TIDMNTOG
RNS Number : 6334A
Nostra Terra Oil & Gas Company PLC
30 September 2015
30 September 2015
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Interim results for the six months ended 30 June 2015
Nostra Terra (AIM:NTOG), an oil and gas exploration and
production company with a growing portfolio of producing and
exploration prospects, is pleased to announce its unaudited results
for the six months ended 30 June 2015.
Highlights:
Corporate:
-- Revenue for the period of GBP393,000 (30 June 2014: GBP414,000)
-- Gross profit before non-cash items of depreciation and amortization of GBP268,000
(30 June 2014: GBP250,000)
-- New Nomad and Broker appointed
-- New Chairman appointed
Operational:
-- Acquisition of 100% Working Interest in Paw Paw Prospect
-- JV with Independent Resources Plc to expand into Egypt (post-period)
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 &
Broker)
Lindsay Mair/James Thomas Telephone: +44 (0)20 7628 2200
Walbrook PR Ltd (Media Relations)
Gary Middleton/Nick Rome Telephone: +44 (0)20 7933 8797
Chief Executive's report
The industry is going through a very tough time right now with
low and volatile oil prices caused by global oversupply, primarily
driven by horizontal drilling and fracking in the United States.
This has led US focused oil companies to concentrate on capital
discipline and balance sheet strength while they wait for stability
and higher oil prices before committing to new developments. This
has been shown in the drop in US production and drill rigs turning
in recent months.
Recent news stories that non-Arab members of OPEC are lobbying
hard in an effort to get production cuts and therefore higher oil
prices are encouraging, though how effective this will be and how
long it will take is uncertain. While we are not aiming to time the
bottom of the market, we are in a cyclical business and believe the
path of least resistance for oil prices is up. Given this, we
believe it's an opportune time to look for further investments.
Our focus remains in producing basins with conventional
reservoirs, primarily using modern exploration and production
technologies. Our existing production and reserves occur within the
Mid-Continent USA, however we are also finding intriguing
opportunities outside the USAwhich will provide further
diversification going forward. We are targeting existing producing
assets with further upside through exploration. These assets can be
acquired on advantageous terms and with careful application of
leverage.
Towards the end of 2014 and beginning of 2015, we doubled
production putting the Company on a much stronger footing. With
revenue of GBP393,000, we achieved a gross profit for the period
before depreciation and amortization costs of GBP268,000.
We've positioned our White Buffalo Prospect in the Big Horn
Basin of Wyoming, acquired towards the end of 2014 just before the
sharp downturn, to be drill ready for exploration once the market
strengthens. The leases have several more years, which allows us to
maintain the inventory to grow in the future, but without the
pressure of having to spend money to keep them. During the first
half of the year we signed an operator agreement on another larger
prospect in Wyoming with Koch Exploration, a subsidiary of the
second largest private company in the USA. While this is an
exploration prospect, we were able to secure the opportunity with
no acquisition costs. Our plan is to continue to progress it while
promoting some interest to others, thus creating a free carry.
Our debt facilities remain in place providing an alternative to
issuing equity. We've kept the debt at relatively conservative
levels and maintain flexibility to continue our growth.
As we look to grow Nostra Terra organically and globally we
welcomed a new Chairman, Ewen Ainsworth to the Company. Mr.
Ainsworth brings with him a global wealth of experience and
contacts to help Nostra Terra. Most notably he was the CFO of Gulf
Keystone, a company that started as one of the smaller oil &
gas companies on AIM and grew to be one of the largest oil &
gas companies on the London Stock Exchange. We look forward to more
of his contributions as we make much larger strides from here.
Post-period we announced plans to expand into a second focus
area, Egypt and the surrounding region. Our plans are to acquire
existing producing assets with further exploration potential. This
approach allows us to acquire assets of lower risk, already
generating revenues, where leverage can be applied to the
acquisition. Once assets are acquired we will look to quickly
improve efficiencies through tighter cost controls and improved
operations.
We appreciate the support from our shareholders and look forward
to updating them on the progress of the Company in the coming
months and into 2016.
Matt Lofgran
Chief Executive Officer
29 September 2015
Chief Operating Officer's Report
We have stated that the oil and gas industry of the United
States was entering an exciting period of change, characterized by
a dramatic shift in the application of assets. We were positioned
to expand beyond our current platform of reliable partners and
strong lender relationships to acquire some of these assets. The
former strategy was to apply horizontal drilling and completion
techniques to known producing formations where they had not been
previously applied. Although that is still a viable pathway, the
acquisition of producing assets that are held by over-levered
operators presents an even greater opportunity without exploration
risk.
White Buffalo was acquired at the beginning of the downturn. The
prospect covers 6,100 net mineral acres of leases in the Big Horn
Basin of Wyoming. It represents the Company's first step into a
basin, which has been producing oil and gas since early 1900's.
According to the US Department of Interior, more than 3.3 billion
BOE have been produced from 48 separate formations across 139 oil
and gas fields. Importantly, a study by the United States
Geological Survey projects that a mean of 1 billion BOE (barrels of
oil equivalent) additional resources remain to be discovered from
both conventional and unconventional sources. Independent
assessment by Haas Engineering, of White Buffalo has projected a
mean potential recovery of 13 million barrels of oil to Nostra
Terra.
As the decline in oil prices continued, it was determined to
postpone further exploration risk until prices have recovered. The
Company has idled any further work on the White Buffalo project,
awaiting improvement in prices. More than three years remain before
the majority of leases begin to expire and most have extension
provisions beyond that as well.
During the first half of 2015 we entered into two agreements in
South Texas. This was part of a drill-to-earn on larger prospects.
We acquired a small interest in each at a very low cost, providing
us optionality for expansion should the results prove up. The
initial wells were drilled and put into production. The operator
decided to do additional work on each well almost immediately and
we are waiting to see the outcome before committing ourselves
further.
NTOG located another very attractive opportunity in the Big Horn
Basin of Wyoming during the first half of this year. The Paw Paw
Prospect consists of 2,280 acres under lease by Koch Exploration
Company. The Company will earn interests in the Paw Paw Prospect by
drilling wells ("Farmout"). It is expected to earn more than 80%
Net Revenue in wells drilled. The unit will support up to 25
development wells and independent assessment from Haas Engineering
supports the ultimate recovery of 7.3 million barrels of oil, if
successful.
The Farmout did not require costs of leasing and seismic
acquisition, usually associated with exploration projects. We are
in the process of creating an Exploration Unit, along with
permitting through the Bureau of Land Management and State of
Wyoming. During this time we will also become a bonded operator in
Wyoming.
The Company's disciplined approach has established a stable
revenue platform across several partnerships in this portfolio. It
is the portfolio that enables us to move into much larger prospects
as the energy lending relationships provide us with much of the
capital required. The Company owns 100% of both While Buffalo and
Paw Paw. NTOG will operate the wells and will further reduce
exposure through the sale of promoted interests to industry
partners. In this manner, we will continue to grow our
portfolio.
Alden McCall
Chief Operating Officer
Nostra Terra Oil and Gas Company plc
Consolidated statement of comprehensive income
For the six months ended 30 June 2015
Six months Year to
Six months to 30 June 31 December
to 30 June 2014 2014
Note 2015 Unaudited Unaudited Audited
GBP'000s GBP'000s GBP'000s
Revenue 393 414 1,267
Cost of sales 3 (1,065) (452) (1,666)
--------------- ----------- -----------------------------
Gross profit/(loss) (672) (38) (399)
Share based payment - - (19)
Administrative expenses (378) (313) (318)
(MORE TO FOLLOW) Dow Jones Newswires
September 30, 2015 02:02 ET (06:02 GMT)
--------------- ----------- -----------------------------
Operating loss (1,050) (351) (736)
Finance
income - - -
Finance expense (11) (11) (107)
--------------- ----------- -----------------------------
Loss before
tax (1,061) (362) (843)
Taxation - - -
--------------- ----------- -----------------------------
Loss for the financial
period (1,061) (362) (843)
--------------- ----------- -----------------------------
Other comprehensive
income
Exchange gain/(loss)
on translation of foreign
ops. (19) (114) (249)
--------------- ----------- -----------------------------
Total comprehensive
income for the period (1,080) (476) (1,092)
=============== =========== =============================
Loss per share
Attributed to:
Equity holders of
the company
Basic and
diluted 4 (0.032p) (0.017p) (0.029p)
--------------- ----------- -----------------------------
The Company's operating loss arose from continuing
operations.
There were no recognised gains or losses other than those
recognised in the income statement above.
Nostra Terra Oil and Gas Company plc
Consolidated statement of financial position as at 30 June
2015
As at As at 31
As at 30 30 December
June 2015 June 2014 2014
Unaudited Unaudited Audited
Note GBP'000s GBP'000s GBP'000s
Assets
Non-current assets
Other intangibles 3,545 3,689 4,283
Property, plant, and equipment 483 571 521
4,028 4,260 4,804
----------- ---------- ---------
Current assets
Trade and other receivables 163 223 491
Deposits and prepayments 53 258 -
Cash and cash equivalents 526 122 861
742 603 1,352
----------- ---------- ---------
Current liabilities
Trade and other payables 229 708 293
Borrowings - 325 1,010
229 1,033 1,303
----------- ---------- ---------
Net current assets 513 (430) 49
----------- ---------- ---------
Non-current liabilities
Other loans 7 1,380 645 612
----------- ---------- ---------
Net assets 3,161 3,185 4,241
=========== ========== =========
Equity
Capital and reserves
Share capital 8 3,360 2,776 3,360
Share premium account 11,060 9,991 11,060
Translation reserve (194) (40) (175)
Share option reserve 139 119 138
Accumulated deficit (11,204) (9,661) (10,142)
Total equity 3,161 3,185 4,241
=========== ========== =========
Nostra Terra Oil and Gas Company plc
Consolidated cash flow statement
For the six months ended 30 June 2015
Six months Year to
Six months to 30 31 December
to 30 June June 2014 2014
2015 Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Cash generated/(consumed)
by operations 5 79 247 222
Interest paid - - (163)
---------------- ------------------ --------------
Net cash outflow
from operating activities 79 247 59
---------------- ------------------ --------------
Cash flows from investing
activities
Sale/(purchases)
of plant and
Equipment (18) (143) (245)
Purchase of intangibles
- new oil properties (174) (979) (2,527)
Proceeds from sale
of assets - - 295
Net cash from investing
activities (192) (1,122) (2,477)
---------------- ------------------ --------------
Cash flows from financing
activities
Proceeds on issue
of shares - - 1,653
Repayment of borrowings (381) (966)
New borrowing (net) 159 626 2,221
---------------- ------------------ --------------
Net cash from financing
activities (222) 626 2,908
Increase/(decrease)
in cash and cash
equivalents (335) (249) 490
---------------- ------------------ --------------
Cash and cash equivalents
at the beginning
of the period 861 371 371
---------------- ------------------ --------------
Cash and cash equivalents
at the end of the
period 526 122 861
================ ================== ==============
Nostra Terra Oil and Gas Company plc
Consolidated statement of changes in equity
For the six months ended 30 June 2015
As at As at As at
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
As at beginning of
period 4,241 3,661 3,661
Other comprehensive
income (19) (114) (249)
Deficit for the period (1,061) (362) (843)
Share based payments - - 19
Issue of share capital
net of expenses - - 1,653
As at end of period 3,161 3,185 4,241
========= ========= =============
Nostra Terra Oil and Gas Company plc
Notes to the interim report
For the six months ended 30 June 2015
1. General Information
Nostra Terra Oil and Gas Company plc is a public limited company
incorporated in England with a company number 05338258 and quoted
on the AIM market of the London Stock Exchange Plc.
2. Basis of Preparation
This interim report, which incorporates the financial
information of the Company, has been prepared using the historical
cost convention, on a going concern basis and in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the European Union, using accounting policies which are consistent
with those set out in the financial statement for the year ended 31
December 2014. This interim financial information for the six
months ended 30 June 2015 was approved by the Board on 29 September
2015.
The unaudited results for the year ended 30 June 2015 do not
constitute statutory accounts within the meaning of Section 435 of
the Companies Act 2006. The comparative figures for the 12 months
ended 31 December 2014 are extracted from the statutory financial
statements which have been filed with the Registrar of Companies
and which contain an unqualified audit report, did not draw
attention to any matters by way of an emphasis of matter paragraph
and contained no statement under Section 498 (2) or (3) of the
Companies Act 2006.
Copies of this interim statement are available from the Company
at its registered office at Finsgate, 5-7 Cranwood Street, London
EC1V 9EE. The interim statement will also be available on the
Company's website www.ntog.co.uk.in accordance with Rule 26 of the
AIM Rules for Companies.)
(MORE TO FOLLOW) Dow Jones Newswires
September 30, 2015 02:02 ET (06:02 GMT)
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