Austin Chalk well achieves Pa
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Austin Chalk well achieves PayOut
2 August 2010
Nostra Terra Oil and Gas Company plc (AIM: NTOG) is pleased to announce that the redeveloped Austin Chalk well located in the Giddings Field, Lee County, Texas, in which the Company holds a 2% interest, has produced sufficient oil and gas to pay back its redevelopment costs. The milestone was achieved after just 35 days of production, and Nostra Terra is due to receive its initial revenue payment in mid-August.
The redevelopment work involved drilling a new horizontal section, extending some 1900 feet from the original vertical wellbore. Positive indications of producibility were encountered within days of re-entry, and the well was placed on production on 5 June.
While Austin Chalk wells are characterised by relatively steep decline curves before stabilising at significantly lower production volumes, the initial flow rate from the new section exceeded expectations at just under 1000 barrels of oil per day (bopd) and 800,000 cubic feet of natural gas (mcfd). The flow rate has subsequently followed the anticipated decline curve, but the well remains free flowing and not yet requiring artificial lift. As a result, the total redevelopment costs of approximately US$890,000, including Nostra Terra's share, have already been fully recovered.
The well is expected to remain profitable, albeit at lower production volumes, for several years. In addition, there is a possibility of drilling a second horizontal section into the lower "A Zone" of the formation, as described in the Company's earlier announcement of 16 June 2010.
Matt Lofgran, CEO of Nostra Terra, said: "We are naturally pleased to have reached the payback milestone so quickly after taking our first step into the Austin Chalk play. More importantly, it reinforces our strategic objective of achieving rapid and sustainable growth by applying horizontal drilling technology in mature carbonate and sandstone reservoirs.
"We see abundant opportunities to repeat this initial success, and are now focused on identifying, screening and acquiring larger interests in similar re-entry candidates that can deliver substantial ongoing cash flow with rapid payback," he added.
For further information contact:
Nostra Terra Oil and Gas Company plc Telephone: +1 480 993 8933
Matt Lofgran, CEO
mlofgran@ntog.co.uk
Religare Capital Markets Telephone: +44 (0)20 7444 0800
Peter Trevelyan-Clark/Ben Jeynes
Alexander David Securities Ltd Telephone: +44 (0)20 7448 9820
David Scott/Bill Sharp/Nick Bealer
Announcements made by the Company are available automatically via email by registering at www.ntog.co.uk.
For more information, please visit www.ntog.co.uk.
This information is provided by RNS
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