Hot Features
Premium
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
I have to admit scratching my head to see (LSE:NTOG) Nostra Terra Oil & Gas is this low post positive update today, with game changing events forecast for second half of 2015. This US onshore play is a Gem.
Firstly before we get into details Northland Securities short term target is still 0.46p combined with the fact WTI seems to have bottomed this could well be the bottom range for Nostra.
Chrisoil has always said in previous exclusive article interviews with CEO Matt Lofgran Nostra Terra Oil on Shareprophets its at least a two year hold for ten bagger potential. The only reason for this very low share price is the main news driven events operationally on the ground are in the second half of 2015. However further value M&A could come at anytime and would suggest if oil turns in the first half of this year you will see some updates.
I communicated with Matt this morning and Nostra is looking at producing assets as well as M&A plus futher land deals so should be interesting times ahead.
The operational news stated 102% increase in production with December net production averaging 169 bopd on the Chisholm Trail . With attention to further operators targeting the Oswego formation which derisks Nostra and helps establish a third horizontal play within the prospect creating a “multiplier effect”.
As we expected High Plains has been delayed 20% interest due to the oil environment by the overall operator. However this is no bad thing at the present time conserving the cash that would have been needed on this low risk exploration well. However permits have been prepared and expect drilling to commence this year with WTI heading back up.
White Buffalo 6,000 acres is clearly the game changer at Big Horn Basin. Lets remember some facts this field has 13m recoverable of oil, twenty times the size of Chisholm Trail with 100% interest. Where Nostra can control its own destiny. Based on the geology there are two producing fields nearby the White Buffalo onshore prospect producing from the phosphoria formation, these are the Manderson Field 1951 and Cotton Creek Field 1953. Combine this with a picture produced by Nostra of the 1922 Greybull oil gusher. I say the situation looks ten bagger potential on a market cap of £5m micro cap.
The RNS clearly highlights the first well will be horizontal proving the play and gathering information funded through cash conservation and increased production from Chisholm Trail. I am sure Matt is benefiting from supply contract capex reductions. However the long term plan is still to farm this acreage down at a good price. New 2D survey for the 1H 2015 around the follow on horizontal wells is planned.
Remember i estimate breakeven on these wells because they are conventional frack plays with all in costs no more than $25 a barrel. To be frank without looking into new accounts this could be $20 a barrel onshore.
I sense Matt is doing all the right things reducing cash burn increasing production mainly from Chisholm Trail. Together with introducing bank reserve facility on very good terms together with the last funding well placed before the oil slump shows management is up to the ball. Combine this with looking to buy further opportunities, production, M&A or land wise in the Mid Continent of USA. I would say this is a bargain addition to my Falkland plays.
I repeat news events H2 2015.
Until the next time more ramblings from the castle can be seen @chrisoil
If you are interested in Nostra you can register with advfn to get access to excellent data including level 2 and bulletin information by registering below
You can also hear an excellent podcast interview with me chrisoil about NTOG on my blog via podcast section.
http://www.chrisoil.blogspot.co.uk
