Nostra Terra Regulatory News (NTOG)

27 February 2019

Nostra Terra Oil and Gas Company plc

("Nostra Terra" or the "Company")

£1.15 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 £1.15 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: