Nostra Terra Regulatory News (NTOG)

Correction to Final Results

This announcement amends and replaces the "Final Results" announcement made by the Company at 07.00 a.m. on 22 May 2014, issued under RNS number 7512H. The revised announcement, which has amendments to the note to the consolidated statement of cash flows and notes 4, 5, 6 and 7 to the financial statements for the year, is set out below.

3 June 2014

Nostra Terra Oil and Gas Company plc

("Nostra Terra" or the "Company")

Final Results for the year ended 31 December 2013

Highlights

• 142% increase in revenue to £851,000 (2012: £352,000)

• Gross profit of £526,000 before depletion, depreciation and amortisation (2012: £192,000)

• Acquired 5% interest in High Plains exploration play then increased interest to 20%

• Raised £750,000 via placing

• Successfully concluded legal action against Richfield Oil & Gas, in a judgement exceeding US$1.6 million

Post balance sheet highlights

• US$25 million credit facility with Texas Capital Bank

• Credit facility borrowing base more than doubled ahead of schedule

• Final payment received in respect of Richfield legal action

• Daily production expected to reach 150 boepd by Q3

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

"Our commitment to adding production and therefore cash generation continued at a pace in 2013 as we became more involved in the Chisholm Trail prospect through the year. Good results from the outset at Chisholm Trail continued with every well brought into production surpassing our initial expectations. While our other producing wells continue to generate revenue, the Chisholm Trail prospect has led to considerable growth in revenue and allowed us to begin reinvesting free cash flow in our expansion going forward."

"Securing the $25m credit facility with Texas Capital Bank will help us to pursue further substantial growth beyond that seen from Chisholm Trail to date."

The Company confirms that its annual general meeting ("AGM") will be held at 11:00am on 18 June 2014 at The Library, Travellers Club, 106 Pall Mall, London SW1Y 5EP. Notice of the AGM is being posted to shareholders today, together with a copy of the full report and accounts. A copy of the report and accounts will also be available to download later today from Nostra Terra's website at www.ntog.co.uk 

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

Chairman's Statement

I am pleased to present the annual report and accounts of Nostra Terra Oil and Gas Company plc for the year ended 31 December 2013. This was a busy and positive year. Significantly, Nostra Terra passed the operational breakeven point, before central costs, depletion, depreciation and amortisation, for the first time in the company's history. We also maintained our strategy of carefully considered growth and significantly increased both production and revenue.

Exploration and production

In the year we made several sensibly judged investments in existing and new fields. More details can be found in the Chief Executive's review on page 4. We continued to build a diverse and balanced portfolio and extended our geographical footprint in line with our stated strategy of finding new hydrocarbon reserves in 'old fields'. Our portfolio is being structured to provide a spread of strong and reliable long-term revenues, and in 2013 we added to its depth.

Financial highlights

I am delighted to report that in 2013 our revenues grew to £851,000 from £352,000 in 2012 - an increase of 142%. During the period we completed a single placing, raising £750,000 at a small discount of just 10%, a fantastic result given the extremely difficult conditions in the UK corporate market at the time. Furthermore, our protracted litigation with Richfield finally reached a successful conclusion, giving us cash to invest without further dilution to shareholders. More recently we also secured a US$25 million credit facility with the highly regarded Texas Capital Bank. This extends our ability to quicken the pace of growth and also gives us the strength and agility to take advantage of the right opportunities when they present themselves.

Summary

Nostra Terra made considerable progress throughout 2013, thanks in large part to the exemplary efforts of our executive directors, Matt Lofgran and Alden McCall, who I thank. I also want to acknowledge Nostra Terra's shareholders for their enduring loyalty to our company.

Sir Adrian Blennerhassett

Chairman

Chief Executive's Review

Nostra Terra is a UK-based oil and gas producer with interests in Texas, Oklahoma, Colorado and Kansas. We aim to increase shareholder value by using advanced technology to find new hydrocarbon reserves in already established fields. Our strategy is to put a diverse portfolio of interests in place in low-risk geographies that will consistently grow production and revenues. To this end, 2013 saw the company make steady progress. We extended our portfolio; we significantly increased the volume of production; and we finally settled a long-running legal action. The year placed Nostra Terra in a very strong cash position and has set us up for further more accelerated growth in 2014.

Extending our portfolio

In 2012 we acquired a 20% interest in the Chisholm Trail Prospect in Oklahoma, assessing it as low-risk and moderate-return. This is exactly what it has turned out to be. Our investments here were consistently successful in 2013, yielding excellent results and justifying our decision to concentrate resources on Chisholm Trail.

Revenues from the first four wells helped us pass the landmark of operational breakeven, before central costs, in January 2013. In particular well CT4 more than doubled our expectations. We decided to exploit the Chisholm Trail opportunity further by partnering in additional wells and in mid-year we acquired additional acreage, giving us access to 21 new potential drilling locations.

Subsequently we've made investments in a further 11 wells to date, bringing the total up to 15 wells. The three new wells that are producing already - CT7, CT8 and CT9 - have increased our total daily production by 57%.

Chisholm Trail continues to allow room for growth and we expect it to yield further significant increases to our net production. It already supplies an extremely valuable revenue stream that supports our ability to pursue other opportunities. Moreover the strength of activity and results have de-risked the Hunton Limestone formation where the Chisholm Trail Prospect is located, and this helped us attract new investment (see Financials below).

In March 2013, we identified an opportunity in Texas with similar potential to Chisholm Trail, and purchased a 5% working interest ("WI") in the High Plains Prospect. This Prospect covers 66 square miles, and is operated by Brown and Borelli, a highly experienced and respected firm.

We subsequently increased our interest to 20% following re-entry of a previously drilled well in the prospect. Work is now ongoing to integrate detailed subsurface mapping and 3D seismic data that will prioritize the prospect areas for drilling. We have assessed High Plains as being more risky than Chisholm Trail, but with the potential for higher rewards. In fact the dependable revenue streams from Chisholm Trail mean we are more comfortably positioned to enter into higher-risk opportunities to strengthen our portfolio. Meanwhile, the geophysical results indicate that High Plains might provide the opportunity to build a healthy pipeline of drilling locations for some years to come.

Net production in 2013

With the expansion of our portfolio, net production to Nostra Terra has risen as detailed in the following table.

Financials

As the chairman said, in 2013 Nostra Terra's revenue grew considerably to £851,000 in 2013, against £352,000 in 2012, due to greatly increased production volumes. This represents an increase of 142%. Gross profit (before depletion, depreciation and amortisation) increased to £526,000, against £192,000 in 2012.

In respect of capital, Nostra Terra raised £750,000 before expenses by way of a placing of 187,500,000 new ordinary shares of 0.1p each with existing and new investors.

I am very pleased to report that the legal action against Richfield Oil and Gas Company was finally resolved in Nostra Terra's favour and the monies owing to us were paid. In all we received over US$1.6 million. Richfield has also voluntarily dismissed all counterclaims against Nostra Terra.

After the balance sheet date we also secured a US$25 million credit facility with Texas Capital Bank, which includes provisions to increase the borrowing base as additional wells are brought on production. We agreed an initial borrowing base of US$500,000 which has increased to $1.1 million following a stabilisation of production rates, as announced on 7 May 2014. This strong credit line will give us the ability to quicken the pace of growth through non-dilutive funds.

An exciting future

We achieved a great deal in 2013. We made careful decisions to expand our interests in the lucrative Chisholm Trail Prospect and diversify into High Plains, broadening our production base. We increased revenue, with our focus now on free cash flow so that we can support more rapid growth in 2014 and beyond.

In the background we have also been building up our operational capabilities to prepare Nostra Terra for a transition towards operating more of our own prospects. We have an exciting future as we look to take much larger steps in growing production and reserves. A very solid foundation has been built from which to accelerate growth.

It only remains for me to thank all Nostra Terra's shareholders for their continuing loyal support. I look forward to giving you regular good news about our company in the months ahead.

Matt Lofgran

Chief Executive Officer

Consolidated income statement for the year ended 31 December 2013

Consolidated statement of comprehensive income for the year ended 31 December 2013

Consolidated statement of changes in equity for the year ended 31 December 2013

Consolidated statement of financial position as at 31 December 2013

Consolidated statement of cash flows for the year ended 31 December 2013

Note to the consolidated statement of cash flows for the year ended 31 December 2013

Reconciliation of loss before tax to cash generated from operations

Notes to the financial statements for the year ended 31 December 2013

1. GENERAL INFORMATION

Nostra Terra Oil and Gas Company plc is a company incorporated in England and Wales and quoted on the AIM market of the London Stock Exchange. The address of the registered office is disclosed on the company information page of the annual report. The principal activity of the group is described in the directors' report in the annual report.

2. BASIS OF PREPARATION

These financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations issued by the International Accounting Standards Board (IASB) as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.

The financial information set out in this announcement does not constitute statutory accounts as defined in the Companies Act 2006, but has been extracted from the relevant audited financial statements. The financial statements for the year ended 31 December 2012 have been delivered to the Registrar of Companies and those financial statements for the year ended 31 December 2013 are expected to be delivered to the Registrar of Companies shortly.

Depletion, amortisation and impairment of oil and gas assets

All expenditure carried within each field is amortised from the commencement of production on a unit of production basis, which is the ratio of oil and gas production in the period to the estimated quantities of commercial reserves at the end of the period plus the production in the period, on a field-by-field basis. Costs used in the unit of production calculation comprise the net book value of capitalised costs plus the estimated future field development costs to access the related commercial reserves. Changes in the estimates of commercial reserves or future field development costs are dealt with prospectively.

Where there has been a change in economic conditions that indicates a possible impairment in an oil and gas asset, the recoverability of the net book value relating to that field is assessed by comparison with the estimated discounted future cash flows based on management's expectations of future oil and gas prices and future costs. Any impairment identified is charged to the income statement as additional depletion and amortisation. Where conditions giving rise to impairment subsequently reverse, the effect of the impairment charge is also reversed as a credit to the income statement, net of any depreciation that would have been charged since the impairment.

3. FINANCE INCOME/EXPENSE

4. OPERATING LOSS FOR THE YEAR

The operating loss for the year is stated after charging/(crediting):

The analysis of administrative expenses in the consolidated income statement by nature of expense:

5. INCOME TAX EXPENSE

The tax charge on the loss for the year was as follows:

At 31 December 2013 the group had excess management expenses to carry forward of £1,127,730 (2012: £1,096,090) and trading losses of £1,564,940 (2012: £1,330,990). The deferred tax asset at 24% (2012: 24%) on these tax losses of £646,240 (2012: £582,499) has not been recognised due to the uncertainty of recovery.

6. EARNINGS PER SHARE

The calculation of earnings per ordinary share is based on earnings after tax and the weighted average number of ordinary shares in issue during the year. For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The group had two classes of dilutive potential ordinary shares, being those share options granted to employees and suppliers where the exercise price is less than the average market price of the group's ordinary shares during the year, and warrants granted to directors and one former adviser.

Details of the adjusted earnings per share are set out below:

The diluted loss per share is the same as the basic loss per share as the loss for the year has an antidilutive effect.

7. RELATED PARTY TRANSACTIONS

Group

As disclosed last year £502,750 of shares were advanced to the group by Matt Lofgran to be held in escrow by Yorkville (YA Global) on behalf of New Horizons One LLC. On 4 October 2013 this was settled by the transfer of 83,956,296 shares to Matt Lofgran by YA Global.

Company

During the year, the company advanced loans to its subsidiaries. The details of the transactions and the amount owed by the subsidiaries at the year-end were:

The intercompany loans are unsecured and interest-free.

8. EVENTS AFTER THE REPORTING PERIOD

On 3 February 2014 Nostra Terra entered into a US$25 million credit facility ("Facility') with Texas Capital Bank ("Bank"). The new Facility contains both a three year Revolving Credit Facility and a Standby Letter of Credit Facility with an initial nominal limit of US$25 million. Interest is charged on monies drawn down at the current rate of 4.25% (determined by the higher of either: the sum of the Wall Street Journal Rate plus 1% or 4.25%). The current borrowing base is US$1.1 million.