Nostra Terra Regulatory News (NTOG)

30 September 2022

Nostra Terra Oil and Gas Company PLC

("Nostra Terra", "NTOG" or the "Company")

Interim Results for the six months ended 30 June 2022

Nostra Terra (AIM: NTOG), the oil and gas exploration and production company with a portfolio of assets in the USA, is pleased to announce its unaudited results for the six-month period ended 30 June 2022. A copy of the Interim Results is available on the Company's website, www.ntog.co.uk  

Financial Highlights

· 108% increase in Revenue for the period to $2,003,000 (30 June 2021: $963,000).

· 381% increase in Gross profit from operations for the period to $1,203,000 (30 June 2021: $250,000 profit).

· 34% increase in total production for the period to 20,383 barrels oil (30 June 2021: 15,211 barrels oil)

o  Average production during first half at 112 bopd net to Nostra Terra (2021: 84 bopd)

o  50% reduction in Finance costs for the period

· Sr. Lending Facility borrowing base increased by 43% from $2,350,000 to $3,350,000

· Fouke #2 well completed and put into production (mid-May)

o  Production surpassed management expectations

· Grant East lease acquired and first well drilled

Post-period events:

· Fouke #2 well reached payback in under 3 months

Chairman's report

The first half of 2022 saw Nostra Terra continue to make good progress in implementing its strategy of realising value from its existing Texas based assets - this has translated into a stronger financial performance.

The ongoing war in Ukraine has kept global energy prices relatively high. This effect is more marked for some fuels than others, notably European gas which is heavily reliant on Russian imports. Though WTI prices have fallen somewhat over the last months, they remain high relative to long term averages. This is anticipated to persist for some time and hence the Company believes it is prudent to continue with its current strategy.

The cashflow produced by the combination of high oil prices and our increased production volumes has allowed Nostra Terra to retire a substantial proportion of its higher-cost debt over the reporting period. The Board had previously identified this as an area where expenditures could be used to good effect on our cost base, helping reduce our finance costs by approximately 50% versus H1 2021 levels.

The Company's cashflow was also used to drill both the Fouke #2 and Grant East #1 wells in H1 2022. Fouke #2 continued the history of good oil flow rates from Pine Mills wells with a stable rate of 140 bbls/day. The Texas Railroad Commission, as local regulator, has been petitioned to have the production limit increased to allow this well and Fouke #1 to produce at higher daily rates. Grant East #1 proved less forthcoming, this was due to the completion rather than a fundamental reservoir issue, however, the lessons learnt from it and the data that it produced provide very useful insights into planning future wells in the area.

In a very tight rig market, workover jobs on five existing Pine Mills have been planned. Two of these wells are now complete and scheduled to be put online shortly, leaving three wells to be completed in the next reporting period. We anticipate that these workovers will lead to a further increase production from this prolific area.

Given the success in the field, resulting in a significant increase in production and combined with stronger commodity prices, we anticipate that our proven reserves will significantly increase. We are in the process of having those estimates prepared by a third-party engineering firm and will publish the results in due course.

We continue to assess new upstream opportunities, both in the US and elsewhere.

We were pleased to welcome Paul Welch as a non-executive director in February this year. Paul brings with him excellent and highly relevant knowledge and experience.

I would like to thank our shareholders for their continued support over the past half year and look forward to updating you on further developments in the future.

Dr Stephen Staley

Chairman

29 September 2022

Chief Executive Officer's report

We had a great first half of the year, delivering on our plans. Our focus has been on increasing cashflow, which we did through a combination of increasing revenues, while lowering our production and finance costs.

We had a record period with over $2 million in revenue which is the highest in the Company's history. More importantly our gross profit was $1.2 million (over $1.4 million after non-cash items), representing a 381% increase, also a record for the Company. Average oil sales prices during the period were $98.28 per barrel.

The Fouke #2 well was drilled and put into production mid-May (only contributing to circa 1.5 months of the 6 months of figures). It significantly exceeded expectations, surpassing even the performance of the Fouke #1 well. Pine Mills has been a great asset for the Company, and we are actively reviewing additional opportunities within our existing leases with similar potential to the Fouke wells.

The Grant East lease was acquired during the period, providing over a dozen drilling locations. The Grant East #1 well was drilled but, as announced in June, flowed an excessive amount of water which impeded the flow of oil in commercial quantities. At a cost of $813,000 this contributed significantly to the loss reported for the period. The well results are being analysed to improve the completion technique for future wells. The Grant East lease, located in the Permian Basin, is a prolific area and adjacent to other wells that Nostra Terra has successfully drilled and completed previously.

We had a record period even while some wells were off-line due to the expansion work on the production facilities at Pine Mills. The primary objective being to increase the capacity of the water injection and disposal system through workovers and recompletions of the injection wells. This work is anticipated to be complete this month after which the off-line wells will be returned to production and the pump rates at currently producing wells will be increased resulting in a further increase in production from this asset.

Finally, and most importantly, this record period has been achieved using only existing resources. As cashflow is now increasing at the fastest rate in the Company's history, the funds generated are being reinvested into growth opportunities while we retire our higher-priced debt. We also anticipate the strong cashflow to continue, resulting in a profit for the full year.

I wish to extend a sincere thank you to our shareholders for your continued support and I look forward to updating you as we continue to grow our Company.

Matt Lofgran

Chief Executive Officer

29 September 2022

Nostra Terra Oil and Gas Company plc

Consolidated Income Statement

for the six months ended 30 June 2022

The Group's operating loss arose from continuing operations.

There were no recognised gains or losses other than those recognised in the income statement above.

Nostra Terra Oil and Gas Company plc

Consolidated Statement of Comprehensive Income

for the six months ended 30 June 2022

Nostra Terra Oil and Gas Company plc

Consolidated Statement of Financial Position as at 30 June 2022

Nostra Terra Oil and Gas Company plc

 Consolidated cash flow statement

For the six months ended 30 June 2022