Nostra Terra Regulatory News (NTOG)

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AIM:NTOG 22 February 2016

Nostra Terra Oil and Gas Company plc

("Nostra Terra" or the "Company")

Permian Basin Acquisition

Nostra Terra (AIM:NTOG), the oil and gas exploration and production company with a portfolio of assets in the USA and Egypt, is pleased to announce the acquisition of producing assets in the Permian Basin of New Mexico from Alamo Resources II, LLC.

Highlights

· Significant increase in production and reserves

o Total proved (1P) reserves 2,655 Mbbl of oil and 553 MMcf gas as at 1 October 2015, 1,648 Mboe attributable to NTOG

· Permian Basin with stacked pay

· Shallow (~2,000') conventional oil

· Lifting cost approximately $17 per barrel

· Significant amount of upside available from proven (1P) reserves not currently producing (currently less than 20% producing)

· 100% Operated, 100% Held By Production

o 2,880 gross (2,732 net) acres

o NTOG will be the operator

o Operator fully controls development pace and costs

· Steady, predictable PDP production base

o 55 active vertical producing wells and 12 active injector wells

o Nov 2015 average production of 122 bopd gross (92 bopd net)

o Shallow declines

· Total Net Proven (1P) Reserves of 2.7 million boe (99% oil), 1.65 million attributable to NTOG

o Multiple low cost, low risk optimization opportunities

o 6 behind-pipe recompletions/re-stimulations/workovers/return-to-production cases

o 3 water flood projects in various stages of development surrounded by successful analogs

o 54 PUD vertical locations with EURs ranging from 31 to 43 Mbo/well

Acquisition

Nostra Terra has agreed to pay US$3.0 million to acquire a 60% WI in producing assets located in the Permian Basin. US$2.7 million is due by 31 March 2016 ("Closing") and an additional US$0.3 million is due one year after the anniversary of Closing, payable in cash or shares in Nostra Terra at the discretion of Nostra Terra. Nostra Terra anticipates financing the acquisition with a debt facility covering all the acquisition cost. The net cash flow in the current oil price environment will service the debt while excess cash may be reinvested.

The assets generated turnover of approximately $1.80 million for the year ended 31 July 2015, with a profit before tax of approximately $0.25 million, (which included $1.02 million non-recurring expenses). Nostra Terra's working interest of 60% would give a pro forma turnover of approximately $1.08 million revenue and profit before tax of approximately $0.15 million at current oil prices.

Reserves

Total net proven reserves (1P) of 2,747 Mboe (2,655 Mbbl of oil and 553 MMcf gas) as at 1 October 2015, 1,648 Mboe attributable to NTOG

· Net proven and developed producing reserves ('PDP') estimated at 424 Mbbl of oil and 347 MMcf gas as at 1 October 2015.

· Net proven developed non-producing reserves ('PDNP') estimated at 447 Mbbl of oil and 140 MMcf gas as at 1 October 2015.

· Net proven undeveloped reserves ('PUDS') estimated at 1,784 Mbbl of oil and 66 MMcf gas as at 1 October 2015.

Permian Basin

The Permian Basin is one of the premier oil and gas producing regions of the United States. Straddling New Mexico and Texas, the Permian Basin is approximately 240 miles wide and 300 miles long. In June 2014 the Permian Basin was estimated to be the world's second largest oil field in terms of total recoverable resource, with at least 75 billion barrels of oil equivalent present.

In January 2016, the US Energy Information Administration (EIA) estimated that the Permian Basin's crude oil production amounted to just over 2m barrels a day in December 2015, a 0.7% gain on November, but a 12% rise over December 2014. Of the seven most prolific oil and gas producing regions of the United States the Permian Basin is the only one which has continued to increase production on a quarter by quarter basis since the start of 2015.

The EIA calculates that the average Permian Basin rig added production of 412 bpd in December 2015, an 80% rise since December 2014. Although the active rig count has fallen from 548 in December 2014 to 212 in December 2015, oil production has grown sharply in the same period from around 1.75m bpd to around 2m bpd.

Reflecting industry interest in the Permian Basin, Chevron put a number of large scale US oil and gas projects on hold in January, choosing instead to focus its efforts on development of its Permian licenses. When explaining the rationale for its change in strategy, Chevron said the Permian Basin has proven to be the most cost efficient basin within the United States.

Matt Lofgran, Chief Executive Officer of Nostra Terra, commented:

"We're excited about the acquisition of these assets in the Permian Basin, one of the most prolific basins in the world. The leases will add significantly to our production, revenues, and reserves. While we will add over 1.6 million barrels of proven reserves, less than 20% of that is currently producing, providing scope for significant improvement. The leases are 100% operated and 100% HBP (not at risk of expiring), meaning Nostra Terra will be the in full control of the development pace.

The industry is facing a difficult time with low oil prices which most in the industry believe to be temporary. This creates an opportunity-rich environment where assets such as these can be acquired at much better prices than previously. By having the stable production base we're able to use debt to acquire producing assets where net cash flow can service the debt while still providing free cash flow to the Company. We are actively pursuing additional opportunities to continue our growth, some of which are in advanced negotiations."

Further updates will be made in due course.

Tom Ervin, consultant to Nostra Terra, 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. Ervin is a Geologist, a member of SIPES, and the Dallas Acquisition and Divestitures and Mergers group.

For further information, visit www.ntog.co.uk or contact:

Nostra Terra Oil and Gas Company plc

Matt Lofgran, CEO Telephone: +1 480 993 8933

mlofgran@ntog.co.uk

Sanlam Securities UK Limited

(Nominated adviser and broker)

Simon Clements / James Thomas Telephone: +44 20 7628 2200

Walbrook PR

Gary Middleton / Nick Rome Telephone: +44 207 933 8797

Glossary:

1P Proven reserves

Boe Barrel(s) of oil equivalent

Bopd Barrel(s) of oil per day

HBP Held By Production

EUR Estimated Ultimate Recovery

Mbbl Thousand barrels

Mbo Thousand barrels of oil

Mboe Thousand barrels of oil equivalent

MMcf Million Cubic Feet

NRI Net Revenue Interest

PDP Proven Developed Producing (Reserves)

PDNP Proven Developed Not Producing (Reserves)

PUD Proven Undeveloped (Reserves)

WI Working Interest