Nostra Terra Oil & Gas Company PLC £1.15 million placing to develop Mesquite (2010R)
February 27 2019 - 2:00AM
UK Regulatory
TIDMNTOG
RNS Number : 2010R
Nostra Terra Oil & Gas Company PLC
27 February 2019
27 February 2019
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
GBP1.15 million placing to develop Mesquite
Nostra Terra (AIM:NTOG), the oil and gas exploration and
production company with a portfolio of assets in the USA and Egypt,
announces that it has raised GBP1.15 million (gross) by way of a
placement of 47,916,665 new ordinary shares of 0.1 pence each
("Ordinary Shares") (the "Placing Shares") at a price of 2.4 pence
per Placing Share (the "Placing"), this being the closing bid price
of the Company's Ordinary Shares on AIM on 26 February 2019.
The Placing is only conditional on the admission of the Placing
Shares to trading on AIM ("Admission") and is being conducted with
new institutional and other investors. The Placing was led by Shard
Capital Partners LLP, which has been appointed as joint broker to
the Company with immediate effect.
The Placing will enable the Company to strengthen its position
in the Mesquite Asset in the Permian Basin ("Mesquite"), ahead of
identifying and securing a farm-in partner to deliver the Mesquite
Field Development Plan (first iteration announced 21 January
2019).
About the Mesquite Asset
The Mesquite Asset is in West Texas and covers 2,184 gross acres
(1,984 net acres to Nostra Terra) in the prolific Permian Basin.
The target formations at the Mesquite Asset are "tight", meaning
the oil-bearing rock formations are of low permeability. As such,
the target formations have characteristics that make them ideal
targets for horizontal drilling and have delivered substantial oil
production in other areas of the prolific Permian Basin. Comparable
regional horizontal drilling has delivered initial oil production
rates of 200-300bopd.
In the first complete iteration of the Mesquite Field
Development plan, which covers 1,384 net acres, Mesquite is
estimated to have a US$21,600,000 NPV10 valuation at US$53 / oil
barrel and a US$28,600,000 NPV10 valuation at US$60 / oil barrel,
once fully developed. The respective estimated IRRs are 34% at
US$53 / oil barrel and 46% at US$60 / oil barrel.
Based on 5,000ft (1,524m) lateral (horizontal) wells at 160 acre
spacing, each well at Mesquite is estimated to contain 300,000
barrels of recoverable oil (Estimated Ultimate Recovery, "EUR"). It
is expected each well will have a life of 20 years and is expected
to deliver 100,000 barrels of oil production over the first three
years.
Admission to trading and Total Voting Rights
Application will made for Admission, which is expected to occur
on 13 March 2019. The Placing Shares will rank pari passu with the
existing Ordinary Shares.
Following the Placing, the Company's total issued ordinary share
capital will consist of 195,122,886 Ordinary Shares with voting
rights. No Shares are held in treasury.
The above figure of 195,122,886 may be used by shareholders as
the denominator for the calculations by which they will determine
if they are required to notify their interest in, or a change to
their interest in the Company under the FCA's Disclosure and
Transparency Rules.
Matt Lofgran, Chief Executive Officer of Nostra Terra,
commented:
"Our goal with Mesquite is to find the right industry partner to
work with on developing the asset. By significantly strengthening
our balance sheet and welcoming institutional investment into the
Company at this time, we are positioned to retain more interest in
the asset going forward.
"The Board believes the Permian Basin remains one of the most
attractive oil provinces globally, attracting billions of dollars
in investment each year. In the Mesquite target area Nostra Terra
still has first mover advantage, so it is important for a company
of our size to move as quickly as it can in securing its position.
We are on course to deliver substantial value to shareholders over
the coming years."
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
Shard Capital Stockbrokers (Joint
Broker)
Damon Heath / Erik Woolgar Tel: +44 (0) 207 186 9952
Smaller Company Capital Limited
(Joint Broker)
Rupert Williams / Jeremy Woodgate Tel: +44 (0) 20 3651 2910
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END
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