REG - Nostra Terra O&G Co - Operations Update

Nostra Terra Oil and GasAnnouncement

08/11/2021 07:05

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20211108:nRSH5704Ra&default-theme=true

RNS Number : 5704R  Nostra Terra Oil & Gas Company PLC  08 November 2021

8 November 2021

 

Nostra Terra Oil and Gas Company Plc

("Nostra Terra" or "the Company")

 

Operations Update

 

 

Nostra Terra (AIM: NTOG), the oil & gas exploration and production company
with a portfolio of development and production assets in Texas, USA, is
pleased to provide an operations udate regarding increased production and
further drilling plans. The production update provided is on the basis that
the Company, given its increasing production profile, will now move to
reporting production on a quarterly basis.

 

Highlights

 

·    19% increase in production in the third quarter (100 net bopd
compared to the average 84 net bopd in H1 2021)

·    53 % increase in production over the last two weeks (128 net bopd
compared to the average 84 net bopd in H1 2021)

·    New development well planned at Pine Mills (NTOG 32.5% Working
Interest)

·    Additional field infrastructure work planned at Pine Mills

·    Planning underway for new wells in Permian Basin

·    Change from Half-yearly to quarterly production reporting going
forward

 

 

Operations

During the third quarter, well uptime improved, increasing average daily
production by 19% from the first half of this year (to 100 net bopd). Since
then continued work has brought more wells online and over the past two weeks
average production is up by 53% from the first half of this year (to 128 net
bopd). Whilst the Company is very encouraged by this continued improvement in
production, rates may fluctuate throughout the period and this figure should
not be taken as a guide as to the expected average daily production over the
fourth quarter. Further work on existing wells and improvements to
infrastructure are ongoing as the Company aims to further optimize production
with minimal additional expenditure. Quarterly production will be reported
following the period end, as advised above.

 

Pine Mills

The Company executed a farmout agreement with Cypress for an undrilled 80-acre
portion of Pine Mills in 2020. The Farmout Well was successfully drilled at
the end of 2020 and put into production in January 2021. The well continues to
produce at strong levels with no decline. The initial well was added as
collateral to Nostra Terra's Senior Lending Facility which provided
non-dilutive funds to finance further drilling activity.

 

The partners decided to lease additional acreage in order to increase the area
near the next planned well. Preparations to drill a second well (NTOG  32.5%
Working Interest) are now moving forward. Further updates will be made on the
progress.

 

Permian Basin

A re-completion is scheduled this month in a well that was never fully
completed. This is in a new zone that is otherwise prolific in the area. If
successful, this could add low-cost production while also creating additional,
similar future opportunities.

 

As Company cashflow has significantly improved, it is intended to accelerate
growth by drilling new development wells. Planning is underway in the same
proven area of the Permian Basin. The Company anticipates operating with at
least 90% working interest, giving it more control over timing.

 

The Company continues to work towards diversifying our asset base by adding
prospective exploration acreage outside the US. This is potentially via a
large Tunisian block as previously announced on 21 April 2021, comprising
existing discoveries and highly attractive exploration acreage. The Company
is currently working to finalise the permit agreements.

 

 

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

 

"Throughout the year we've been increasing production. We're planning to
increase that pace of growth (through existing resources) by drilling a new
offset well to the very successful well drilled by Cypress and put in
production in January this year, by recompleting an existing well in the
Permian Basin, and drilling new wells in the prolific Permian Basin.

 

We took the opportunity during the down cycles to expand our portfolio with
assets that provide development opportunities. As a cashflow positive group,
any incremental production is 100% free cashflow (which will also go to
increasing our Senior Facility, allowing the facility to grow).

 

We're now in a virtuous cycle, where we can re-invest cashflow to further
increase our growth rate. This can be further accelerated with use of our
non-dilutive senior facility to deploy more capital.

 

With strong oil prices this means good cashflow and a great time to be adding
new production."

 

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          Email:  +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

 Lionsgate Communications (Public Relations)   Tel:    +44 (0) 7791 892509

 Jonathan Charles

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDBXBDBCBGDGBR