Operations Update

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 Matt Lofgran, CEO	Email:	[phone]
Beaumont Cornish Limited (Nominated Adviser) James Biddle/ Roland Cornish	Tel:	[phone]
Novum Securities Limited (Broker) Jon Belliss Lionsgate Communications (Public Relations) Jonathan Charles	Tel: Tel:	[phone] [phone]

 

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