11
November 2024
Nostra Terra Oil and Gas Company Plc
("Nostra Terra" or "the Company")
Production and Operations
Update
Nostra Terra (AIM: NTOG), the
international oil & gas exploration and production
company that is focused on its Pine
Mills producing asset in Texas USA,
is pleased to provide a production and operations
update on the Company.
Highlights
·
Phase 1 workover program complete
·
Production increased at Pine Mills Field by an
average of 30 BOPD - 60% Increase
·
Company oil production is averaging approximately
120 bopd net, up significantly
·
Enhanced oil recovery project in the northern end
of Pine Mills restarted
·
More work-over opportunities identified
·
New Fouke area development location adds 200,000
barrels of oil reserves*
·
Field operating costs reduced by 25%
·
Field netbacks and profitability, significantly
increased
·
Cash flow positive at the operating level and now
also at the corporate level
Production
Company oil production is currently
averaging 120 bopd net, up significantly due to the contribution
from the first phase of the planned workover program at Pine Mills
in which NTOG has a 100% working interest ("WI"). Five
previously shut-in wells have been returned to production. Pine
Mills is currently averaging 80 bopd gross. This field rate does
not include the Fouke production or any benefit from restarting of
the enhanced oil recovery project or "waterflood". To date, the
work-over program has resulted in a production increase by an
average of 30 barrels of oil per day ("bopd") from the five
restarted wells.
The work in the field, combined with
the recent technical work, has identified a number of additional
profitable work-over candidates that are expected to be completed
in a second phase of the work-over program.
The waterflood in the northern
section of the field, which had been shut for over two years, has
also been restarted. The waterflood response is expected to take
approximately three months from the restart of injection to see the
first results, with the full benefit expected after six months of
continuous injection. The full benefit of the waterflood response
is expected to deliver an additional 15-30 bopd.
The Fouke 1 & 2 oil wells in
which NTOG has a 32.5% WI are producing at a combined average of
105 bopd gross, water-free, and without decline since May
2024.
Recently completed technical work in
the Fouke area has identified a 30-acre structure within the
current lease, north of the Fouke 2 well, that is drill-ready and
expected to contain more than 200,000 barrels gross of recoverable
oil reserves (*) in the sub-Clarksville reservoir. Further work is
also being done to evaluate two additional structures within the
field that may have similar potential.
Operating Costs, Netbacks, and Profitability
As a result of the recent work-over
activity, several changes have been made to the field operations in
Pine Mills, which has reduced the overall operating costs by
approximately 25%. These reductions, combined with the recent
production increases, have reduced the lifting costs per unit by
more than 50%. This has improved netbacks to more than $44 and $63
per barrel for the Pine Mills and Fouke areas, respectively,
significantly increasing overall field profitability.
Lower costs and higher netbacks are
a direct result of the strategy formulated in May 2024 to focus on
the Pine Mills Field, which was in decline and had not been a
priority under previous management. Cost reductions, coupled with
the workover program results, have increased production, improved
profitability, and allowed NTOG to become cash flow positive at the
operating or field level and also at the corporate level at current
oil prices.
Paul Welch, Nostra Terra's Chief Executive Officer,
said:
"We are delivering on our plans to reduce costs, increase
production, and grow our cash flow by focusing our efforts on our
Pine Mills asset. It's been more than five years since an extensive
work-over program was conducted in the field, and the results on
the first five wells have exceeded our original expectations. We
have also restarted the waterflood, which will take three months to
show results, and we believe this has the potential to deliver an
even greater boost to field performance.
Pine Mills has been an exceptional resource for the Company
and can potentially deliver more value in the future.
Following this successful work-over program, we have identified
additional wells in other areas of the field that will be addressed
in a second work-over phase. We have also identified other targets
for future programs. In addition, we have recently identified a new
drill-ready development location in the Fouke area, which we
believe possesses another 200,000 barrels of additional oil
reserves, and we are also at an early stage in evaluating two
further structures that we think could have similar
potential.
The changes we've implemented have delivered significant
savings and allowed us to improve our margins by more than 50%,
with a corresponding improvement in the netbacks. This results in
NTOG being cash flow positive at the operating level and now at the
corporate level.
I
am excited about this asset's future potential and believe it will
significantly exceed our previous estimates. I look forward
to reporting on our newly identified opportunities in future
periods."
Note (*): NTOG Management calculated proved undeveloped
reserves (based on the SPE PRMS Standard).
Qualified Person's Statement
In accordance with the "AIM Rules -
Note for Mining and Oil and Gas Companies", the
information
contained within the announcement
has been reviewed and signed off by Paul Welch, Chief Executive
Officer and Director, who has over 35 years of international oil
and gas industry experience and is a Member of the SPE.
Glossary
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bopd
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Barrels of oil per day
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Gross Production
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Production at a total project level
(100% basis) before royalties
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Net Production
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Net production attributable to a
participant's Working Interest before royalties
|
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Royalty
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A type of entitlement interest in a
resource that is free and clear of the costs and expenses of
development and production to the royalty interest owner. A royalty
is commonly retained by a resources owner (lessor/host) when
granting rights to a producer (lessee/contractor) to develop and
produce that resource. Depending on the specific terms defining the
royalty, the payment obligation may be expressed in monetary terms
as a portion of the proceeds of production or as a right to take a
portion of production in-kind. The royalty terms may also provide
the option to switch between forms of payment at discretion of the
royalty owner.
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SPE
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Society of Petroleum
Engineers
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SPE PRMS
|
A standard for the definition,
classification, and estimation of hydrocarbon resources developed
by the Oil and Gas Reserves Committee of the Society of Petroleum
Engineers and named the Petroleum Resource Management
System
|
|
Proved Reserves
|
An incremental category of estimated
recoverable quantities associated with a defined degree of
uncertainty. Proved Reserves are those quantities of petroleum
that, by analysis of geoscience and engineering data, can be
estimated with reasonable certainty to be commercially recoverable,
from a given date forward, from known reservoirs and under defined
economic conditions, operating methods, and government regulations.
If deterministic methods are used, the term "reasonable certainty"
is intended to express a high degree of confidence that the
quantities will be recovered. If probabilistic methods are used,
there should be at least a 90% probability that the quantities
actually recovered will equal or exceed the estimate.
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Undeveloped Reserves
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Those quantities expected to be
recovered through future investments: (1) from new wells on
undrilled acreage in known accumulations, (2) from deepening
existing wells to a different (but known) reservoir, (3) from
infill wells that will increase recovery, or (4) where a relatively
large expenditure (e.g., when compared to the cost of drilling and
completing a new well) is required to recomplete an existing
well.
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Working Interest
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A participant's equity interest in a
project before reduction for royalties or production share owed to
others under the applicable fiscal terms.
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This announcement contains inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) No. 596/2014, as it forms part of UK Domestic Law
by virtue of the European Union (Withdrawal) Act 2018. Upon the
publication of this announcement, this inside information is now
considered to be in the public domain.
For further information,
contact:
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Nostra Terra Oil and Gas Company
plc
Paul Welch, CEO
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Email:
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paul@ntog.co.uk
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SP Angel Corporate Finance
LLP
(Nominated Adviser and
Broker)
Stuart Gledhill / Richard Hail /
Adam Cowl
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Tel:
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+44 (0) 20 3470 0470
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Celicourt Communications
(PR/IR)
Mark Antelme / Jimmy Lea
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Tel: Email:
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+44 (0) 20 7770 6424
NTOG@celicourt.uk
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