Nostra Terra Oil & Gas Company PLC Operational & Financing Update for Pine Mills (5154R)
December 12 2016 - 2:00AM
UK Regulatory
TIDMNTOG
RNS Number : 5154R
Nostra Terra Oil & Gas Company PLC
12 December 2016
12 December 2016
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Operational & Financing Update for Pine Mills
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 an operational and financing update for its
recently acquired Pine Mills oil field in Texas (the
"Acquisition").
Highlights
-- Management has completed first site visit to Pine Mills,
since Nostra Terra took over operatorship last month
-- As expected, Nostra Terra's operations team has identified:
o Significant cost savings across operations at Pine Mills
o Initial workover targets to deliver potential near-term,
incremental increases in oil production
-- Work has commenced on an updated reserves report, initially
being undertaken by internal personnel
-- Nostra Terra plans to raise additional non-dilutive funds via
hedging a portion of current production from Pine Mills for further
development
Operational update
On completion of the Acquisition, Nostra Terra's management and
Dallas-based operations team had several meetings with Pine Mills'
existing operational personnel to discuss current and future work
plans. Following these operational meetings and site visit, Nostra
Terra has made good progress in identifying the short-term
priorities for further development of the oil field.
Nostra Terra's immediate goal is to reduce operational overheads
to improve profitability of Pine Mills. As previously announced,
current lifting costs at Pine Mills are below $30 a barrel. Based
on due diligence completed prior to completion of the Acquisition
and work completed in the first week as the field's operator,
Nostra Terra's operational team believes it has identified
significant potential cost savings that can be introduced quickly.
Nostra Terra will report to the market as it makes progress in
implementing these cost-cutting measures.
Further, Nostra Terra's operations team has created an initial
workover schedule for a number of existing oil wells, with the
expectation of delivering near-term, incremental increases in daily
oil production. Work will commence immediately on the first well
targeted. Beyond this, the operations team will produce a more
comprehensive field-wide plan for the development of Pine Mills to
increase overall production.
Updated reserves report
Since completion of the Acquisition, Nostra Terra has commenced
work on an updated reserves report on Pine Mills initially using
internal personnel, to be released as soon as it is available. It
is the Company's expectation that, following release of this
report, it will be audited by an independent party.
Financing update
Nostra Terra is preparing to raise further non-dilutive funds
through hedging a portion of its current production at Pine Mills.
Nostra Terra plans to use these funds for further workovers and
drilling at Pine Mills.
By implementing a careful hedging policy, Nostra Terra will be
able to hedge a portion of current production in order to secure
returns, while leaving the Company further room for upside. This
balances short-term capital requirements with the longer-term
desire to maximize returns.
Matt Lofgran, Chief Executive Officer of Nostra Terra,
commented:
"I am delighted at the fast progress our team is making at Pine
Mills. We are looking forward to providing further updates as we
increase production and improve profitability at the field.
Our strategy over 2016 has been to position Nostra ahead of
recovery from the recent bear market. Our goal is to continue
targeting and growing assets with lifting costs below $30 per
barrel.
Thanks to our recent acquisitions, Nostra now stands to benefit
meaningfully from being able to hedge a portion of future
production at much higher prices. We will use funds raised from
hedging, together with the additional $600,000 cash received from
the sale of our interest in the Chisholm Trail, to focus on further
increasing production and reserves.. As a result, the board would
like to assure shareholders that there are no immediate funding
needs for the company."
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 +1 480 993 8933
Strand Hanson Limited
(Nominated & Financial Adviser and
Joint Broker) +44 (0) 20 7409 3494
Rory Murphy / Ritchie Balmer
Vicarage Capital Limited (Joint Broker) +44 (0) 20 3651 2910
Rupert Williams / Jeremy Woodgate
This information is provided by RNS
The company news service from the London Stock Exchange
END
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