LONDON (Alliance News) - Nostra Terra Oil & Gas PLC on Monday outlined plans to drill its first horizontal well on the Mesquite asset in the Permian basin, Texas.
Nostra Terra is in talks to buy a new 160-acre lease at Mesquite, which overall covers over 30,000 acres, of which 1,984 is net to Nostra Terra.
The new area will allow Nostra Terra to drill a half-mile horizontal well to increase its Mesquite reserves. The new lease is near, but not connected to, existing acreage.
Drilling would be funded using existing cash and selling part of the new lease to new investors.
Chief Executive Matt Lofgren said: "This new lease presents an excellent strategic opportunity for Nostra Terra. We see such large potential in the area and plan to increase our footprint, including retaining a larger interest in the Mesquite Asset.
"We will be able to drill our first horizontal well at Mesquite, with the aim of proving reserves for additional horizontal drilling. We intend to do this while retaining full ownership of the acreage we have already secured."
"Much more importantly, we will also preserve our first mover advantage in the wider Mesquite target area. The first horizontal well could deliver substantial cash flow to the company whilst significantly strengthening our position in any future farm-out discussions for Mesquite," added Lofgren.
Nostra Terra shares were 2.8% higher on Monday afternoon at 2.415 pence each.
Nostra Terra (NTOG)