Q3 Operation Update
AIM: NTOG 30 October 2014
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Quarterly Production and Operations Update
80% Increase in Production from Previous Quarter
Nostra Terra (AIM:NTOG), the oil and gas exploration and production company with a growing portfolio of assets in the USA, is pleased to provide an operational and production update.
Highlights
· Quarterly production increase of 80% over previous quarter
· September net production averaged 84 boepd (net of royalties)
· CT-3 (Gant 27) reached payout in Q3-14 (18 months)
· CT-14 (Gant 22) workover completed
· CT-16 (Bollenbach 1-33H) drilling
· CT-18 (Anderson 21-18-6 3H) with Chesapeake now drilling
· CT-17 (Wilson 3-8-5H) gross Initial Rate of 440 boepd, (Nostra Terra 2.92% Working Interest)
· Additional formation targeted in Chisholm Trail Prospect
· Acquisition of 100% Working Interest in White Buffalo Prospect (6,100 net acres)
· Verde rework results, better than original IP rate
· High Plains well scheduled to spud before year end
· £1.75m Placing completed
Monthly Production (Net)
|
Month |
Total Net* Production (BOE) |
Revenue (US$) |
|
January |
2,125 |
154,100 |
|
February |
1,960 |
142,670 |
|
March |
2,100 |
150,800 |
|
April |
1,265 |
86,130 |
|
May |
1,370 |
101,300 |
|
June |
1,450 |
107,735 |
|
July |
2,350 |
193,515 |
|
August |
2,498 |
195,609 |
|
September |
2,511 |
201,817 |
*Net to Nostra Terra's working interests, after royalties
(NRIs range from 78% to 81%)
Q3 2014 Operations Update
The Company is pleased to report that quarterly production has increased by 80% from the second quarter of 2014, and averaged 84 boepd to Nostra Terra during September. Exploration and production activity continued to grow across the portfolio of prospects during the period, in addition, the Company acquired a new asset, the White Buffalo Prospect in Wyoming, USA, where Nostra Terra owns a 100% working interest.
Chisholm Trail Prospect (Oklahoma)
At the beginning of the quarter the CT-3 well (Gant 27) reached payout, 18 months from the start of production.
The latest producer, the CT-17 well (Willson 3-8-5H) averaged 440 barrels of oil equivalent per day (boepd), maintaining the prospect's record of consistently outperforming the operators' expectations. The well is another producer in the prolific Hunton formation. Nostra Terra owns a 2.92% Working Interest ("WI") in the well, which is operated by Stephens Production Company.
The CT-14 (Gant 1-22H) was completed but was producing more formation water relative to the volume of hydrocarbons than average wells in the play. A rework has just been completed setting a bridge plug to close off the very end of the well. The well is being put back into production and we will provide an update on progress when applicable. Nostra Terra has a 20.0% WI in this well that is operated by Ward Petroleum.
On 23 October Nostra Terra announced that the CT-16 (Bollenbach 1-33H) operated by Stephens Production Company is now drilling. This is another horizontal Hunton well, where Nostra Terra owns a 20.0% WI,.
Nostra Terra also elected to participate in the Chesapeake Anderson 21-18-6 3H (CT-18) well, where it holds a 1.87% WI. Drilling is now underway on this well. It's the 18th well in the Chisholm Trail Prospect and the first to test the Oswego formation. The prospect has been successfully drilled in the Hunton and Mississippian formations, and, if successful, CT-18 could help establish a third horizontal play within the prospect. This has the potential to, create a "multiplier effect", adding more potential drilling locations from the same acreage. The well is operated by Chesapeake Energy.
Verde Prospect (Colorado)
The Verde Prospect is located in southeastern Colorado and is operated by Plainsmen Partners. Two wells are producing, with the first well (State of Colorado 1-36) reaching payout in 9 months. Both wells were recently reworked and production improved dramatically. The 1-36 effort resulted in a 10-day production average that was close to double that of the original figure. The second producing well of the prospect (Holt) has also shown significant improvement in its production levels.
High Plains Prospect (Texas)
The Company has been informed by the operator that, with the permitting issues at the High Plains Prospect now resolved, spudding of the first exploration well on the prospect is now expected by the end of the year.
The prospect covers 66 square miles and work continues to integrate the detailed subsurface mapping and 3D seismic data that will prioritise further areas for drilling. Nostra Terra has a 20% WI in the prospect, which is operated by Brown and Borelli.
White Buffalo Prospect (Wyoming)
Work is moving forward on the White Buffalo Prospect in Wyoming. Strategic partners are in place to perform the responsibilities for which the Company does not have internal personnel, such as the drilling and completion of complex horizontal wells.
The first well will be drilled vertically to gather information about the target formation and possible secondary targets. Extensive, sophisticated log suites will be run and evaluated. When that work is concluded, the well will be completed to serve as a disposal well for future use.
Based on the information gathered, subsequent wells will be drilled to the target formation(s) and then turned to the horizontal for a distance of 4,500 feet. Multiple locations have already been identified and the drilling schedule will be prioritized accordingly.
Outlook
During the remainder of the year we hope to have positive results for the CT-14 and CT-16 wells. We have a 20% WI in each well and their production could have a significant impact on the Company's overall production.
We also look forward to two new exploration wells. The first well will be CT-18 that will test the Oswego formation in the Chisholm Trail Prospect. If successful this will begin to prove up a third horizontal play within the prospect and the 'acreage multiplier effect' could provide a number of new targets.
The second well will be the first exploration well within the High Plains Prospect. If it proves successful, the well will be followed by an on-going leasing program within the 43,000 acre Area of Mutual Interest.
Alden McCall, Chief Operating Officer of Nostra Terra, stated:
"Our goal and guideline has been to build a solid platform of production revenue from which to launch programs that are more exploratory in nature. We have participated in numerous wells that have reached payout in three years or fewer and are very pleased that two of the earliest large-interest wells in Chisholm Trail reached payout by the end of July, or roughly within 18 months. The platform is built and we have secured bank funding, based upon those reserves. Our next step is to bring the large potential of White Buffalo forward."
Matt Lofgran, Chief Executive Officer of Nostra Terra, commented:
"It's been an exciting end to the quarter as several wells are in various stages of drilling and completion. We anticipate being able to announce new production from some of these wells shortly which could have a material impact on the Company, providing a good end to the year and a solid base on which to build as we transition our portfolio further towards our own operations, including the White Buffalo prospect that we currently own 100%."
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
Northland Capital Partners Ltd
(Nominated Adviser)
Matthew Johnson / Lauren Kettle Telephone: +44 (0)20 7382 1100
Hume Capital Securities plc
(Broker)
Jon Belliss / Abigail Wayne Telephone: +44 (0)20 3693 1470
Lothbury Financial Services Ltd
Gary Middleton / Michael Padley Telephone: +44 (0)20 3440 7620
This information is provided by RNS
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