Completion of Permian Basin Acquisition

RNS Number : 2496O

Nostra Terra Oil & Gas Company PLC

03 November 2016

 

3 November 2016

Nostra Terra Oil and Gas Company plc

("Nostra Terra" or the "Company")

Completion of Permian Basin Acquisition

Nostra Terra (AIM:NTOG), the oil and gas exploration and production company with a portfolio of assets in the USA and Egypt, is pleased to announce the acquisition of producing assets in the Permian Basin of Texas.  

Acquisition

Nostra Terra has agreed to pay approximately US$62,500 for the acquisition and initial workover plan of a 57.2% working interest in 4 wells located on 50 gross acres in the Permian Basin, Mitchell County, Texas.  The acquisition is from a consortium of local owners/producers.

The leases currently produce, in aggregate, approximately 2 barrels of oil per day gross. The leases are Held By Production, which means they are not at risk of expiring.  This allows flexibility for the working interest to perform workovers and drill new wells at its own pace, as market conditions allow.

Other key features of the leases include:

·    Production is profitable below $30/barrel

·    The leases produce conventional oil, from a shallow depth (~3,400') and experience shallow declines.

·    Production upside is expected to be available from the drilling of new wells and workovers of existing wells.

The initial workover is planned in the coming weeks and is to be funded from internal cash resources.  Nostra Terra will contract operations to a local operator to increase production while Nostra Terra focuses on further acquisitions.

Wider Permian Basin strategy

The acquisition represents Nostra Terra's entry into this prolific oil-producing region, which the Company anticipates will be the first of several acquisitions in the area. The Permian Basin is one of the premier oil and gas producing regions of the United States. Straddling New Mexico and Texas, the Permian Basin is approximately 240 miles wide and 300 miles long. In June 2014, the Permian Basin was estimated to be the world's second largest oil field in terms of total recoverable resource, with at least 75 billion barrels of oil equivalent recoverable resources present.

Matt Lofgran, Chief Executive Officer of Nostra Terra, commented:

"We're pleased to make our initial purchase in the Permian Basin. Our focus is on acquiring cash flow positive assets that are producing or are near production and offer additional upside through lower risk workovers and new wells. We are in the process of contracting the rig to perform the initial workover on the newly acquired leases in the near-term. We are also working on other potential acquisitions to build our presence in this prolific area."

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

For further information, visit www.ntog.co.uk or contact:

Nostra Terra Oil and Gas Company plc Matt Lofgran, CEO		[phone]
Strand Hanson Limited (Nominated & Financial Adviser and Joint Broker)			[phone]
Rory Murphy / Ritchie Balmer
Vicarage Capital Limited (Joint Broker)			[phone]
Rupert Williams / Jeremy Woodgate

 

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