Oklahoma drill-ready acquisition & Update
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
New Oklahoma drill-ready acquisition and Operations Update
Chisholm Trail Prospect - Acquisition
Nostra Terra, the AIM quoted oil and gas producer with projects in the USA, as part of its continuing plan to acquire larger working interests ("WI") in prolific US oil fields, is pleased to announce that it has entered into an agreement with Ward Petroleum Corporation ("Ward") to acquire a 20% WI in the Chisholm Trail Prospect, located in Oklahoma.
The Area of Mutual Interest ("AMI") within the prospect covers a non-contiguous area of over 1,420 acres. The acquisition further enhances Nostra Terra's portfolio of wells in areas where proven horizontal drilling and completion technologies are being applied to known reservoirs.
Highlights of the Chisholm Trail Prospect include:
· Shallow oil targets with associated liquids-rich natural gas;
· Extensive regional structural mapping;
· Three stacked-formations which are prospective to horizontal drilling;
· Proven success of horizontal drilling in the area; nearby wells are producing in excess of 200boepd after the first 30 days of production;
· Initial well already permitted, drilling planned this year;
· The AMI leasehold also includes working interests in 4 additional wells, to be drilled by other operators. NTOG's net WI in those four wells range from less than 1% to 10%.
Leasing and permitting for the initial wells has been completed and they are ready for drilling. A 20% net, non-operated interest in the initial well planned to be drilled by Ward plus smaller interests in four more non-operated wells have been secured. Nostra Terra's total estimated cost of lease-hold activities is US$300,000 and drilling for the first three wells is estimated to cost US$720,000, the significant majority of which is related to the 20% WI well.
The drilling budget is being finalized with drilling of the first three wells, including the 20% WI well, being planned for H2 of 2012.
Ward Petroleum Corporation, based in Enid Oklahoma, was founded in 1963 by Lew Ward, its Chairman. Mr. Ward is a past-President of the Independent Producers Association of America (IPAA) and is a respected member of the oil producers' community of the United States. Among its industry honours, Ward Petroleum has been listed in the top 100 fastest growing American companies by Inc. magazine, and has been named a "Blue Chip Enterprise" by Nations Business magazine.
Operations Update
Bale Creek
The first well was drilled horizontally within its objective formation. Completion design of the well has now called for a hydraulic fracture stimulation (frac) in three stages spaced over the length of the production casing. The first stage was fraced and then swab-tested. The log interpretation from the first stage appeared to be attractive although it was found to be low in pressure. At this time we are now moving forward to frac the remaining stages.
While drilling the second well, the WI parties saw the opportunity to test three identified stacked formations that were prominent anomalies in the 3D seismic interpretation. The decision was made to continue drilling the well vertically in order to test those features. The two lowest zones have been swab-tested and one was determined to be capable of producing oil and associated gas. A temporary bridge plug has been set above them to allow completion in that zone after testing a higher zone. Perforation and production testing of the third and upper-most zone is currently underway.
Both wells have tested and produced oil. Work is continuing and a further update will be provided as to flow rates and associated data.
Warrior
Following thorough review of the results from the initial well, which is on production, improvements in the design for a subsequent new well have been identified and a second production well is now in the planning process. The well is anticipated to be drilled later this year or early the following year. Nostra Terra owns a 10% non-operating working interest in this program of development wells.
Verde
Plainsmen (operator of the Verde Prospect) has announced that it will drill the second well on this prospect by the end of H2. The first well reached payout in 9 months. It continues to produce water-free with a very low rate of decline. From 3D seismic interpretation and third-party engineering estimates it is anticipated that our next well should yield very similar results, thus the first well has de-risked the prospect. Nostra Terra owns a 16.25% non-operating working interest in this program of development wells.
Matt Lofgran, Chief Executive Officer of Nostra Terra, commented:
"Chisholm Trail is an exciting prospect. From the results of recent wells in the play these initial wells have the ability to be the largest producers in our growing portfolio, with a rapid payout, and an inventory of future potential locations. The first wells are already permitted and planned to drill this year thus increasing our activity level further from here."
Alden McCall, Chief Operating Officer added:
"It is a genuine pleasure to be part of this project with Mr. Ward. Horizontal drilling is a key element of our growth plan and Ward Petroleum has a long and stellar track record in operations that span almost five decades. The key is to utilize leading edge technology (3D seismic where possible, sophisticated log suites, geo-steered horizontal well bores and modern multi-stage completions) to produce oil from compartmentalized reservoirs that have been grossly under-produced.
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 7868 2010
Notes:
Oklahoma is the fifth largest producing state in the United States in crude oil production. Despite its long history, it still produces about one quarter of the peak rate that was reached in 1927. The state was the birthplace for such commonly recognized corporate names as Halliburton, ConocoPhillips and J. Paul Getty.
In their last estimate at the beginning of 2000, the US Energy Information Administration ("E.I.A"). projected Oklahoma's proved oil reserves at 610 million barrels (MMBO). Oklahoma natural gas reserves in E.I.A.'s last estimate on 1/1/2001 were about 14 trillion cubic feet (TCF). Both estimates were based on a simple poll of the State's thousands of oil and gas operators.
The oil produced is always a fraction of what is present in a reservoir, and the oil that remains in Oklahoma's mapped reservoirs is unlikely to be less than 42 billion barrels, and is likely to be much more. From 1901 through mid-2002, 14.5 billion barrels of oil and condensate (natural gas liquids) and 90 trillion cubic feet (TCF) of natural gas were produced and sold in Oklahoma (Oklahoma Geological Survey website).
This information is provided by RNS
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