REG - Nostra Terra O&G Co - Interim Results for the period ended 30 June 2022
30/09/2022 07:01
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RNS Number : 2455B Nostra Terra Oil & Gas Company PLC 30 September 2022
30 September 2022
Nostra Terra Oil and Gas Company PLC
("Nostra Terra", "NTOG" or the "Company")
Interim Results for the six months ended 30 June 2022
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 2022. A copy of the Interim
Results is available on the Company's website, www.ntog.co.uk
(http://www.ntog.co.uk)
Financial Highlights
· 108% increase in Revenue for the period to $2,003,000 (30 June 2021:
$963,000).
· 381% increase in Gross profit from operations for the period to
$1,203,000 (30 June 2021: $250,000 profit).
· 34% increase in total production for the period to 20,383 barrels oil
(30 June 2021: 15,211 barrels oil)
o Average production during first half at 112 bopd net to Nostra Terra
(2021: 84 bopd)
o 50% reduction in Finance costs for the period
· Sr. Lending Facility borrowing base increased by 43% from $2,350,000
to $3,350,000
· Fouke #2 well completed and put into production (mid-May)
o Production surpassed management expectations
· Grant East lease acquired and first well drilled
Post-period events:
· Fouke #2 well reached payback in under 3 months
Chairman's report
The first half of 2022 saw Nostra Terra continue to make good progress in
implementing its strategy of realising value from its existing Texas based
assets - this has translated into a stronger financial performance.
The ongoing war in Ukraine has kept global energy prices relatively high. This
effect is more marked for some fuels than others, notably European gas which
is heavily reliant on Russian imports. Though WTI prices have fallen somewhat
over the last months, they remain high relative to long term averages. This is
anticipated to persist for some time and hence the Company believes it is
prudent to continue with its current strategy.
The cashflow produced by the combination of high oil prices and our increased
production volumes has allowed Nostra Terra to retire a substantial proportion
of its higher-cost debt over the reporting period. The Board had previously
identified this as an area where expenditures could be used to good effect on
our cost base, helping reduce our finance costs by approximately 50% versus H1
2021 levels.
The Company's cashflow was also used to drill both the Fouke #2 and Grant East
#1 wells in H1 2022. Fouke #2 continued the history of good oil flow rates
from Pine Mills wells with a stable rate of 140 bbls/day. The Texas Railroad
Commission, as local regulator, has been petitioned to have the production
limit increased to allow this well and Fouke #1 to produce at higher daily
rates. Grant East #1 proved less forthcoming, this was due to the completion
rather than a fundamental reservoir issue, however, the lessons learnt from it
and the data that it produced provide very useful insights into planning
future wells in the area.
In a very tight rig market, workover jobs on five existing Pine Mills have
been planned. Two of these wells are now complete and scheduled to be put
online shortly, leaving three wells to be completed in the next reporting
period. We anticipate that these workovers will lead to a further increase
production from this prolific area.
Given the success in the field, resulting in a significant increase in
production and combined with stronger commodity prices, we anticipate that our
proven reserves will significantly increase. We are in the process of having
those estimates prepared by a third-party engineering firm and will publish
the results in due course.
We continue to assess new upstream opportunities, both in the US and
elsewhere.
We were pleased to welcome Paul Welch as a non-executive director in February
this year. Paul brings with him excellent and highly relevant knowledge and
experience.
I would like to thank our shareholders for their continued support over the
past half year and look forward to updating you on further developments in the
future.
Dr Stephen Staley
Chairman
29 September 2022
Chief Executive Officer's report
We had a great first half of the year, delivering on our plans. Our focus has
been on increasing cashflow, which we did through a combination of increasing
revenues, while lowering our production and finance costs.
We had a record period with over $2 million in revenue which is the highest in
the Company's history. More importantly our gross profit was $1.2 million
(over $1.4 million after non-cash items), representing a 381% increase, also a
record for the Company. Average oil sales prices during the period were $98.28
per barrel.
The Fouke #2 well was drilled and put into production mid-May (only
contributing to circa 1.5 months of the 6 months of figures). It significantly
exceeded expectations, surpassing even the performance of the Fouke #1 well.
Pine Mills has been a great asset for the Company, and we are actively
reviewing additional opportunities within our existing leases with similar
potential to the Fouke wells.
The Grant East lease was acquired during the period, providing over a dozen
drilling locations. The Grant East #1 well was drilled but, as announced in
June, flowed an excessive amount of water which impeded the flow of oil in
commercial quantities. At a cost of $813,000 this contributed significantly to
the loss reported for the period. The well results are being analysed to
improve the completion technique for future wells. The Grant East lease,
located in the Permian Basin, is a prolific area and adjacent to other wells
that Nostra Terra has successfully drilled and completed previously.
We had a record period even while some wells were off-line due to the
expansion work on the production facilities at Pine Mills. The primary
objective being to increase the capacity of the water injection and disposal
system through workovers and recompletions of the injection wells. This work
is anticipated to be complete this month after which the off-line wells will
be returned to production and the pump rates at currently producing wells will
be increased resulting in a further increase in production from this asset.
Finally, and most importantly, this record period has been achieved using only
existing resources. As cashflow is now increasing at the fastest rate in the
Company's history, the funds generated are being reinvested into growth
opportunities while we retire our higher-priced debt. We also anticipate the
strong cashflow to continue, resulting in a profit for the full year.
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
29 September 2022
For further information, visit www.ntog.co.uk (http://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
Lionsgate Communications (Public Relations) +44 (0) 7791 892509
Jonathan Charles
Nostra Terra Oil and Gas Company plc
Consolidated Income Statement
for the six months ended 30 June 2022
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 31 December 2021
Note 2022 2021
$'000 $'000 $'000
Revenue 2,003 963 2,282
Cost of sales
Production Costs (581) (687) (1,708)
Depletion, depreciation, amortisation (219) (26) (400)
Total cost of sales (800) (713) (2,108)
GROSS PROFIT 1,203 250 174
Exploration costs written off (813) - -
Share based payment (80) (107) (68)
Administrative expenses (478) (316) (910)
Foreign exchange (loss)/gain (25) 2 (130)
OPERATING LOSS (193) (171) (934)
Finance costs (49) (98) (175)
Other income 39 - 21
LOSS BEFORE TAX (203) (269) (1,088)
Income Tax - - -
LOSS FOR THE PERIOD (203) (269) (1,088)
Attributed to:
Owners of the company (203) (269) (1,088)
Earnings per share expressed in pence per share:
Continued Operations
Basic & Diluted (cents per 3
share)
(0.03) (0.04) (0.16)
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 2022
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 31 December 2021
2022 2021
$'000 $'000 $'000
LOSS FOR THE PERIOD (203) (269) (1,088)
Other comprehensive income:
Currency translation differences 6 - - -
Total comprehensive income for the period (203) (269) (1,088)
Total comprehensive income attributable to:
Owners of the company (203) (269) (1,088)
Nostra Terra Oil and Gas Company plc
Consolidated Statement of Financial Position as at 30 June 2022
Unaudited Unaudited Audited
As at 30 June As at 30 June As at 31 December 2021
2022 2021
Note $'000 $'000 $'000
ASSETS
Non-current assets
Intangible assets 2,328 2,036 2,014
Property, plant and equipment 1,119 944 918
- oil and gas assets
3,447 2,980 2,932
Current assets
Trade and other receivables 650 435 348
Deposits and prepayments 16 31 16
Cash and cash equivalents 114 162 45
780 628 409
LIABILITIES
Current liabilities
Trade and other payables 1,153 622 948
Borrowings 273 699 518
Lease liabilities - 16 -
1,426 1,337 1,466
NET CURRENT LIABILITIES (646) (709) (1,057)
Non-current liabilities
Decommissioning liabilities 321 266 302
Borrowings 3,295 2,072 2,459
Lease Liabilities - - -
3,616 2,338 2,761
NET LIABILITIES (815) (67) (886)
EQUITY AND RESERVES
Share capital 4 8,142 8,076 8,087
Share premium 22,115 22,044 21,976
Translation reserve (676) (676) (676)
Share option reserve 386 249 306
Retained losses (30,782) (29,760) (30,579)
(815) (67) (886)
Nostra Terra Oil and Gas Company plc
Consolidated cash flow statement
For the six months ended 30 June 2022
Unaudited Unaudited Audited
Six months to 30 June 2022 Six months to Year to
30 June 2021 31 December 2021
Notes
$'000 $'000 $'000
Cash flows from operating activities
Operating loss for the period
(203) (269) (1,088)
Adjustments for:
Depreciation of property, plant and equipment 113 8 208
Amortisation of intangible assets 87 - 173
Exploration costs written off 813
Depletion 19 - 38
Other Income (39) - (21)
Foreign Exchange 25 - -
Share based payment 80 107 68
Operating cash flows before movements in working capital 895 (154) (622)
(Increase) /decrease in receivables (302) (94) 66
(Decrease)/increase in payables 208 49 285
(Increase)/decrease in deposits and prepayments - 11 26
Interest paid 49 98 175
Cash generated/ (consumed) by operations 850 (90) (70)
Cash flows from investing activities
Purchase of intangible assets (1,214) (9) (160)
Purchase of plant and equipment (345) (172) (346)
Disposals 30 - -
Increase in decommissioning liabilities 19 - 36
Net cash from investing activities (1,510) (181) (470)
Cash flows from financing activities
Proceeds from issued share capital 194 756 794
Cost of shares issued - (62) (61)
Net borrowing 591 (235) (29)
Finance costs (49) (98) (175)
Lease payments (7) - (16)
Net cash from financing activities 729 361 513
Increase/(decrease) in cash and cash equivalents 69 90 (27)
Cash and cash equivalents at the beginning of the period 45 72 72
Cash and cash equivalents at the end of the period 114 162 45
Nostra Terra Oil and Gas Company plc
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2022
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)
Total comprehensive loss for the year - - - - - (203) (203)
Shares issued 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 2021 1,369 6,549 21,508 142 (676) (29,491) (599)
Loss for the period - - - - - (269) (269)
Total comprehensive loss for the year - - - - - (269) (269)
Shares issued, net of expenses 158 - 536 - - - 694
Share based payments 107 107
As at 30 June 2021 1,527 6,549 22,044 249 (676) (29,760) (67)
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 2021 1,369 6,549 21,508 142 (676) (29,491) (599)
Loss for the year - - - - - (1,088) (1,088)
Total comprehensive loss for the year - - - - - (1,088) (1,088)
Shares issued, net of expenses 169 - 468 - - - 637
Share based payments - - - 164 - - 164
As at 31 December 2021 1,538 6,549 21,976 306 (676) (30,579) (886)
Nostra Terra Oil and Gas Company plc
Notes to the interim report
For the six months ended 30 June 2022
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
These financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations issued by the International Accounting Standards Board (IASB) as adopted by the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention. This interim financial information for the six months ended 30 June 2022 was approved by the Board on 28 September 2022.
The unaudited results for the six months ended 30 June 2022 do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The comparative figures for the 12 months ended 31 December 2021 are extracted from the statutory financial statements which have been filed with the Registrar of Companies and which contain an unqualified audit report, which did however draw attention to a material uncertainty relating to going concern and contained no statement under Section 498 (2) or (3) of the Companies Act 2006.
Copies of this interim statement are available from the Company at its registered office at Salisbury House, London Wall, London, United Kingdom, EC2M 5PS. The interim statement will also be available on the Company's website www.ntog.co.uk in accordance with Rule 26 of the AIM Rules for Companies
3. 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 2021
30 June 2022 30 June 2021
Loss per ordinary shareholders ($000) (203) (269) (1,088)
Weighted average number of ordinary shares 718,736,004 686,349,263 692,287,657
Basic and diluted (cents per share) (0.04) (0.04) (0.16)
4. Share Capital
The issued share capital as at 30 June 2022 was 746,520,534 ordinary shares of 0.1p each (31 December 2021: 703,520,534; 30 June 2021: 695,520,634).
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