TIDMNTOG
RNS Number : 8321U
Nostra Terra Oil & Gas Company PLC
23 January 2017
23 January 2017
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Pine Mills Operations Update
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 operations for the Pine Mills oil field
for the first two months since the Company took over as
operator.
Highlights:
In the first two months of company operations at Pine Mills,
Nostra Terra has focused primarily on cutting costs and
streamlining operations. Highlights include:
-- Nostra Terra is the first operator of Pine Mills in the last
3 years (during the low oil price environment) to operate the oil
field profitably
-- Lifting costs in December were US$18.46 per bbl versus $18.93 per bbl in November
-- $99,500 (gross) payment received for oil sold in December 2016
-- Restructured operations to improve Net Operating Margin on an ongoing basis.
o New Operating Margin increased to 42.5% in December, up from
39.4% in November
-- Increased gross Pine Mills monthly production (in which
Nostra Terra has an 80% WI) from 97bopd in November to 100bopd in
December
-- Sold rig and miscellaneous equipment, significantly reduced
overhead expense, freeing up additional capital to be used to
reinvest in Pine Mills or other fields
-- Successful workover in Permian Basin
o Increased working interest prior to operation, now ranging
from 57% up to 68% on all four leases
o Increased production
Pine Mills Operations Update
On assuming the operatorship of Pine Mills, Nostra Terra first
goal was to improve operational efficiency at the oil field. This
has resulted in the initiation of a cost cutting programme and the
sale of non-essential site equipment.
Through careful management of operations and cost control Nostra
Terra has become the first operator in the past three years (during
the low price oil market) to manage the Pine Mills field and
overheads profitably, albeit over a short timeframe. Nostra Terra
expects that the continued track record should also lead to an
improvement in value on the reserve report.
Immediately upon acquisition Nostra Terra performed a re-entry
into an existing wellbore. The operation was successful as the
previously abandoned equipment was retrieved and the wellbore is
now prepared to realize its economic potential.
Further operations are planned to upgrade various equipment at
the batteries, which is expected to increase production.
Last week Nostra Terra received a payment of $99,500 (gross) for
December's oil production. The rapid receipt of payments for oil
production reflects one of the benefits of being an operator.
The following table summarises the results from Pine Mills
following Nostra Terra's initial work programme (all figures are
gross):
Operational area November 2016 December 2016
------------------ -------------- --------------
Production 97bopd 100bopd
------------------ -------------- --------------
Oil sold 97bopd 89bopd*
------------------ -------------- --------------
Net Revenue US$90,802 US$99,481
------------------ -------------- --------------
Lease Operating US$54,972 US$57,272
Cost
------------------ -------------- --------------
Operating Margin US$35,830 US$42,208
------------------ -------------- --------------
Net Operating
Margin 39.4% 42.5%
------------------ -------------- --------------
Lifting Cost US$18.93 US$18.46
per bbl
------------------ -------------- --------------
*Please note the timing of production and pick up can lead to
monthly discrepancies between amount of oil produced and amount of
oil sold.
Nostra Terra expects to report further operational efficiencies
at Pine Mills in due course.
Successful Permian Basin Workover and Increased Production
On 3 November 2016 the Company announced an acquisition and
planned workover of certain leases in the Permian Basin, Texas.
Nostra Terra is pleased to report that this workover was a success.
Nostra Terra acquired interests in four wells on the leases, with
two active and two inactive. Prior to the initial workover Nostra
Terra increased it's working interest ranging from 57.2% to 68% in
the leases. One of the inactive wells in Mitchell County has been
returned to production and oil is being sold. The well was put into
production last week, hence it is too soon to announce stabilized
production figures, however the initial days of production are
encouraging and have exceeded management's expectations.
The workover on this first inactive well added perforations in
the wellbore in a previously non-producing zone and has initiated
production from that zone. This has helped Nostra Terra determine
that potential for further production upside exists both through
workovers and new wells, which the Company can drill at its
discretion.
Nostra Terra has identified similar local opportunities and
anticipates acquiring additional leases in the area, using existing
cash resources.
Matt Lofgran, Chief Executive Officer of Nostra Terra,
commented:
"I am happy to report we have hit the ground running at Pine
Mills and have surpassed my personal expectations for what we could
achieve in the first two months. We expect still to make further
operational improvements at Pine Mills to increase our overall
profit. This will improve the Company's cash position and enable us
to keep making progress using existing cash resources.
We're also happy with the results of the workover in the Permian
Basin, a second focus area for us in Texas. This supports our plans
in the region, both on these leases and other leases we have
identified as acquisition targets. Our goal is to increase our
production steadily in the Permian Basin and increase Nostra's
exposure to this attractive oil province.
As we move into 2017 our focus now switches to improving overall
production at the oil field and our goal is very much to achieve
150 bopd. We look forward to providing further updates in the near
future."
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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