Bale Creek Drilling Update
AIM: NTOG
1 November 2012
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Bale Creek Prospect - Production Results
Nostra Terra, the AIM quoted oil and gas producer, with a growing portfolio of horizontal and vertical drilling projects in the USA, is pleased to announce that the second well at the Bale Creek Prospect has demonstrated positive prolonged testing results and is now producing oil and generating revenue.
Production testing on the second (vertical) well has been underway for 790 cumulative hours over recent weeks. After correcting for the initial "flush production", the well has produced at an average of 2.5 barrels of oil per hour. To date, 1,930 of those barrels have already been sold to purchasers.
Given the positive production results on the second well, it has been decided to discontinue work on the first well where pressure was low, and to focus resources on future wells.
Nostra Terra has a 30% working interest in the Bale Creek prospect which is operated by Pathfinder Development Capital, LLC.
Matt Lofgran, Chief Executive Officer of Nostra Terra stated:
"We are encouraged by the results from second well and pleased to add the production to our growing portfolio."
Alden McCall, Chief Operating Officer of Nostra Terra, summarized the results:
"Prolonged production-testing is considered to be a much better indicator of production capability than the more subjective swab-testing. We have been executing various well treatments; each of which was then followed by production testing to evaluate the results. The treatments have resulted in better well response and we have additional treatments to apply and evaluate for further improvements."
The technical information within this announcement has been reviewed by Alden McCall, the Company's Chief Operating Officer, a Certified Petroleum Geologist and a member of the American Association of Petroleum Geologists and the Society of Petroleum Engineers.
For further information, visit www.ntog.co.uk or contact:
Nostra Terra Oil and Gas Company plc
Matt Lofgran, CEO
mlofgran@ntog.co.uk Telephone: +1 480 993 8933
Shore Capital & Corporate Limited (Nominated Adviser)
Bidhi Bhoma/ Toby Gibbs Telephone: +44 (0)20 7408 4090
Alexander David Securities Ltd
David Scott / Bill Sharp Telephone: +44 (0)20 7448 9812
Lothbury Financial Services Limited
Gary Middleton / Michael Padley Telephone: +44 (0)20 3440 7621
Notes:
Flush Production: First yield from a flowing oil well during its most productive period.
The USA is going through oil and gas boom as companies apply new technologies to fields previously thought of as no longer commercial. Most of the new oil now being produced in the US comes from older fields rather than from companies exploring and finding huge new reservoirs. With a number of global investment banks recently publishing that the USA could soon be the largest producer of oil, it gives an idea of the importance technology is playing in weaning the US from its dependence on foreign oil imports.
Nostra Terra acquires meaningful interests, including 100% stakes, in entire oil prospects rather than on a well by well basis, and applies new technology in order to bring on new production and develop new reserves. When a field is brought back into production, the acreage price around the area rapidly increases, making a stake in an entire prospect more valuable a proposition than a single well.
In September 2012, Nostra Terra entered into an agreement with Ward Petroleum for the Chisholm Trail Prospect, a multi-well horizontal drilling project in Oklahoma. The prospect area is large in size and a leasing program is on-going. Nearby drilling has resulted in several wells that produce in excess of 200boepd after the first 30 days of "flush" production. Nostra Terra owns a 20% interest in this active program within which working interests in the individual wells vary. Based on results from neighbouring wells, we anticipate this prospect also has the potential to deliver rapid payouts with continued strong production levels.
Nostra Terra owns a 30% WI in the Bale Creek prospect, operated by Pathfinder Development Capital, LLC. The prospect is located in Oklahoma, in an oil-rich area with multi-pay potential from as many as eight reservoirs.
Nostra Terra acquired a 10% working interest in the Warrior Prospect, operated by Crown Energy Company, in January 2012. This is another horizontal oil prospect with multi-pay potential from as many as eight reservoirs.
In November Nostra Terra announced that it had commenced the evaluation and development of its own plays within an established hydrocarbon region in Oklahoma and where it will control up to 100% of company-generated projects.
This information is provided by RNS
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