TIDMNTOG
RNS Number : 2257G
Nostra Terra Oil & Gas Company PLC
23 November 2015
AIM: NTOG 23 November, 2015
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Quarterly Production and Operations Update
Quarterly production increase of 232% 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
and Egypt, is pleased to provide an operational and production
update for the third quarter of 2015.
Highlights
-- Expansion in USA - Paw Paw Prospect (Wyoming)
-- Significant additional production from Joint Venture in Egypt
- East Ghazalat (Western Desert)
-- Quarterly production increase of 232% over same quarter last year
-- Quarterly production of 24,492 boe (net of royalties)
-- Quarterly revenues reached US$530,921 (net of royalties)
Monthly Production (Net)
Production* Revenue (USD)**
----------- ---------------------- ------------------------------
Month USA Egypt Total USA Egypt Total
----------- ------ ------ ------ -------- --------- ---------
July 2,027 6,787 8,814 $63,153 $144,726 $207,879
----------- ------ ------ ------ -------- --------- ---------
August 1,809 6,292 8,101 $52,038 $108,911 $160,949
----------- ------ ------ ------ -------- --------- ---------
September 1,671 5,906 7,577 $57,323 $104,820 $162,143
----------- ------ ------ ------ -------- --------- ---------
*Net to Nostra Terra's working interests after royalties.
**Revenue in Egypt is the accrued combination of cost recovery
and profit oil attributed to NTOG. The average realised price for
3Q was $47.20 per barrel.
In the USA during August and September two of the larger
contributing wells were temporarily offline causing a decrease in
production. Repairs have taken place and production has since been
restored to previous levels.
Q3 2015 Operations Update
During recent quarters we have communicated that while the
industry struggles, we believe it is a cyclical industry that will
recover in time, and now is a great time to acquire assets and
grow. This quarter the Company has commenced executing on those
plans.
Nostra Terra plans to expand into three different Focus Areas,
where within each of these areas the primary focus is on cash
flow.
Nostra Terra has now expanded into a second Focus Area, where it
is already in production, and when appropriate plans to expand to
an eventual third Focus Area. To that end we are seeking assets
that are already in production and generating revenue, or prospects
with existing discoveries where significant upside could result in
further development and exploration wells in the near term.
The large increase in production and revenues is attributed to
the acquisition of a producing asset in Egypt (see East Ghazalat
below). The Company sold 24,492 barrels of oil equivalent in the
third quarter bringing in approximately US$530,921 of revenue. This
represents an increase of 182% in production and 66% in revenue
over the previous quarter alone.
Paw Paw Prospect (Wyoming, USA)
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.
Nostra Terra has been working diligently to secure an
Exploration Unit ("Unit") from the government. The primary benefit
from a Unit is the ability to operate multiple leases as a single
lease under a single operator. This process allows for better,
controlled development, hence is an important step in creating
value to the prospect. We anticipate announcing results of this
shortly.
At the same time, we continue to progress toward becoming an
operator in the State of Wyoming along with getting necessary
permits to drill.
Nostra Terra currently has a 100% working interest in this
prospect, where Koch Exploration, a subsidiary of the second
largest private company in the USA retains an overriding royalty
interest until payout with the right to convert to a working
interest. As the oil markets strengthen Nostra Terra plans to sell
a promoted interest to other oil companies while keeping a carried
working interest and operating. A contract operator has already
been working with the Company at various stages of the planning
process. This allows Nostra Terra to scale up accordingly and drill
larger prospects while maintaining lower overheads.
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.
East Ghazalat (Western Desert, Egypt)
During the quarter Nostra Terra entered into a joint venture
("JV") agreement with Independent Resources, an AIM listed
exploration and production company focused on the acquisition of
producing assets in the Mediterranean and North Africa region, and
a similar strategic intention to that of Nostra to invest in
producing or near-production assets.
The initial acquisition from the JV is a 50 per cent interest in
the East Ghazalat concession in Egypt for US$3.5 million, operated
by North Petroleum, a wholly-owned subsidiary of China ZhenHua Oil
Co, Ltd, a Chinese state-owned oil company. The effective date of
the closing was 1 July 2015, hence production and revenues are
reflected this quarter.
The immediate priorities of JV are to improve operating margins
through cost reduction initiatives, and to implement further
reserve enhancement opportunities in a disciplined and rigorous
manner.
South Texas (Eagle Ford Trend)
Earlier this year Nostra Terra announced the investment of 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.
The Board has decided to concentrate its efforts on other
assets, both in and outside the USA. As such we will not be
investing any more into the South Texas prospect.
Outlook
We believe that the continuing lower oil price environment this
year presents an increasing number of opportunities. Nostra Terra
will continue to seek for growth through acquisitions of assets
within its focus areas, in known existing oil provinces such as the
USA and Egypt. We are currently evaluating further opportunities
and look forward to updating shareholders at the appropriate
time.
Matt Lofgran, Chief Executive Officer of Nostra Terra,
commented:
"We're very pleased to show a significant increase in both
production and revenues for the quarter during a time in the
industry where many companies are struggling. We feel it's a great
time to grow our asset base and the acquisition in Egypt represents
an excellent second focus area for the Company. We will continue to
seek other opportunities similar to East Ghazalat, both in the USA
and beyond while remaining focused on cash flow.
During the quarter NTOG welcomed Ewen Ainsworth to the position
of Non-executive chairman during a very active period for the
company. Ewen's global experience is a strong asset to the board as
we embark on the next level of growth for the company.
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
Nick Rome
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
This information is provided by RNS
The company news service from the London Stock Exchange
END
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