REG - Nostra Terra O&G Co - Interim Results for six months ended 30 June 2024
19/09/2024 07:00
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RNS Number : 7770E Nostra Terra Oil & Gas Company PLC 19 September 2024
September 19, 2024
Nostra Terra Oil and Gas Company PLC
Interim Results for the six months ended 30 June 2024
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 2024. A copy of the Interim
Results is available on the Company's website, www.ntog.co.uk
(http://www.ntog.co.uk) .
Financial Highlights
· $938,000 Revenue for the period (30 June 2023: $1,472,000)
· $230,000 profit before non-cash items (depletion, depreciation,
amortisation and interest)
· $792,000 loss for the period (30 June 2023: $48,000 profit)
Operational and Strategic Highlights
· 12,593 barrels oil total production for the period (30 June 2023:
21,265 barrels oil)
· Change in Leadership with relevant skill set and experience; now
focusing on cashflow
· New CEO (Paul Welch) taken over from Founder after 15 years with a
clear plan for organic growth at Pine Mills
Post-period events:
· Strengthened Executive and BOD with exceptional in-depth O&G /
Permian experience
· Clear plan to improve Pine Mills' production and step-up in cash flow
by year end
· Significantly trimmed G&A: concentrating on Pine Mills while
divesting non-core assets (South & West Texas)
· On 17 July 2024, following approval at general meeting, the company
announced the subdivision of ordinary shares of £0.001 each into one Deferred
Share of £0.0009 and one Ordinary Share of £0.0001 each.
· On 29 July 2024, the company raised £450,000 (before expenses)
through a placing and subscription of 1,499,999,998 new ordinary shares.
Chairman's report
The first half of 2024 was a period of change for Nostra Terra. New
leadership and a newstrategy to focus and reinvest in our core Pine Mills
asset asset was announced in June 2024 and put into effect post period end
with the implementation of with a clear plan to increase Pine Mills'
production and step-up cash flow by year end.
Operationally, Nostra Terra operated during the first half of 2024 in an
environment of generally lower oil prices than in 2023. Despite a
strengthening of WTI prices in the first quarter of this year, they have
subsequently been on a downward path. At the time of writing, prices for WTI
October delivery sit just below $70 per barrel.
The review of existing 3D seismic data over the Pine Mills area yielded
potential new locations that could host wells with similar (highly attractive)
performance characteristics to our existing Fouke wells. These new locations
represent considerable, relatively low risk upside to our existing resource
base in the area.
Cost reduction initiatives, are expected to show an impact on the 2024
full-year results. The Pine Mills work involves enhancing or reinstating
production from a number of existing wells in a cost-effective manner. These
investments are expected to have short payback times and are also likely to
have a positive impact on the results in the second half of the current
financial year. This work is now well underway, and we hope to be able to
announce initial results in the coming weeks.
Nostra Terra's board saw several changes in the first half of this year, with
Matt Lofgran stepping down as CEO, and Paul Welch moving from non-executive
director to take on that role, Jim Newman, our largest shareholder, joined the
board as a non-executive director. Mr. Newman established his equity position
in the Company through his participation in a successful fundraise by the
Company of £300,000 in January 2024
Post period-end, we were pleased to announce the appointment of SP Angel
Corporate Finance LLP as both sole broker and as nominated advisor to the
Company. Cost reduction initiatives have also continued, with the board of
directors being focused on managing the Company's cash flow.
I would like to thank shareholders for their continued support and look
forward to updating them on further developments.
Dr Stephen Staley
Chairman
19 September 2024
Chief Executive Officer's report
Production was down in the first half of the year due to declines in the Pine
Mills wells, the sale of non-performing assets in West Texas and the cessation
of production in South Texas.
Revenue was $938,000 during the first half of the year (30 June 2023:
$1,472,000). Gross loss from operations for the period was $792,000 (30 June
2023: $48,000 profit). Average oil sales prices during the period were $74.45
per barrel (30 June 2023: $70.00 per barrel).
Production declines, which started in the second half of 2023, continued into
the reporting period. However, the issues behind the increased decline rates
have been addressed, and the field rates are now stable. Our cost reduction
initiatives started during the second half of the reporting period and post
period, have now been fully implemented. The asset disposal process
continues with two properties remaining to be sold. The initial disposal of
the West Texas assets (Coleman and Raschke) significantly reduced the
operating costs in the area. The remaining asset, the Grant lease, is now
operating profitably, and the offers received were insufficient to justify a
sale. In South Texas, two assets are in a sale process as a package and have
attracted multiple interested parties and offers but these sales have yet to
close. The Company has no further investment plans for these assets, and
they will continue to be actively marketed until they are sold.
The proceeds of the successful £450,000 fundraising, before expenses, carried
out in July 2024, are being used to fund a new strategic initiative in Pine
Mills. These funds are being used to return six currently idle wells back to
production in the Pine Mills field. There are currently two workover rigs in
the field, and two of the six planned workovers are now complete, with the
remainder expected to be complete by the end of September 2024. The target
of these first six workovers is to increase field production by 38 bopd, net
to NTOG, and I look forward to updating the market once we have evaluated the
workovers' impact.
Finally, concurrent with the technical study ongoing with the 3D seismic
review, we have also initiated a second technical study in the Fouke area to
provide pressure support. The Fouke 1 and 2 are still producing water-free
and appear to be some distance from an active aquifer. The high volumes these
wells have produced has reduced the reservoir pressure locally, and these
wells are expected to benefit from additional water injection to increase
reservoir pressure. This study aims to determine how best to increase the
reservoir pressure locally and how much this will increase production rates
and, ultimately, the reserve base.
I also wish to sincerely thank our shareholders for their continued support. I
look forward to updating you as we continue to grow our Company.
Paul Welch
Chief Executive Officer
19 September 2024
For further information, visit www.ntog.co.uk (http://www.ntog.co.uk) or
contact:
Nostra Terra Oil and Gas Company plc Email: paul@ntog.co.uk
Paul Welch, CEO
SP Angel Corporate Finance LLP Tel: +44 (0) 20 3470 0470
(Nominated Adviser and Broker)
Stuart Gledhill / Richard Hail / Adam Cowl
Celicourt Communications Tel: +44 (0) 30 7770 6424
(PR/IR) Email: NTOG@celicourt.uk
Mark Antelme / Jimmy Lea
Nostra Terra Oil and Gas Company plc
Consolidated Income Statement
for the six months ended 30 June 2024
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 31 December 2023
2024 2023
Note $'000 $'000 $'000
Revenue 938 1,472 2,816
Cost of sales
Production Costs (708) (647) (1,408)
Depletion, depreciation, amortisation (290) (295) (617)
Total cost of sales (998) (942) (2,025)
GROSS (LOSS)/PROFIT (60) 530 791
Share based payment (20) (40) (41)
Administrative expenses (532) (319) (870)
Foreign exchange (loss)/gain (7) (5) (6)
OPERATING (LOSS)/PROFIT (619) 176 (126)
Finance costs (179) (138) (368)
Other income 6 10 22
(LOSS)/PROFIT BEFORE TAX (792) 48 (472)
Income tax - - -
(LOSS)/PROFIT FOR THE PERIOD (792) 48 (472)
Attributed to:
Owners of the company (792) 48 (472)
Earnings per share expressed in cents per share:
Continued Operations
Basic (cents per share) 3 (0.08) 0.006 (0.06)
Diluted (cents per share) 3 (0.08) 0.005 (0.06)
The Group's operating 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 2024
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 31 December 2023
2024 2023
$'000 $'000 $'000
(LOSS)/PROFIT FOR THE PERIOD (792) 48 (472)
Other comprehensive income:
Currency translation differences 6 - - -
Total comprehensive income for the period (792) 48 (472)
Total comprehensive income attributable to:
Owners of the company (792) 48 (472)
Nostra Terra Oil and Gas Company plc
Consolidated Statement of Financial Position as at 30 June 2024
Unaudited Unaudited Audited
As at 30 June As at 30 June As at 31 December 2023
2024 2023
Note $'000 $'000 $'000
ASSETS
Non-current assets
Intangible assets 2,259 2,519 2,389
Property, plant and equipment 1,062 1,215 1,230
- oil and gas assets
3,321 3,734 3,619
Current assets
Trade and other receivables 687 571 548
Deposits and prepayments 11 64 28
Cash and cash equivalents 52 125 26
750 760 602
LIABILITIES
Current liabilities
Trade and other payables 1,176 761 924
Borrowings 85 164 110
1,261 925 1,034
NET CURRENT LIABILITIES (511) (165) (432)
Non-current liabilities
Decommissioning liabilities 405 361 382
Borrowings 4,319 4,203 4,319
4,724 4,564 4,701
NET LIABILITIES (1,914) (995) (1,514)
EQUITY AND RESERVES
Share capital 4 8,492 8,142 8,142
Share premium 22,130 22,115 22,115
Translation reserve (676) (676) (676)
Share option reserve 491 463 464
Retained losses (32,351) (31,039) (31,559)
(1,914) (995) (1,514)
Nostra Terra Oil and Gas Company plc
Consolidated cash flow statement
For the six months ended 30 June 2024
Unaudited Unaudited Audited
Six months to 30 June 2024 Six months to Year to
30 June 2023 31 December 2023
$'000 $'000 $'000
Cash flows from operating activities
Operating income (loss) for the period
(792) 48 (473)
Adjustments for:
Depreciation of property, plant and equipment 154 324
142
Amortisation of intangible assets 125 121 251
Depletion 23 21 42
(Profit)/Loss on disposal of Fixed Assets 11 - -
(Profit)/Loss on disposal of Intangibles 65 -
Foreign exchange loss (gain) 7 (5) 6
Share based payment 20 40 41
Other Income (6) (10) (22)
Operating cash flows before movements in working capital 369 169
(405)
(Increase) /decrease in receivables (139) (13) 19
Increase/(decrease) in payables 251 (295) (89)
Increase/(decrease) in deposits and prepayments 2 38
17
Interest paid 179 138 369
Net cash (used)/generated by operations (97) 201 506
Cash flows from investing activities
Purchase of intangible assets (25) (416) (416)
Purchase of plant and equipment (76) (64) (248)
Disposals 56 2 2
Increase in decommissioning liabilities - 21 42
Net cash from investing activities (45) (457) (620)
Cash flows from financing activities
Proceeds from issued share capital 372 - -
Net borrowing (25) 387 377
Finance costs (179) (138) (369)
Net cash from financing activities 168 249 8
Increase/(decrease) in cash and cash equivalents (7) (106)
26
Cash and cash equivalents at the beginning of the period 132 132
26
Cash and cash equivalents at the end of the period 125 26
52
Nostra Terra Oil and Gas Company plc
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2024
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 2024 1,593 6,549 22,115 464 (676) (31,559) (1,514)
loss for the period - - - - - (792) (792)
Shares issued, net of expenses 350 - 22 - - 372
Cost of warrants issued - - (7) 7 - - -
Share based payments - - - 20 - - 20
As at 30 June 2024 1,943 6,549 22,130 491 (676) (32,351) (1,914)
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 6,549 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 2023 1,593 6,549 22,115 423 (676) (31,087) (1,083)
Loss for the year - - - - - (472) (472)
Shares issued, net of expenses - - - -
Expired options & warrants - - - -
Share based payments - - - 41 - - 41
As at 31 December 2023 1,593 6,549 22,115 464 (676) (31,559) (1,514)
Nostra Terra Oil and Gas Company plc
Notes to the interim report
For the six months ended 30 June 2024
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 2024 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 2023 and that are expected to be applied in the Group's Annual Report and Accounts for the year ended 31 December 2024. They do not include all of the information required for the full financial statements and should be read in conjunction with the 2023 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 2023 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 2023 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.
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 2023
30 June 2024 30 June 2023
(Loss)/earnings per ordinary shareholders ($000) (792) 48 (472)
Weighted average number of ordinary shares 1,006,410,644 746,520,534 746,520,534
Basic (cents per share) (0.08) 0.006 (0.06)
Diluted (cents per share) (0.08) 0.005 (0.06)
4. Share Capital
The issued share capital as at 30 June 2024 was 1,021,520,534 ordinary shares of 0.1p each (31 December 2023: 746,520,534; 30 June 2023: 746,520,534).
5. Subsequent events
On 17 July 2024, following approval at general meeting, the company announced the subdivision of ordinary shares of £0.001 each into one Deferred Share of £0.0009 and one Ordinary Share of £0.0001 each.
On 29 July 2024, the company raised £450,000 (before expenses) through a placing and subscription of 1,499,999,998 new ordinary shares.
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