Pine Mills Update & Investor Conference Call
31 May 2017
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Pine Mills Operations Update & Investor Conference Call
Nostra Terra (AIM:NTOG), the oil and gas exploration and production company with a portfolio of assets in the USA and Egypt, is pleased to announce an operations update for the Pine Mills oil field for the first six months since the Company took over as operator.
At 11am BST today (Wednesday 31 May 2017) Nostra Terra will host an Investor Conference Call with a strategic update about the Company followed by a question and answer session immediately after. Details of how to join the call are provided below.
Highlights:
· US$586,355 net revenue and US$321,556 net operational profit (after royalties and severance tax) generated at Pine Mills (100%), for the period from 01 November 2016 to 30 April 2017.
o Nostra Terra currently owns an 87.5% interest in Pine Mills but as a result of a recent Court Order will be able to credit bid for the remaining 12.5% interest in Pine Mills, which would mean it has full claim to 100% of net revenue and net operational profit at Pine Mills going forward (please refer to the Company's 24 May 2017 announcement for further information)
· Average oil production was 91bopd over period, delivering an average of over $53,000 net operating income per month
o Production so far in the full month of May has averaged 118bopd, a 30% increase over the average for the period
o Nostra Terra remains on course to achieve its stabilised average daily production target of 130 - 150bopd at Pine Mills during 2017
· Average Lifting Costs (Lease Operating Expenses) at Pine Mills for the period: US$16.31/bbl
o Further operational improvements planned
· Independent Reserves Report (as at 1 March 2017), details of which were released on 05 April 2017, confirmed:
o Net proven reserves at Pine Mills, attributable to Nostra Terra's 87.5% WI, were 481,350 barrels of oil*.
o Nostra Terra's 87.5% WI in Pine Mills was assigned an NPV10 valuation of US$3.53million*.
· Nostra Terra has made tangible progress towards becoming cash flow positive on a Group-wide basis and aims to achieve this goal during H2 2017.
*Note these figures were calculated on the basis of Nostra Terra's 87.5% WI in Pine Mills.
Operations Update
Nostra Terra aims to become cash flow positive on a Group-wide basis over the course of 2017. Net cash flow generation at Pine Mills is making an increasingly significant contribution to enabling the Company to reach this goal.
During the first 6 months of ownership of the Pine Mills oil field, Nostra Terra focused on decreasing Lease Operating Expenses ("LOE") and overheads, upgrading infrastructure to help stabilise production, followed by workovers to increase production. Nostra Terra is pleased to report that these efforts have delivered an immediate improvement in field performance at Pine Mills.
During the difficult winter months, the Company used this time to upgrade infrastructure and wells to help stabilize production. As a result of these activities average production for the six-month period was 91bopd and the field has been in profit for six consecutive months since Nostra Terra acquired Operatorship.
Recent workovers have further increased production, with the month of May delivering the highest monthly production yet. Current average daily production at Pine Mills for May is 118bopd. Nostra Terra will continue to perform workovers on identified opportunities to increase production further.
The table below summarises the six month operational performance, on a 100% WI basis, at Pine Mills between 01 November 2016 and 30 April 2017.
|
Period |
Sales (gross barrels of oil) |
Net Revenue (after royalties and severance tax) |
Lease Operating Expenses (LOE) |
Net Operating Profit (net cash flow) |
|
01 November 2016 to 30 April 2017 |
16,600 |
$586,355 |
$264,799 |
$321,556 |
In total, Nostra Terra sold a gross 16,600 barrels of oil at Pine Mills between 01 November 2016 and 30 April 2017. This generated net revenue (after royalties and severance tax) of $586,355. Total LOE, otherwise know as "Lifting Costs", were $264,799. The average LOE per barrel of oil produced was $16.31. The net operating profit for the period at Pine Mills was $321,556.
Nostra Terra currently owns an 87.5% WI in Pine Mills. However, as a result of the outstanding monies owed by Hammerhead Management Partners ("Hammerhead") (please refer to the Company's 24 May 2017 announcement for further information), the Board anticipates this will increase to 100% in the near future. As such, this has permitted Nostra Terra to retain 100% of all surplus cash flow generated at Pine Mills. This will be set off against monies owed by Hammerhead.
Nostra Terra is encouraged by the results of operational improvements it has made at Pine Mills and still targets average stabilised average production rates of between 130 and 150bopd. New workovers are planned to increase stabilised production rates over the coming months, using internally generated funds. Nostra Terra will also work to further reduce operating expenses (lifting costs) and thereby improve operating margins.
Reserves Report
The Independent Reserves Report, released on 05 April 2017, confirmed Nostra Terra's net proven reserves at Pine Mills were 481,350 net barrels of oil. These net proven reserves were assigned an NPV10 valuation of US$3.53million. These results were calculated on the basis of Nostra Terra owning an 87.5% WI in Pine Mills.
Investor Conference Call
At 11am BST, Nostra Terra will host an Investor Conference Call. To access the Investor Conference Call online and submit questions please go to:
https://ntog.clickmeeting.com/ntog-investor-conference-call
To access the Investor Conference Call via telephone please call:
+44 207 048 4146 (use pin: 251916#)
Please note questions can only be submitted via accessing the meeting online.
Matt Lofgran, Chief Executive Officer of Nostra Terra, commented:
"With 6 consecutive months of operating profit and now increasing production rates, Pine Mills continues to generate solid cashflow for Nostra Terra.
"Our primary focus as a Company is to increase production on assets that can generate free cash flow at current lower oil prices. Pine Mills is a great example of this, where the net cash flow covers the majority of our corporate overheads.
"We look forward to updating on further progress on Pine Mills as well as other areas of our portfolio."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information, visit www.ntog.co.uk or contact:
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Nostra Terra Oil and Gas Company plc Matt Lofgran, CEO
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+1 480 993 8933 |
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Strand Hanson Limited (Nominated & Financial Adviser and Joint Broker) |
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+44 (0) 20 7409 3494 |
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Rory Murphy / Ritchie Balmer / Jack Botros |
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Vicarage Capital Limited (Joint Broker) |
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+44 (0) 20 3651 2910 |
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Rupert Williams / Jeremy Woodgate |
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This information is provided by RNS
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