Acquisition, Placing & Issue of Warrants
NOSTRA TERRA OIL AND GAS COMPANY PLC
("Nostra Terra", "NTOG" or the "Company")
Acquisition, Placing & Issue of Warrants
21 August 2009
Nostra Terra, the AIM-quoted oil and gas company is pleased to announce:
· The acquisition of a 50 per cent working interest in ten production wells
and one salt water disposal well (together the "Boxberger Wells") located in the
Boxberger field, Russell County, Kansas, USA (the "Boxberger Field");
· a 6-month extension on funding development of other properties; and
· a placing of 233,333,333 new ordinary shares of 0.1p each ("Ordinary
Shares") at a price of 0.15p each, raising £350,000, before expenses.
Acquisition
NTOG has acquired a 50 per cent. working interest in ten production wells and
one salt water disposal well in the Boxberger Field from Hewitt Petroleum, Inc.
("HPI") for a total consideration of US$230,000 of which US$50,000 has been paid
in cash. The remaining US$180,000 of the acquisition cost is to be paid by NTOG
after the initial development costs (for which NTOG has assumed responsibility)
have been completed or within twelve months of the execution of the definitive
agreement ("Execution") whichever is earlier.
On 20 August 2009 NTOG entered into a definitive agreement with HPI for the
purchase and exploration of the Boxberger Wells. NTOG has been granted a 50 per
cent. working interest in the Boxberger Wells; the working interest is subject
to an over burden of not more than 20-22 per cent.
NTOG and HPI have agreed that initial production shall place at least two wells
into production. The costs of production are to be agreed between NTOG and HPI
however, NTOG is committed to paying US$350,000 towards such costs, which shall
be paid within two weeks of Execution. The remainder of the development costs
will be paid over the life of the development process. NTOG has also agreed to
assign its proceeds from production from the Boxberger Wells to pay for its
obligation to pay for the development costs of the Boxberger Wells until all
eleven wells have been developed.
HPI and NTOG shall bear the revenue and operating costs for the wells on the
basis of 75 per cent. to NTOG and 25 per cent. to HPI until such time as NTOG
has received revenue from the production revenue of the Boxberger Wells equal to
100 per cent. of its initial development costs. Upon NTOG receiving its initial
development costs from the production revenue, the revenue and operating costs
shall be divided equally between NTOG and HPI.
In the event 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 participating
party shall own the relinquished interest free and clear of all obligations
under this Agreement to the non-participating party.
The reserves for the Boxberger Field are estimated to be sufficient to produce
1,687,000 barrels oil over the first 15 years of production. These are
categorized as proven, producing.
Development of the Boxberger Wells will commence immediately. An APPL 82 revised
joint operating agreement has been executed in respect of the Boxberger Field
between NTOG and HPI (as non-operators) and Hewitt Energy Group, Inc (as
operator).
Extensions
In connection with the Boxberger Field transaction, NTOG has secured an
extension on all development funding commitments for the previously acquired
properties announced on 15 July 2009, namely the Koelsch Field, the Hoffman
Field and the Bloom Field. This will allow NTOG to focus initial efforts on the
Boxberger Field - with the intention of delivering revenues sooner.
Placing & Issue of Warrants
The Company is also pleased to announce that it has completed a placing of
233,333,333 Ordinary Shares in the Company (the 'Placing Shares') at a price of
0.15p per share, raising £350,000 before expenses. These funds will be used for
the development of the Boxberger property.
Alexander David Securities Limited has, in part payment for its services in this
placing, been granted warrants over 4,666,667 ordinary shares with an exercise
price of 0.15p per share exercisable for two years from the date of issue of the
Placing Shares.
Application has been made for the Placing Shares, which rank pari passu with the
Company's already issued ordinary share capital, to be admitted to trading on
AIM. The Placing Shares are expected to be admitted to trading on AIM on 27
August 2009.
Following the issue and allotment of the Placing Shares, the Company will have
1,221,100,913 Ordinary Shares in issue.
The technical information in this announcement has been prepared and approved
for release by Douglas C. Hewitt, CEO of HPI. He is a qualified person as
defined in the Note for Mining and Oil & Gas Companies, June 2009, of
the London Stock Exchange.
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 Tel: +1 480 993 8933
Matt Lofgran, CEO
Blomfield Corporate Finance Ltd Tel: +44 (0)20 7489 4500
Peter Trevelyan-Clark/Ben Jeynes
Alexander David Securities Ltd Tel: +44 (0)20 7448 9820
David Scott/Jon Levinson
ENDS
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