REG - Nostra Terra O&G Co - Substantial increase in Senior Facility

Nostra Terra Oil and GasAnnouncement

16/12/2022 07:00

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RNS Number : 9209J  Nostra Terra Oil & Gas Company PLC  16 December 2022

 

 

16 December 2022

 

Nostra Terra Oil and Gas Company Plc

("Nostra Terra" or "the Company")

 

Substantial increase in Senior Facility

 

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 a significant expansion in its Senior
Lending Facility ("Senior Facility" or "Facility"), along with an increase in
the Company's asset value.

 

 

Highlights

 

Senior Facility

·    Borrowing Base increase to $4,350,000 (from $3,350,000 on 28 March
2022), a 30% increase vs March 2022

·    Interest Rate: 6.50% (previously 4.40%)

 

WAFD Valuation

·    Future Net Income: $34,350,110 a 6% increase vs March 2022

·    NPV10: $17,196,390 an 18% increase vs March 2022

 

 

Senior Facility & Corporate Valuation

The Company has received a large increase in the borrowing base, providing it
with access to additional non-dilutive capital which is available to
supplement cash flow from operations and to further its growth plans.

 

WAFD, the provider of the Facility, estimate of Future Net Income has
increased by 6% whilst Net Present Value (at a 10% discount rate) has
increased by 18% since the prior redetermination in March 2022. The Borrowing
Base of the $10,000,000 Senior Facility has been increased to US$4,350,000
based on improved production during the first half of 2022, hence an
additional US$1,000,000 is available for utilisation compared with 28 March
2022. As at 30 June 2022, the Company had drawn down $3,235,000 under the
Senior Facility.

 

The size of the Facility and Borrowing Base will continue to be reassessed at
least twice yearly. The Board anticipates the Facility and Borrowing Base will
continue to expand as the Company's production, cashflows and reserves
increase. The current interest rate on the facility is 6.5%. The Facility is
not restricted to any geographical region and can expand further for use with
acquisitions of other producing assets.

 

Asset Valuation

WAFD has updated its borrowing base estimate using a report from a third-party
engineering firm, APN Energy ("APN"), effective 1 September 2022. The report
was prepared by APN for the Company for submission to WAFD. The Company
expects to report updated reserve figures in the next redetermination.

 

Assets included are as follows:

 

 Asset                         Operator  Interest (%)  Status                     Lease expiration  Total Acres (gross)
 Pine Mills                    NTOG      100%          Producing and Development  HBP               2,320
 Pine Mills (Cypress farmout)  Cypress   32.5%         Producing and Development  HBP               160
 Permian Basin                 NTOG      53-100%       Producing and Development  HBP               1,280

 

 

Future Net Income attributable to the Company's interest, as determined by
WAFD, using the price deck listed below is after deducting estimated future
operating and development costs, production and ad valorem taxes, but before
Federal income taxes.

 

 

 Category                        Future Net Income (USD)  Net Present Value

                                                          10% Discount Rate (USD)*
 Proved Developed Producing      $18,418,540              $9,662,820
 Proved Developed Non-Producing  $2,870,360               $1,715,320
 Proved Undeveloped              $13,061,210              $5,818,250
 Total Proved                    $34,350,110              $17,196,390

 

 

Future revenues were estimated using an oil price (WTI) forecast supplied by
the lender which follows:

 

 Year                Oil ($/bbl)
 2022                $65.25
 2023                $64.50
 2024                $62.25
 2025                $62.00
 2026                $61.75
 3% Price            $70.00 CAP

 Escalation to Cap

 

 

 

 

 

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

 

"We're pleased to continue to deliver significant improvements in production,
which have resulted in a further increase to the borrowing base of our senior
lending facility. This provides us a lot of flexibility to grow from here
using existing resources, without the need for dilution."

 

 

This announcement contains inside information for the purposes of Article 7 of
EU Regulation 596/2014

 

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 of London.

 

 

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

 

Technical Glossary

 

$ - US Dollar

 

bbl - barrel

 

Borrowing Base - the amount of money that a lender is willing to loan a
company, based on the value of the collateral the company pledges

 

Future Net Income or FNI - the projected
(https://www.lawinsider.com/dictionary/projected)  Gross Revenues
(https://www.lawinsider.com/clause/gross-revenues)  expected
(https://www.lawinsider.com/dictionary/expected)  to be realised
(https://www.lawinsider.com/dictionary/realized)  by the Company
(https://www.lawinsider.com/clause/by-the-company)  during such period less
the sum of the Operating Costs payable.

 

Gross - total quantity or amount

 

HBP- Held by Production

 

Net - quantity or amount associated with Nostra Terra's interest

 

Net Present Value or NPV - the difference between the present value of cash
inflows and the present value of cash outflows over a period of time.

 

 

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