Last checked at 27 Dec 2017 07:00
27 December 2017
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Company Update
Twin Well, Lending Facility & New Well
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 update on the completion of its well located in Mitchell County, Texas in the Permian Basin, (the "Twin Well"), its continuing discussions to secure a new Senior Lending Facility and the permitting for a new planned well.
Permian Basin - Twin Well
In November the Twin Well was successfully drilled and logged, intersecting more than 113 feet of gross oil pay in aggregate across the target objectives. In addition, logging indicated potential commercial quantities of pay below the main target zone in the Lower Clear Fork Formation.
The completion operation is underway. A Radial Cement Bond Log was run from total depth to surface, with the log indicating good cement through the prospective zones of interest. The Twin Well is consistent with information that Nostra Terra received from a neighbouring operator prior to drilling. This data was used to plan the completion process and the Company is encouraged by the results. The next steps of the completion process, including commercial flow testing, are scheduled for the beginning of January.
Senior Lending Facility
As previously announced, the Company is in the process of securing a new Senior Lending Facility. On securing the Senior Lending Facility this would allow Nostra Terra to accelerate its strategy of developing its lower risk reserves at Pine Mills and across its Permian Basin acreage using non-dilutive funds.
Following the recent update of the Company's Reserves Report by APN Energy (the "Report") (see RNS 07 December 2017), this confirmed a 38% increase in Nostra Terra's net proven reserves (1P) at Pine Mills. Nostra Terra has submitted the Report to one of the banks (the "Bank") it is in discussions with concerning a Senior Lending Facility. The Bank has now confirmed it has sent the Report to its underwriting team. This is the final step of the process prior to approval from the Bank.
A further update is expected on this shortly.
Permitting new well
In anticipation of securing the Senior Lending Facility early in 2018, Nostra Terra intends to initiate the permitting process for the drilling of an additional new well at one of the Company's 24 drill ready locations across its Permian acreage. The permitting process is not dependent on securing the Senior Lending Facility. However, it is the Company's intention to position itself to be able to commence drilling at the new well as swiftly as possible, assuming it receives the approval it expects from the Bank.
Matt Lofgran, Chief Executive Officer of Nostra Terra, commented:
"We've made great progress through 2017. Our operational successes at Pine Mills and the improving oil price have combined to cause a significant positive re-rating in the value of that asset. We're completing our first well in the Permian Basin, and planning additional drilling at one of our 24 drill ready locations. Our free cash flow generation is much better than it has been in recent years and we expect to finish the year having generated record revenue for the Company.
We are really optimistic as we enter 2018 that we can accelerate Nostra's growth and I look forward to providing an update on the Senior Lending Facility and the Twin Well in the coming weeks."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information, visit www.ntog.co.uk or contact:
Nostra Terra Oil and Gas Company plc Matt Lofgran, CEO
| Tel: | +1 480 993 8933 |
Strand Hanson Limited (Nominated & Financial Adviser and Joint Broker) Rory Murphy / Ritchie Balmer / Jack Botros
| Tel: | +44 (0) 20 7409 3494 |
Smaller Company Capital Limited (Joint Broker) Rupert Williams / Jeremy Woodgate | Tel: | +44 (0) 20 3651 2910 |
Notes to Editor:
On 31 October 2017, Nostra Terra announced its third acquisition in the Permian Basin, being the acquisition of a 53.25% Working Interest over a 120 acre lease (the "Lease").
An operator previously drilled a field development well on the neighbouring lease, which produced oil. However, once the operator completed a directional survey of the bottom-hole location it discovered that the well had crossed the boundary of the Lease. The operator of the neighbouring well set a plug back to a shallower depth and completed the well as a saltwater disposal well and has provided all of its data to assist with planning and drilling of the Twin Well.
The drilling and logging operations of the Twin Well were successful, reaching the planned bottom-hole location and intersecting all targeted formations.