TIDMNTOG
RNS Number : 7889X
Nostra Terra Oil & Gas Company PLC
02 September 2020
2 September 2020
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Acquisition of Producing Assets, Issue of Shares and TVR
Nostra Terra (AIM: NTOG), the oil & gas exploration and
production company with a portfolio of development and production
assets in Texas, USA, is pleased to announce the acquisition of a
100% Working Interest in the Caballos Creek Oil Field, a producing
oil field with additional development opportunity in Atascosa
County Texas.
Highlights
-- Independently assessed PV10 US$1,052,300 for proved reserves
o Proved reserves as at 30 June 2020 of 92,100 boe (gross)
o Remaining economic life of 16 - 32 years per well
-- Shallow, conventional, oil producing assets
-- 745 acres, all held-by-production ("HBP")
-- 100% working interest ("WI"), with NTOG assuming operatorship
-- 30 bopd current production (gross), which increases Company-wide production by circa 25%
-- Financed entirely without dilution
-- Estimated payback less than 2 years
Further details on the Acquisition
The primary assets are shallow, vertical oil wells producing 30
bopd gross (22 bopd net of royalties) with further development
potential. Proven reserves (producing and non-producing) are PV10
US$1,052,300 with estimated remaining economic life of the wells
ranging from 16 years to 32 years per well, per third-party
engineering report performed by Netherland Sewell & Associates
("NSAI").
The acquisition represents an approximately 25% increase in
total Company daily production, from year end 2019, financed
entirely without dilution. As at 30 June 2020, NSAI estimated
proved remaining reserves of 92,100 boe gross, 69,300 boe net. For
the year ended 31 December 2019, the assets generated turnover of
c. $0.35 million and profit-before-tax of c. $0.22 million.
Nostra Terra has entered into an agreement to acquire 100% WI in
the assets from Oro Resources LLC and Oro East Tx LLC for
US$425,000, which is anticipated to close within the next week. The
acquisition includes 5 producing wells, 2 injectors, and 1 shut-in
producer located on 745 acres in Atascosa County Texas. The entire
acreage is HBP, hence the leases will continue in perpetuity due to
the existing producing wells. The primary producing formations are
the Miocene Hockley, Navarro, and the Olmos. The previous owner
made a significant investment in the current infrastructure
(estimated over $500,000), providing room for further development.
The Company estimates that the assets will reach payback of the
acquisition cost in less than 2 years (based on current production
rate and $40 oil price).
Acquisition Financing
Nostra Terra has arranged non-dilutive financing from an
unconnected third-party in the amount of $430,000. The financing is
a loan note carrying an 8% coupon, 10-month term, with a $30,000
redemption fee (the "Loan Note"). The Loan Note has limited
recourse only to the assets in Atascosa County. Nostra Terra plans
to move the financing for the acquired assets over to its existing
Senior Facility prior to the Loan Note being due.
Issue of new Ordinary Shares to Consultants and Directors
3,846,154 new ordinary shares of 0.1 pence each in the capital
of the Company ("Ordinary Shares") ("Consultant Shares") and
3,000,000 warrants over Ordinary Shares, exercisable for a period
of two years at a price of 0.60 pence per Ordinary Share, have been
issued to the Company's US consultants assessing the acquisition
and finance of the assets. The Consultant Shares were issued at a
deemed price of 0.3p per Consultant Share.
As previously announced on 8 June 2020, the Directors of Nostra
Terra agreed to be paid for 3 months of their annual remuneration
in new Ordinary Shares in order to further improve the cash flow of
the Company, with such shares to be issued at a time to be
determined in the future by the Board. Accordingly, Mr Staley, Mr
Lofgran, and Mr Stafford have each been issued 4,166,667,
12,179,487, and 2,500,000 new Ordinary Shares ("Director Fee
Shares"), respectively, at a deemed price of 0.30p per Director Fee
Share.
The cash fees currently being deferred for all Board members
will continue to be deferred for the time being to allow the
financial position of the Company to continue to improve.
Messrs Staley, Lofgran, and Stafford are interested in
8,166,667, 50,705,463 and 2,500,000 ordinary shares respectively,
representing 2.15%, 13.36% and 0.66% of the Company's enlarged
issued share capital.
This demonstrates the start of our stated growth plan, continued
the alignment of Directors and shareholders, and commitment of the
Board to the future success of Nostra Terra.
Admission to Trading on AIM and Total Voting Rights
Application will be made for the admission of the Consultant
Shares and the Director Fee Shares, totalling, in aggregate,
22,692,308 new Ordinary Shares, to trading on AIM, which is
expected to occur at 8.00 a.m. on or around 7 September 2020.
Following Admission, the Company will have 379,520,534 Ordinary
Shares in issue, none of which will be held in treasury.
Accordingly, the total number of voting rights in the Company will
be 379,520,534 and shareholders may use this figure as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change to their
interest in, the Company under the FCA's Disclosure Guidance and
Transparency Rules.
Matt Lofgran , Nostra Terra 's Chief Executive Officer,
said:
"The first half of 2020 was relatively quiet from an acquisition
perspective as the Board took a very measured approach to assessing
the turbulent economy, board changes and oil price environment.
Considerable effort has taken place since to identify assets that
make money in a low oil price environment, and to which we could
add to our portfolio on good terms while being cautious about
dilution.
We're very excited about the acquisition of these assets. We're
acquiring low risk, producing assets, with average life over 20
years, immediately adding net cash flow to the Company, all with
non-dilutive financing."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014
For further information, contact:
Nostra Terra Oil and Gas Company
plc
Matt Lofgran, CEO Email: +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
Novum Securities Limited (Joint
Broker)
Jon Belliss
Tel: +44 (0) 207 399 9425
Lionsgate Communications (Public
Relations)
Jonathan Charles Tel: +44 (0) 7791 892509
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END
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