Acquisition of Oil and Gas Properties in Kansas...
NOSTRA TERRA OIL AND GAS COMPANY PLC
("NTOG" or the "Company")
Acquisition of Oil and Gas Properties in Kansas, USA
15 July 2009
NTOG is pleased to announce that on 13 July it entered into definitive
agreements with Hewitt Petroleum, Inc. ("HPI") for the purchase and exploration
of three properties in Kansas, USA for an initial consideration of US$235,000
which has been paid in cash with US$25,000 of the balance due within 60 days of
execution of definitive agreements ("Execution"), US$275,000 within 90 days of
Execution and US$100,000 to be satisfied by the assignment by Mr Lofgran to HPI
of his working interest in another property known as the Perth field where HPI
is also a partner.
The acquisitions and development plans fit within NTOG's new strategy announced
on 30 June 2009 in which it looks to acquire assets in the USA to diversify from
Ukraine into areas of low political risk, while acquiring properties of low
geological risk with significant undeveloped reserves, with an objective of
developing a stable, and steady cash flow.
NTOG's newly appointed CEO Matt Lofgran commented: "This is a critical turning
point for NTOG and its shareholders. The properties we have acquired and are
seeking to acquire have existing production, but more importantly proven
reserves, which provide the opportunity for significant upside. In addition we
have partnered with Hewitt Petroleum Inc, a proven operator and expert in these
given fields. We are very excited about the quality of properties and
relationships we are bringing to NTOG."
The properties acquired are as set out below:
Koelsch Field
A 50 per cent working interest in two production wells and one salt water
disposal well in the Koelsch Field, located in Russell County, Kansas. The
working interest is subject to an over burden of not more than 22 per cent. HPI
has undertaken to deliver a recordable assignment of the assigned working
interest within 90 days of Execution failing which a US$60,000 advance shall be
repaid to NTOG. In the event the leases and wellbore are acquired the estimated
costs for the deepening and reworking of the two production wells and the
development cost for the reworking of the Salt Water Disposal Well are
US$231,000 to be met by NTOG which will receive 75% net revenues until its
actual costs have been repaid and thereafter 50%;
Hoffman Field
A 25 per cent working interest in five production wells (of which two are
plugged) and one salt water disposal well in the Hoffman Field, located in
Barton and Russell County, Kansas. The working interest is subject to an over
burden of not more than 22 per cent. US$125,000 cash has been paid for the
assignment of the working interest, with the balance of US$275,000 due within 90
days of Execution. The estimated costs for the deepening and reworking of the
five production wells and the development cost for the reworking of the Salt
Water Disposal Well are US$1,350,000 of which 25 per cent is to be met by NTOG.
If revenue is generated from production on the project prior to NTOG completely
paying for their interest then the revenue shall be adjusted on a prorate basis
for the amount that NTOG has actually paid; and
Bloom Field
A 50 per cent working interest in nine production wells and two salt water
disposal wells in the Bloom field, located in Russell County, Kansas. The
working interest is subject to an over burden of not more than 22 per cent.
US$50,000 cash has been paid for the assignment of the working interest, with
US$25,000 of the balance due within 60 days of Execution and a further
US$150,000 within 90 days. The remaining US$100,000 is being satisfied by the
assignment by Mr Lofgran to HPI of his working interest in another property
known as the Perth field where HPI is also a partner. NTOG shall have no
obligations owed to Mr. Lofgran in compensation of the transfer of his asset to
HPI. The estimated costs for the deepening and reworking of the nine production
wells and the development cost for the reworking of the two Salt Water Disposal
Wells are between US$1,820,000 and US$2,550,000 to be met by NTOG which will
receive 75% net revenues until its actual costs have been repaid, thereafter
50%.
Under the agreements between NTOG and HPI, in the event that either party elects
not to participate in the drilling, deepening, reworking or completion attempt
on an additional well, such party will be deemed to have released and
relinquished to the other participating party or parties all its right, title
and interest in and to that well and the participating party shall own the
relinquished interest free and clear of all obligations to the non-participating
party.
APPL 82 revised joint operating agreements have been executed in respect of all
three leases between NTOG and HPI (as non-operators) and Hewitt Energy Group,
Inc (as Operator).
Further announcements on progress at the properties will be made in due course
and are available automatically by email to those who register at www.ntog.co.uk
.
For further information contact:
Nostra Terra Oil and Gas Company plc
Matt Lofgran, CEO mlofgran@ntog.co.uk
Tel: +1 480 993 8933
Blomfield Corporate Finance Ltd Tel: +44 (0)20 7489 4500
Alan MacKenzie/Peter Trevelyan-Clark/Ben Jeynes
Alexander David Securities Ltd Tel: +44 (0)20 7448 9820
David Scott/Jon Levinson
ENDS
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