TIDMNTOG
RNS Number : 9209J
Nostra Terra Oil & Gas Company PLC
16 December 2022
16 December 2022
Nostra Terra Oil and Gas Company Plc
("Nostra Terra" or "the Company")
Substantial increase in Senior Facility
Nostra Terra (AIM: NTOG), the international oil & gas
exploration and production company with a portfolio of production
and development assets in Texas, USA, is pleased to announce a
significant expansion in its Senior Lending Facility ("Senior
Facility" or "Facility"), along with an increase in the Company's
asset value.
Highlights
Senior Facility
-- Borrowing Base increase to $4,350,000 (from $3,350,000 on 28
March 2022), a 30% increase vs March 2022
-- Interest Rate: 6.50% (previously 4.40%)
WAFD Valuation
-- Future Net Income: $34,350,110 a 6% increase vs March 2022
-- NPV10: $17,196,390 an 18% increase vs March 2022
Senior Facility & Corporate Valuation
The Company has received a large increase in the borrowing base,
providing it with access to additional non-dilutive capital which
is available to supplement cash flow from operations and to further
its growth plans.
WAFD, the provider of the Facility, estimate of Future Net
Income has increased by 6% whilst Net Present Value (at a 10%
discount rate) has increased by 18% since the prior redetermination
in March 2022. The Borrowing Base of the $10,000,000 Senior
Facility has been increased to US$4,350,000 based on improved
production during the first half of 2022, hence an additional
US$1,000,000 is available for utilisation compared with 28 March
2022 . As at 30 June 2022, the Company had drawn down $3,235,000
under the Senior Facility.
The size of the Facility and Borrowing Base will continue to be
reassessed at least twice yearly. The Board anticipates the
Facility and Borrowing Base will continue to expand as the
Company's production, cashflows and reserves increase. The current
interest rate on the facility is 6.5%. The Facility is not
restricted to any geographical region and can expand further for
use with acquisitions of other producing assets.
Asset Valuation
WAFD has updated its borrowing base estimate using a report from
a third-party engineering firm, APN Energy ("APN"), effective 1
September 2022. The report was prepared by APN for the Company for
submission to WAFD. The Company expects to report updated reserve
figures in the next redetermination.
Assets included are as follows:
Asset Operator Interest Status Lease Total Acres
(%) expiration (gross)
Producing
Pine Mills NTOG 100% and Development HBP 2,320
---------- --------- ----------------- ------------ ------------
Pine Mills
(Cypress Producing
farmout) Cypress 32.5% and Development HBP 160
---------- --------- ----------------- ------------ ------------
Permian Producing
Basin NTOG 53-100% and Development HBP 1,280
---------- --------- ----------------- ------------ ------------
Future Net Income attributable to the Company's interest, as
determined by WAFD, using the price deck listed below is after
deducting estimated future operating and development costs,
production and ad valorem taxes, but before Federal income
taxes.
Category Future Net Income Net Present Value
(USD) 10% Discount Rate
(USD)*
Proved Developed Producing $18,418,540 $9,662,820
------------------ -------------------
Proved Developed Non-Producing $2,870,360 $1,715,320
------------------ -------------------
Proved Undeveloped $13,061,210 $5,818,250
------------------ -------------------
Total Proved $34,350,110 $17,196,390
------------------ -------------------
Future revenues were estimated using an oil price (WTI) forecast
supplied by the lender which follows:
Year Oil ($/bbl)
2022 $65.25
------------
2023 $64.50
------------
2024 $62.25
------------
2025 $62.00
------------
2026 $61.75
------------
3% Price $70.00 CAP
Escalation to
Cap
------------
Matt Lofgran , Nostra Terra's Chief Executive Officer, said:
"We're pleased to continue to deliver significant improvements
in production, which have resulted in a further increase to the
borrowing base of our senior lending facility. This provides us a
lot of flexibility to grow from here using existing resources,
without the need for dilution."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014
Competent Person Disclosure
John Stafford, a Director at Nostra Terra with over 35 years'
relevant experience in the oil industry, has reviewed this
announcement for the purposes of the current Guidance Note for
Mining, Oil and Gas Companies issued by the London Stock Exchange
in June 2009. Mr. Stafford is a Fellow of the Geological Society of
London.
For further information, contact:
Nostra Terra Oil and Gas Company
plc
Matt Lofgran, CEO Tel: +1 480 993 8933
Beaumont Cornish Limited
(Nominated Adviser)
James Biddle/ Roland Cornish Tel: +44 (0) 20 7628 3396
Novum Securities Limited (Broker)
Jon Belliss
Lionsgate Communications (Public Tel: +44 (0) 207 399 9425
Relations)
Jonathan Charles Tel: +44 (0) 7791 892509
Technical Glossary
$ - US Dollar
bbl - barrel
Borrowing Base - the amount of money that a lender is willing to
loan a company, based on the value of the collateral the company
pledges
Future Net Income or FNI - the projected Gross Revenues expected
to be realised by the Company during such period less the sum of
the Operating Costs payable.
Gross - total quantity or amount
HBP - Held by Production
Net - quantity or amount associated with Nostra Terra's
interest
Net Present Value or NPV - the difference between the present
value of cash inflows and the present value of cash outflows over a
period of time.
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