Nostra Terra Regulatory News (NTOG)

23 February 2017

Nostra Terra Oil and Gas Company plc

("Nostra Terra" or the "Company")

Second Permian Basin acquisition and Receipt of funds

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, Texas, along with the receipt of US$100,000 in connection with the previously announced sale of its interest in the Chisholm Trail Prospect.

Highlights

· 18 drilling locations

o 9 proven locations

o 9 probable locations

· 75% working interest

· Producing leases with 9 existing wells

o Infrastructure in place

o Workovers planned imminently

· All acreage and locations Held By Production ("HBP")

· Receipt of US$100,000, released from escrow

Acquisition of producing assets in the Permian Basin

In keeping with its Permian Basin strategy, Nostra Terra is pleased to announce the acquisition of a package of 3 producing assets for $60,000, funded from existing cash resources. These leases include a 75% WI in 9 wells across an additional 200 acres in Mitchell County, and 18 future drilling locations.

Currently 2 of the 9 wells are producing, 5 are shut in and there is 1 injection well. The wells are producing circa 2 bopd gross, however potential exists across the leases for workover opportunities. A rig is currently being scheduled for the first of these workovers, which is also funded through existing cash resources.

As with the previous acquisition in the Permian Basin, all 3 leases are Held By Production (HBP), meaning they have no expiration date and no required work programme and remain in effect so long as the leases remain in production. The 18 future drill locations have been identified over 2 separate formations. These include 9 proven and 9 probable infill drilling locations.

Nostra Terra has identified further possible acquisition targets in the same area.

Permian Basin Strategy

In November 2016 the Company made its first acquisition into the Permian Basin and anticipated further acquisitions. Nostra Terra's strategy is to purchase shallow conventional assets across this commercially attractive oil province and to increase its Permian Basin production incrementally, through the acquisition of producing leases which have potential for growth through low-cost workover programmes. Nostra Terra plans to fund this strategy through existing cash resources and free cash flow from its portfolio of producing assets.

The leases in the first acquisition included a 57% to 68% Working Interest ("WI") in 4 wells across 50 acres in Mitchell County. Since then Nostra Terra has completed an initial low-cost workover, leading to a more than three-fold increase in production, from 2 bopd to 7.5 bopd 30 day average. Importantly, the leases of Nostra Terra's first Permian acquisition are also HBP. These leases now have two new proven development locations that can be drilled as and when the Company decides.

Following this second acquisition Nostra Terra has now increased its inventory to 20 future drilling locations, (11 of which are proven). Because all leases are HBP the Company can elect to drill any of these locations when it chooses to do so and conditions allow.

As a result of these acquisitions Nostra Terra has now taken its first steps in this area of the prolific Permian Basin, which offers the Company a material increase in the potential production upside available to it. As operator of HBP licences Nostra Terra is in complete control of the pace and timing of development.

Receipt of $100,000

Nostra Terra has received the $100,000 held in escrow in connection with the sale of its interest in the Chisholm Trail Prospect, as was announced on 8 December 2016. This represents the conclusion of the sale of the Company's Chisholm Trail Prospect, which the board of Nostra Terra ("Board") believes was appropriate given the circa 20 fold increase in acreage costs since the original acquisition.

Company Funding

In recent months, following a succession of value-creating events and transactions by the Company and recent increased interest in the oil sector, Nostra Terra has received approaches from brokers with unsolicited offers of equity investment into the Company. Nostra Terra declined those approaches, as the Company has no immediate funding need.

However, given the current environment in the oil & gas space, the board of Nostra Terra ("Board") has identified a number of deals that have significant potential to enhance shareholder value and accelerate Nostra Terra's growth but which would require further funds. As such, the Board decided in the second half of last week to accept an offer to raise funds at a premium to the current share price.

As announced on 20 February 2017, the Board decided not to proceed with the placing. This was due to Nostra Terra's share price falling on Friday afternoon, as a result of social media commentary.The Company is now no longer moving forward with the funding offer.However Nostra Terra is currently funded and will continue to grow organically, using existing cash and free cash flow from its producing assets.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

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

"We've worked hard over the last 12 months identifying appropriate targets for acquisition in our efforts to rebuild Nostra Terra. We now have a robust pipeline of potential opportunities and are poised to continue growing. Our acquisition targets range from prospects the size of today's acquisition to significantly larger ones.

As keen as we are to take Nostra to the next level, we will only enter into new transactions which the company can afford. As should be clear, we are only prepared to do business at the right price.

The success we've had in the sale of our interests in the Chisholm Trail Prospect along with the acquisition of the Pine Mills oil field are further vindication of Nostra's ability to identify assets with potential for value appreciation, in producing oil regions during the current downturn in crude oil prices. I believe this skillset will have an important role to play over the coming years as we deliver significant value to shareholders."

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