Last checked at (Sharecast News) - Texas-focussed oil and gas exploration and production company Nostra Terra noted the recent, "significant" improvement in oil commodity prices on Tuesday, and its positive impact on its drive to become cash flow positive.
The AIM-traded firm noted that in the past month, the West Texas Intermediate oil price had increased from around $40 per barrel to $45 per barrel which, on its own, "materially enhanced" its cash flow.
It said the increase followed announcements that positive trial results had been achieved for vaccines against the Covid-19 coronavirus.
As it stated on 30 October, Nostra Terra's focus was on increasing cash flow through assets with lasting reserves.
It noted that Covid-19 had a "very negative" impact on the global economy, and thus on oil prices, with the average West Texas Intermediate oil price during the first half of 2020 standing at $25.45 per barrel, compared to $57.39 in 2019.
In addition, during 2020 Nostra Terra said it had made "substantial" reductions in corporate overhead, as well as in lifting costs for its producing assets.
As it had previously announced, some production was temporarily suspended during the period of lower oil prices in order to conserve capital.
Those wells had now been put back online, and production was back above pre-curtailment levels.
The company said it intended to announce production figures from the second half in January.
Completion of the Cypress well at Pine Mills, where the majority of Nostra Terra's interest was carried by the farminee, was also underway, with the board expecting to issue an update on it shortly.
"Given the relatively fixed cost base, both corporate and in the field, the increase in oil prices from $40 to $45 has a significant impact on margins and cash flow to Nostra Terra," said chief executive officer Matt Lofgran.
"This in turn positively affects the value of our reserves and consequently our senior lending facility, which provides capital that can be used for further acquisitions and drilling."
Lofgran said the form was finishing the year in a "much stronger" position than how it started.
"The company, as planned, made significant reductions in corporate overhead and brought lifting costs down further.
"The significance being that any additional production will have that much more positive an impact."
At 1216 GMT, shares in Nostra Terra Oil and Gas Company were up 9.88% at 0.47p.
10 Nov 2020 15:56
Nostra Terra spuds Cypress well at Pine Mills
(Sharecast News) - Texas-focussed oil and gas exploration and production company Nostra Terra announced on Tuesday that the Cypress farm-out well at its Pine Mills oil field had now spudded.
Read more