Last checked at 21 Aug 2015 07:00
AIM: NTOG 21 August, 2015
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Quarterly Production and Operations Update
Quarterly production increase of 112% over same quarter last year
Nostra Terra (AIM:NTOG), the oil and gas exploration and production company with a growing portfolio of assets in the USA, is pleased to provide an operational and production update for the second quarter of 2015.
Highlights
· Quarterly production increase of 112% over same quarter last year
· Quarterly production of 8,663 boe (net of royalties)
· Quarterly revenues reached US$319,219 (net of royalties)
· Exploratory investment in South Texas, Eagle Ford trend
· Expansion in Wyoming, PawPaw Prospect
Monthly Production (Net)
Month
| Total Net* Production (BOE) | Revenue (USD) |
April | 3,140 | $109,520 |
May | 2,827 | $101,499 |
June | 2,696 | $108,200 |
*Net to Nostra Terra's working interests, after royalties
(NRIs range from 78% to 81%)
Q1 2015 Operations Update
The continuing low oil price environment in the second quarter brought both challenges but also opportunities to invest. Many operators in the USA have taken the view that it is better to receive a higher return for their investment when oil prices recover, as many experts have forecasted for later this year. This obviously has an impact on Nostra Terra as regards to the prospects where we don't operate, such as Chisholm Trail and High Plains. However, at the same time this environment is delivering new opportunities to invest at much more attractive levels than last year.
Despite the challenges faced and the lowest oil prices since 2009 we continue to receive a return on our production portfolio with 8,663 barrels of oil equivalent sold in the second quarter bringing in US$319,219 of revenue.
Chisholm Trail Prospect (Oklahoma)
Multiple formations have been drilled and successfully tested. Economics for existing horizontal wells remain positive, however operators have significantly slowed down drilling in 2015. Because high percentages of production are obtained in the first several months, the Company believes it is better to wait for higher oil prices than to produce relatively large volumes at lower prices. Nostra Terra will continue to evaluate new proposals as they are made by operators.
White Buffalo (Wyoming)
We have very good lease terms with White Buffalo, our exploration play, which mean that we have the luxury of being able to wait for more favourable oil prices before investing money and time into the project. As indicated above, the environment for investment in drilling has fallen since the collapse in the oil price. We also don't want to sell much of the potential oil from this prospect at these prices, when many experts are predicting rising oil prices in the near future. We see a better use of our resources at the moment, in investigating assets which are very compelling economically at these depressed prices. As the oil price and the appetite for investment in new wells recover, we will increase our workload on this prospect.
South Texas (Eagle Ford Trend)
Earlier this year Nostra Terra announced the investment in a 1% Working Interest in two prospects, San Miguel and Don Pedro. The small interest was subscribed as a preliminary commitment with minimal cost, reserving the possibility of increasing the Working Interest pending results.
Each of the Prospects have been drilled and completed. The wells have been swab tested and surface equipment has been installed. Production figures will be reported as soon as the figures become available from the operator.
Paw Paw Prospect (Wyoming)
We completed Farm Out negotiations for the Paw Paw Prospect from Koch Exploration in July of this year. The prospect is based on analysis of 3D seismic which indicated that a fault closed feature exists along a fault trend in Big Horn County, Wyoming. The Prospect is considered to be directly analogous to the Enigma Field which has produced a cumulative total of 3.6 million barrels of oil.
Haas Engineering (third-party reservoir engineer) has projected that the potential resource of the leased acreage could be as much as 7.368 million barrels of oil from primary and secondary recovery.
As previously announced, Nostra Terra is progressing this prospect towards drilling through: Wyoming licensing for operations, negotiations with drilling and completion contractors, creating an Exploration Unit, state and Federal permitting, and discussions with other exploration and production companies that could potentially acquire interests in the prospect.
Outlook
The concentration remains on areas of "stacked pay" and will be acutely focused on investing where the economics are strong, despite the lower current oil prices. We are particularly interested in assets that are already producing, or are drilling, or drill-ready immediately. We are seeing an increasing number of potential assets available for acquisition and anticipate that will continue as the markets adjust to lower commodity prices.
Matt Lofgran, Chief Executive Officer of Nostra Terra, commented:
"During the Second Quarter the two most significant events for the Company were bringing on a new Chairman with extensive industry and exchange experience, and signing of an agreement with Koch Exploration, a subsidiary of the second largest private company in the USA. While we believe these two events can have a very positive effect for shareholders it should also signal to others the strength and ambition to grow the Company and drive shareholder value in the future.
We will continue to seek out opportunities to grow the company during this time of lower asset value while keeping overheads low."
The technical information within this announcement has been reviewed by Alden McCall, the Company's Chief Operating Officer, a Certified Petroleum Geologist and a member of the American Association of Petroleum Geologists and the Society of Petroleum Engineers.
Glossary
`boe' means barrels of oil equivalent: a unit of energy based on the approximate energy released by burning one barrel (42 US gallons or 158.9873 litres) of crude oil.
`boepd' means barrels of oil equivalent per day
'mcfd' means Thousand Cubic Feet per Day
'NRI' means Net Revenue Interests
'WI' means Working Interest
For further information, visit www.ntog.co.uk or contact:
Nostra Terra Oil and Gas Company plc
Matt Lofgran, CEO
mlofgran@ntog.co.uk Telephone: +1 480 993 8933
Sanlam Securities UK Limited
(Nominated adviser and broker)
Lindsay Mair / James Thomas / Jamie Vickers Telephone: +44 20 7628 2200
Walbrook PR
Gary Middleton Telephone: +44 207 933 8797