TIDMNTOG
RNS Number : 9336L
Nostra Terra Oil & Gas Company PLC
01 May 2015
AIM: NTOG 1 May 2015
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Quarterly Production and Operations Update
Quarterly production increase of 79% over same quarter last
year
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 for the
first quarter of 2015.
Highlights
-- Quarterly production increase of 79% over same quarter last year
-- Quarterly production more than 11,000 boe (net of royalties)
-- Quarterly revenues reached US$446,956 (net of royalties)
-- Expansion in South Texas, Eagle Ford trend
Monthly Production (Net)
Month Total Net* Production Revenue (USD)
(BOE)
---------- ---------------------- --------------
January 4,012 144,320
---------- ---------------------- --------------
February 3,415 140,827
---------- ---------------------- --------------
March 3,641 161,809
---------- ---------------------- --------------
*Net to Nostra Terra's working interests, after royalties
(NRIs range from 78% to 81%)
Q1 2015 Operations Update
The Company is pleased to report that first quarter production
continued to surpass 11,000 boe and revenue from production of
US$446,956, despite the lowest oil prices since 2009.
Chisholm Trail Prospect (Oklahoma)
Multiple formations have been drilled and successfully tested.
Economics for existing horizontal wells remain positive, however
operators have significantly slowed down drilling in recent months
- as a significant proportion of production is obtained in the
early months of the well, it is better to wait for higher oil
prices than to produce relatively large volumes at lower prices.
Nostra Terra will continue to evaluate new proposals as they are
made by operators.
White Buffalo Prospect (Wyoming)
White Buffalo is our largest 100% asset acquisition to date,
consisting of 6,000 net acres of leases in the prolific Big Horn
Basin of Wyoming. Independent projections are that the prospect
holds up to 20 potential locations for horizontal drilling and a
recoverable potential of 13 million barrels of oil. At oil prices
of $73.4 per barrel, each well has been independently projected to
an optimum value of US$12 million and a total asset value of US$236
million.
We have taken steps that will enable us to move quickly when oil
prices increase and in the meantime see no requirement to start
drilling, given that .we have revenues from our other interests.
The acquisition of technical data has been concluded. Existing
seismic studies have been identified for purchase, new 2D lines
have been laid out along the intended well paths of future
horizontal wells, while the log suites and coring programs have
been defined.
South Texas (Eagle Ford Trend)
Earlier this week Nostra Terra announced the acquisition of a 1%
Working Interest in a prospect covering approximately 20,000 acres
in South Texas. The Working Interest will not be subject to
reduction, as previously seen in some of our Oklahoma interests, as
Forced Pooling regulations are different in Texas.
The 870 million acre Eagle Ford trend has the same "stacked pay"
characteristic that is consistent with Chisholm Trail. Such areas
allow for the "multiplier effect" where numerous zones can be
exploited within the same leases.
This prospect offers the opportunity for the Company to enter a
potentially large play at very low risk, while at the same time
offering a significant upside for leveraging into a multi-well,
continuous drilling program. The first well was already drilling at
the time of the announcement and completion is anticipated very
soon. Investment in future wells will be paid from the cash flow of
our currently producing assets. Success in these first test wells
of this 20,000-acre opportunity, will allow drilling along the
trend and replacement of reserves due to normal production decline
of our other assets in the portfolio.
Nostra Terra will continue to look for opportunities to invest
in the many formations along this trend and grow to larger
scale.
Outlook
Our current revenue from producing properties continues to
exceed our overheads, even in the current oil price environment.
That said we are selective of when and where free cash flow is
invested and will continue to be disciplined in maintaining already
very low corporate overhead.
Many operators have cut their CAPEX drilling budgets
significantly, simply waiting for oil prices to strengthen while we
see this period is an opportunity to grow.
The concentration remains on areas of "stacked pay" and will be
acutely focused on investing where the economics are strong,
despite the lower current oil prices. We are particularly
interested in assets that are already producing, or are drilling,
or drill-ready immediately. We anticipate that many more
opportunities will become available to us along the Eagle Ford
trend in South Texas, where further growth is targeted.
Matt Lofgran, Chief Executive Officer of Nostra Terra,
commented:
"While the oil price appears to be recovering, we are looking
for a more stable oil price before committing to a drilling program
at White Buffalo, preferring to grow our cash position further by
investing in the type of low-risk prospects that we enjoyed along
Chisholm Trail. By doing this we can build our cash position with
the aim of maintaining more of our interest of White Buffalo.
Despite the lower oil price, environment portfolio investments
made in the last few years continue to generate cash which we are
using to help fund growth, both in production and exploration. Our
recent acquisition of interest in South Texas, the largest acreage
in our portfolio, offers much more opportunity to add production
and cash."
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.
Glossary
`boe' means barrels of oil equivalent: a unit of energy based on
the approximate energy released by burning one barrel (42 US
gallons or 158.9873 litres) of crude oil.
`boepd' means barrels of oil equivalent per day
'mcfd' means Thousand Cubic Feet per Day
'NRI' means Net Revenue Interests
'WI' means Working Interest
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
Sanlam Securities UK Limited
(Nominated adviser and broker)
Lindsay Mair / James Thomas / Jamie Vickers Telephone: +44 20 7628 2200
PR
Gary Middleton Telephone: +44 7951 603 289
This information is provided by RNS
The company news service from the London Stock Exchange
END
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