Nostra Terra Oil & Gas Company PLC New $5million Senior Lending Facility at 4.75% (1661B)
January 08 2018 - 2:00AM
UK Regulatory
TIDMNTOG
RNS Number : 1661B
Nostra Terra Oil & Gas Company PLC
08 January 2018
08 January 2018
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
New $5million Senior Lending Facility at 4.75%
Nostra Terra (AIM:NTOG), the oil and gas exploration company
with a portfolio of assets in the USA and Egypt, is pleased to
announce that it has received approval for a new US$5 million
Senior Lending Facility ("the Facility") with Washington Federal
Bank. US$1.2 million of the Facility will be immediately available
for use on completion of the legal paperwork ("Completion").
Completion is expected to take place before the end of January. The
interest rate is 4.75%.
About the Senior Lending Facility
The Facility has an initial nominal amount of US$5 million, with
US$1.2 million immediately available for use on Completion based on
current production ("Borrowing Base"). The size of the Facility and
Borrowing Base will be reassessed at least twice yearly. The board
of the Company anticipates the Facility and Borrowing Base will
increase with increased oil production, any further increases in
the Company's Proven 1P oil reserves, and with use of the BP Energy
Company Hedging Facility (as announced on 29 September 2017 and 19
October 2017).
Currently the size of the Facility and Borrowing Base have been
determined solely upon stabilized production at Nostra Terra's Pine
Mills asset. Recent reserves used by the bank were performed
conservatively, with a "sensitivity case", using an oil sales price
of US$36.50 per barrel or less for the next 6 years. With current
oil prices nearly double that, hedging a portion of future
production could significantly increase funds available.
Increased production across Nostra Terra's Permian Basin assets
will further enhance the Company's position in this respect.
The interest rate on drawn down borrowings from the Facility is
determined by the higher of either the sum of the Wall Street
Journal Rate plus 0.25% or a flat 4.25%. The current Wall Street
Journal Rate is 4.5%. As such the current interest rate applied to
use of the Facility is 4.75%
The Facility is not restricted to geographical region. Nostra
Terra can deploy funds from the Facility for operational purposes
and acquisitions in its current areas of operation, in the USA and
Egypt, or in other areas should the opportunity arise.
Washington Federal Bank
Washington Federal Bank is a well-regarded lending provider,
which has an established pedigree in the energy market. It is based
in Seattle, Washington, and has approximately US$15 billion in
assets under management.
Use of funds
As previously announced, Nostra Terra plans to use the Facility
to accelerate its growth, focusing initially on increasing the
Company's free cash flow generation. Nostra Terra plans to commence
further drilling at its 24-drill ready locations across its
portfolio of Permian Basin assets. In addition to this Nostra Terra
has identified a pipeline of potential acquisitions to expand its
Permian acreage and continues its discussions with the stakeholders
at its Egyptian asset with a view to realizing value.
Nostra Terra will continue to update the market on all progress
in the coming weeks and months.
Matt Lofgran, Chief Executive Officer of Nostra Terra,
commented:
"Securing the hedging facility with BP Energy Company last
September marked a step change for Nostra Terra. We now have
approval for a new, non-dilutive and sizeable funding source for
the Company, on highly attractive commercial terms. We're excited
to be working with such a strong energy lender as Washington
Federal that endorses our plans to grow production, cash flow, and
the size of the facility.
With commercial flow testing due to commence shortly at our
recently drilled Twin Well and the permitting process to begin for
our next Permian development well, this is an extremely exciting
time for Nostra Terra. The new funds of the Facility will allow us
in 2018 to quicken the pace of drilling our 24 drill ready
locations, make further progress in Egypt and seek new acquisitions
to add value to the Company. We look forward to providing further
updates on all this soon."
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:
Nostra Terra Oil and Gas
Company plc
Matt Lofgran, CEO Tel: +1 480 993 8933
Strand Hanson Limited
(Nominated & Financial
Adviser and Joint Broker)
Rory Murphy / Ritchie Balmer
/ Jack Botros Tel: +44 (0) 20 7409 3494
Smaller Company Capital
Limited (Joint Broker)
Rupert Williams / Jeremy
Woodgate Tel: +44 (0) 20 3651 2910
This information is provided by RNS
The company news service from the London Stock Exchange
END
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