Share Share option reserve Translation reserve Retained losses Total
capital premium
$'000 $'000 $'000 $'000 $'000 $'000 $'000
As at 1 January 2022 1,538 6,549 21,976 306 (676) (30,579) (886)
Loss for the year - - - - - (546) (546)
Shares issued, net of expenses 55 - 139 - - - 194
Expired options & warrants - - - (38) - 38 -
Share based payments - - - 155 - - 155
As at 31 December 2022 1,593 6,549 22,115 423 (676) (31,087) (1,083)
Nostra Terra Oil and Gas Company plc
Notes to the interim report
For the six months ended 30 June 2023
1. General Information
Nostra Terra Oil and Gas Company plc (Nostra Terra) is a company incorporated
in England and Wales and quoted on the AIM market of the of the London Stock
Exchange (ticker: NTOG). The principal activity of the group is disclosed as
described in the report Chairman's statement and Chief Executive Officer's
Report.
2. Basis of preparation
The consolidated interim financial information for the 6 months to 30 June 2023 has been prepared in accordance with the measurement and recognition principles of UK adopted international accounting standards and accounting policies that are consistent with the Group's Annual report and Accounts for the year ended 31 December 2022 and that are expected to be applied in the Group's Annual Report and Accounts for the year ended 31 December 2023. They do not include all of the information required for the full financial statements and should be read in conjunction with the 2022 Annual Report and Accounts which were prepared in accordance with UK adopted international accounting standards.
The comparative financial information for the year ended 31 December 2022 in this interim report does not constitute statutory accounts for that period under section 435 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2022 have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors contained a "material uncertainty related to going concern" paragraph but the auditor's report did not contain any statement under section 498 of the Companies Act 2006.
Going concern
The consolidated interim financial information has been prepared on the assumption that the Group is a going concern. When assessing the foreseeable future, the directors have looked at a period of 12 months from the date of approval of this report.
The Group's forecasts and projections, taking account of reasonable possible changes in trading performance, show that the group should be able to operate within the level of its current cash resources, however a material uncertainty exists in relation to the Group's ability to repay its liabilities as they become due. We note that as at the balance sheet date, the Group has net current liabilities of $165k and net liabilities of $995k.
After making enquiries, the directors have a reasonable expectation that the Company and Group have adequate resources to continue in operational existence for the foreseeable future. They continue to adopt the going concern basis in preparing the consolidated interim financial information, however as noted above a material uncertainty exists which may cast significant doubt on the Group's ability to continue operating as a going concern.
3. Earnings/(loss) per share
The calculation of earnings per ordinary share is based on earnings after tax and the weighted average number of ordinary shares in issue during the period. For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The group had two classes of dilutive potential ordinary shares, being those share options granted to employees and suppliers where the exercise price is less than the average market price of the group's ordinary shares during the year, and warrants granted to directors and one former adviser.
Unaudited Unaudited Audited
Six months to Six months to Year to 31 December 2022
30 June 2023 30 June 2022
Income (loss) per ordinary shareholders ($000) 48 (203) (546)
Weighted average number of ordinary shares 746,520,534 718,736,004 732,742,452
Basic (cents per share) 0.006 (0.04) (0.07)
Diluted (cents per share) 0.005 (0.04) (0.07)
4. Share Capital
The issued share capital as at 30 June 2023 was 746,520,534 ordinary shares of 0.1p each (31 December 2022: 746,520,534; 30 June 2022: 746,520,534).
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