TIDMNTOG
RNS Number : 8356P
Nostra Terra Oil & Gas Company PLC
15 October 2019
15 October 2019
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Mesquite and Corporate Update
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 provide an update on permitting
at the Company's Mesquite asset, as well as a general corporate
update.
Highlights
-- Completion of leasing 160-acre standalone asset within the Mesquite asset
o Lease is surrounded by commercially productive wells on all
four sides
-- The lease provides an excellent opportunity for horizontal drilling
o Well design complete, and well permitting currently
underway
-- Production from existing assets remains in line with that
reported in the Company's 30 June 2019 interim results
-- Company continuing its evaluation of potential acquisition targets
Leasing Complete, Permitting Underway
Leasing of the 160-acre standalone asset within the Mesquite
Target Area ("Target Area") has been completed. The target area
covers over 30,000 acres in the prolific Permian Basin of which
Nostra Terra now has approximately 2,000 acres, within which the
160-acre standalone lease is surrounded by production wells on all
four sides.
The lease provides the Company and potential partners with the
opportunity to drill a minimum of two horizontal wells, each with
approximately a half-mile lateral within formation, or
approximately eight vertical wells based on 20 acre spacing, in a
single formation. Additional wells could be drilled in other
formations.
The permitting process is now underway. The Company is
permitting two wells; one in the standalone 160-acre lease, and the
other in the core Mesquite acreage. Well design is now complete.
Both wells have been designed with optionality to drill a vertical
well first that could be used as a pilot well to core and test the
target formation, to help make further determinations on the
lateral portion of the well. The wells could then either be put
into production at that point as a vertical well, or kick-off
horizontal drilling into the lateral from the original vertical
wellbore.
Drilling permits are expected to be received by the Company in
the coming weeks.
Corporate Update
As previously communicated, Nostra Terra is seeking to grow
through acquisition as well as organically through drilling
existing assets.
Production from existing assets remains in line with that
reported in the Company's 30 June 2019 interim results.
The Company is preparing to drill new wells on existing leases
whilst also spending considerable efforts identifying and pursuing
acquisitions of existing producing assets. In terms of
acquisitions, we are currently seeing a number of opportunities to
acquire producing assets at very attractive multiples of net cash
flow, and where we could use leverage at attractive rates to
finance the majority of the acquisition cost.
Matt Lofgran, Chief Executive Officer of Nostra Terra, said:
"Leasing can be unduly complex when dealing with several mineral
owners simultaneously, but we now look forward to the formal
permitting application process. The 160-acre lease represents an
excellent opportunity for Nostra Terra to drill its first
horizontal well with a half-mile lateral in the Permian Basin.
Furthermore, we are in various stages of negotiations to acquire
additional producing assets, most of which are in the Permian
Basin, and are working hard to complete the right deals at
attractive valuations. We anticipate that any acquisition will be
cash generative and immediately accretive to earnings, which could
prove transformational to the Company."
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 Tel: +1 480 993 8933
Strand Hanson Limited
(Nominated & Financial Adviser and Joint
Broker) +44 (0) 20 7409
Rory Murphy / Ritchie Balmer / Jack Botros Tel: 3494
+44 (0) 207 186
Shard Capital Stockbrokers (Joint Broker) 9952
Damon Heath / Erik Woolgar Tel:
Lionsgate Communications (Public Relations) +44 (0) 203 697
Jonathan Charles Tel: 1209
About Nostra Terra
Nostra Terra is seeking to increase oil production and reserves
through both organic growth and strategic acquisitions, utilising
the latest drilling and completion techniques.
Nostra Terra's core asset is a 100% working interest in the
Mesquite asset located in the prolific Permian Basin, West Texas.
The Mesquite asset covers 1,984 net acres with estimated proven
recoverable reserves of 2.4mmbbls.
In addition, Nostra Terra has a 100% working interest in the
well-established East Texas region, and interests in three
additional Permian Basin properties in close proximity to Mesquite
and is currently producing from two wells. The first well reached
pay-out in less than one year.
The Permian Basin, which covers 75,000 square miles over West
Texas and southeast New Mexico, is the most prolific oil producing
basin in the country.
For further information, please visit our website:
www.ntog.co.uk.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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