Interim Results for six months ended 30 June 2024

Nostra Terra Oil & Gas Company PLC
19 September 2024
 

September 19, 2024

 

Nostra Terra Oil and Gas Company PLC

 

Interim Results for the six months ended 30 June 2024

 

 

Nostra Terra (AIM: NTOG), the oil and gas exploration and production company with a portfolio of assets in the USA, is pleased to announce its unaudited results for the six-month period ended 30 June 2024. A copy of the Interim Results is available on the Company's website, www.ntog.co.uk.

 

Financial Highlights

·    $938,000 Revenue for the period (30 June 2023: $1,472,000)

·    $230,000 profit before non-cash items (depletion, depreciation, amortisation and interest)

·    $792,000 loss for the period (30 June 2023: $48,000 profit)

 

Operational and Strategic Highlights

·    12,593 barrels oil total production for the period (30 June 2023: 21,265 barrels oil)

·    Change in Leadership with relevant skill set and experience; now focusing on cashflow

·    New CEO (Paul Welch) taken over from Founder after 15 years with a clear plan for organic growth at Pine Mills

 

Post-period events:

·    Strengthened Executive and BOD with exceptional in-depth O&G / Permian experience

·    Clear plan to improve Pine Mills' production and step-up in cash flow by year end

·    Significantly trimmed G&A: concentrating on Pine Mills while divesting non-core assets (South & West Texas)

·    On 17 July 2024, following approval at general meeting, the company announced the subdivision of ordinary shares of £0.001 each into one Deferred Share of £0.0009 and one Ordinary Share of £0.0001 each.

·    On 29 July 2024, the company raised £450,000 (before expenses) through a placing and subscription of 1,499,999,998 new ordinary shares.

 

Chairman's report

 

The first half of 2024 was a period of change for Nostra Terra.  New leadership and a newstrategy to focus and reinvest in our core Pine Mills asset asset was announced in June 2024 and put into effect post period end with the implementation of with a clear plan to increase Pine Mills' production and step-up cash flow by year end.

 

Operationally, Nostra Terra operated during the first half of 2024 in an environment of generally lower oil prices than in 2023. Despite a strengthening of WTI prices in the first quarter of this year, they have subsequently been on a downward path. At the time of writing, prices for WTI October delivery sit just below $70 per barrel.

 

The review of existing 3D seismic data over the Pine Mills area yielded potential new locations that could host wells with similar (highly attractive) performance characteristics to our existing Fouke wells. These new locations represent considerable, relatively low risk upside to our existing resource base in the area.

 

Cost reduction initiatives, are expected to show an impact on the 2024 full-year results. The Pine Mills work involves enhancing or reinstating production from a number of existing wells in a cost-effective manner. These investments are expected to have short payback times and are also likely to have a positive impact on the results in the second half of the current financial year. This work is now well underway, and we hope to be able to announce initial results in the coming weeks.

 

Nostra Terra's board saw several changes in the first half of this year, with Matt Lofgran stepping down as CEO, and Paul Welch moving from non-executive director to take on that role, Jim Newman, our largest shareholder, joined the board as a non-executive director. Mr. Newman established his equity position in the Company through his participation in a successful fundraise by the Company of £300,000 in January 2024

 

Post period-end, we were pleased to announce the appointment of SP Angel Corporate Finance LLP as both sole broker and as nominated advisor to the Company. Cost reduction initiatives have also continued, with the board of directors being focused on managing the Company's cash flow.

 

I would like to thank shareholders for their continued support and look forward to updating them on further developments.

 

 

Dr Stephen Staley

Chairman

19 September 2024

 



 

Chief Executive Officer's report

 

Production was down in the first half of the year due to declines in the Pine Mills wells, the sale of non-performing assets in West Texas and the cessation of production in South Texas.

 

Revenue was $938,000 during the first half of the year (30 June 2023: $1,472,000). Gross loss from operations for the period was $792,000 (30 June 2023: $48,000 profit). Average oil sales prices during the period were $74.45 per barrel (30 June 2023: $70.00 per barrel).

 

Production declines, which started in the second half of 2023, continued into the reporting period.  However, the issues behind the increased decline rates have been addressed, and the field rates are now stable. Our cost reduction initiatives started during the second half of the reporting period and post period, have now been fully implemented.  The asset disposal process continues with two properties remaining to be sold.  The initial disposal of the West Texas assets (Coleman and Raschke) significantly reduced the operating costs in the area.  The remaining asset, the Grant lease, is now operating profitably, and the offers received were insufficient to justify a sale.  In South Texas, two assets are in a sale process as a package and have attracted multiple interested parties and offers but these sales have yet to close.  The Company has no further investment plans for these assets, and they will continue to be actively marketed until they are sold.   

 

The proceeds of the successful £450,000 fundraising, before expenses, carried out in July 2024, are being used to fund a new strategic initiative in Pine Mills. These funds are being used to return six currently idle wells back to production in the Pine Mills field.  There are currently two workover rigs in the field, and two of the six planned workovers are now complete, with the remainder expected to be complete by the end of September 2024.  The target of these first six workovers is to increase field production by 38 bopd, net to NTOG, and I look forward to updating the market once we have evaluated the workovers' impact.

 

Finally, concurrent with the technical study ongoing with the 3D seismic review, we have also initiated a second technical study in the Fouke area to provide pressure support.  The Fouke 1 and 2 are still producing water-free and appear to be some distance from an active aquifer. The high volumes these wells have produced has reduced the reservoir pressure locally, and these wells are expected to benefit from additional water injection to increase reservoir pressure.  This study aims to determine how best to increase the reservoir pressure locally and how much this will increase production rates and, ultimately, the reserve base. 

 

I also wish to sincerely thank our shareholders for their continued support. I look forward to updating you as we continue to grow our Company.

 

 

Paul Welch

Chief Executive Officer

19 September 2024

 

For further information, visit www.ntog.co.uk or contact:



 

 

Nostra Terra Oil and Gas Company plc

Paul Welch, CEO

Email:

paul@ntog.co.uk

 

 

 

SP Angel Corporate Finance LLP

(Nominated Adviser and Broker)

Stuart Gledhill / Richard Hail / Adam Cowl

Tel:

+44 (0) 20 3470 0470

 

 

 

Celicourt Communications

(PR/IR)

Mark Antelme / Jimmy Lea

Tel:

Email:

+44 (0) 30 7770 6424

NTOG@celicourt.uk





 

Nostra Terra Oil and Gas Company plc

 

Consolidated Income Statement

for the six months ended 30 June 2024

 


 

 

 

 

Unaudited

Six months to

30 June

2024

Unaudited

Six months to

30 June

2023

Audited

Year to

31 December 2023

 

Note

$'000

$'000

$'000

 

Revenue


 

938

 

1,472

 

2,816

 

Cost of sales





Production Costs


(708)

(647)

(1,408)

Depletion, depreciation, amortisation


(290)

(295)

(617)

Total cost of sales


(998)

(942)

(2,025)

GROSS (LOSS)/PROFIT


(60)

530

791

Share based payment


(20)

(40)

(41)

Administrative expenses


(532)

(319)

(870)

Foreign exchange (loss)/gain


(7)

(5)

(6)

 

OPERATING (LOSS)/PROFIT


 

(619)

 

176

 

(126)



 

 

 

Finance costs


  (179)

(138)

(368)

Other income


6

10

22

(LOSS)/PROFIT BEFORE TAX


(792)

48

(472)

Income tax


-

-

-      

(LOSS)/PROFIT FOR THE PERIOD

 

 


(792)

48

(472)

Attributed to:


 

 

 

Owners of the company


(792)

48

(472)

Earnings per share expressed in cents per share:

Continued Operations




 

 

Basic (cents per share)

3

(0.08)

0.006

(0.06)

Diluted (cents per share)

3

(0.08)

0.005

(0.06)

 

 





The Group'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 Comprehensive Income

for the six months ended 30 June 2024

 

 

 

Unaudited

Six months to

30 June

2024

Unaudited

Six months to

30 June

2023

Audited

Year to

31 December 2023

 

 

$'000

$'000

$'000

(LOSS)/PROFIT FOR THE PERIOD

Other comprehensive income:

 

(792)

48

(472)

Currency translation differences

6

-

-

-      

Total comprehensive income for the period

 

(792)

48

(472)

Total comprehensive income attributable to:





Owners of the company

 

 

(792)

48

(472)

 

 


 





 

Nostra Terra Oil and Gas Company plc

 

Consolidated Statement of Financial Position as at 30 June 2024

 

 

 

 

 

 

Unaudited

As at 30 June

2024

Unaudited

As at 30 June

2023

Audited

As at 31 December 2023

 

 

Note

$'000

$'000

$'000

ASSETS


 

 

 

Non-current assets





Intangible assets


2,259

2,519

2,389

Property, plant and equipment

- oil and gas assets


1,062

1,215

1,230


 

3,734

3,619

Current assets





Trade and other receivables


687

571

548

Deposits and prepayments


11

64

28

Cash and cash equivalents


52

125

26

 


750

 760   

602

LIABILITIES





Current liabilities





Trade and other payables


1,176

761

924

Borrowings


85

164

110


 

1,261

925

1,034

NET CURRENT LIABILITIES


(511)

(165)

(432)

 

Non-current liabilities




Decommissioning liabilities


405

361

382

Borrowings


4,319

4,203

4,319



4,724

4,564

4,701

NET LIABILITIES


(1,914)

(995)

(1,514)

EQUITY AND RESERVES





Share capital

4

8,492

8,142

8,142

Share premium


22,130

22,115

22,115

Translation reserve


(676)

(676)

(676)

Share option reserve


491

463

464

Retained losses


(32,351)

(31,039)

(31,559)



(1,914)

(995)

(1,514)

 

Nostra Terra Oil and Gas Company plc 

 Consolidated cash flow statement
For the six months ended 30 June 2024

 

 

 

 

 

 

Unaudited

Six months to 30 June 2024

Unaudited

Six months to

30 June 2023

Audited

Year to

31 December 2023



$'000

$'000

$'000

Cash flows from operating activities

Operating income (loss) for the period


 

(792)

 

48

 

(473)

Adjustments for:





Depreciation of property, plant and equipment

 

 

 

142


154


324

Amortisation of intangible assets


125

121

251

Depletion


23

21

42

(Profit)/Loss on disposal of Fixed Assets


11

-

-

(Profit)/Loss on disposal of Intangibles


65

-


Foreign exchange loss (gain)


7

(5)

6

Share based payment


20

40

41

Other Income


(6)

(10)

(22)

Operating cash flows before movements in working capital


 

(405)


369


169

(Increase) /decrease in receivables


(139)

(13)

19

Increase/(decrease) in payables


251

(295)

(89)

Increase/(decrease) in deposits and prepayments


 

17


2


38

Interest paid


179

138

369

Net cash (used)/generated by operations


(97)

201

506

 


 

 

 

Cash flows from investing activities


 

 

 

Purchase of intangible assets


(25)

(416)

(416)

Purchase of plant and equipment


(76)

(64)

(248)

Disposals


56

2

2

Increase in decommissioning liabilities


-

21

42

Net cash from investing activities


(45)

(457)

(620)

Cash flows from financing activities





Proceeds from issued share capital


372

-

-

Net borrowing


(25)

387

377

Finance costs


(179)

(138)

(369)

Net cash from financing activities


168

249

8

Increase/(decrease) in cash and cash equivalents


 

26


(7)


(106)

Cash and cash equivalents at the beginning of the period


 

26


132


132

Cash and cash equivalents at the end of the period


 

52


125


26

 


 

 

 


 

Nostra Terra Oil and Gas Company plc

 

Consolidated Statement of Changes in Equity

For the six months ended 30 June 2024

 


Share

capital

Deferred shares

Share

premium

Share option reserve

Translation reserve

Retained losses

Total


$'000

$'000

$'000

$'000

$'000

$'000

$'000

As at 1 January 2024

1,593

6,549

22,115

464

(676)

(31,559)

(1,514)









loss for the period

-

-

-

-

-

(792)

(792)

Shares issued, net of expenses

350

-

22

-

-


372

Cost of warrants issued

-

-

(7)

7

-

-

-

Share based payments

-

-

-

20

-

-

20

As at 30 June 2024

1,943

6,549

22,130

491

(676)

(32,351)

(1,914)

 


Share

capital

Deferred shares

Share

premium

Share option reserve

Translation reserve

Retained losses

Total


$'000

$'000

$'000

$'000

$'000

$'000

$'000

As at 1 January 2023

1,593

6,549

22,115

423

(676)

(31,087)

(1,083)









Income for the period

-

-

-

-

-

48

48

Share based payments

-

-

-

40

-

-

40

As at 30 June 2023

1,593

6,549

22,115

463

(676)

(31,039)

(995)

 


Share

capital

Deferred shares

Share

premium

Share option reserve

Translation reserve

Retained losses

Total


$'000

$'000

$'000

$'000

$'000

$'000

$'000

As at 1 January 2023

1,593

6,549

22,115

423

(676)

(31,087)

(1,083)









Loss for the year

-

-

-

-

-

(472)

(472)

Shares issued, net of expenses


-


-

-

-


Expired options & warrants

-

-

-




-

Share based payments

-

-

-

41

-

-

41

As at 31 December 2023

1,593

6,549

22,115

464

(676)

(31,559)

(1,514)

 

 



 

Nostra Terra Oil and Gas Company plc

 

Notes to the interim report

For the six months ended 30 June 2024

 

1.             General Information

 

Nostra Terra Oil and Gas Company plc (Nostra Terra) is a company incorporated in England and Wales and quoted on the AIM market of the of the London Stock Exchange (ticker: NTOG). The principal activity of the group is disclosed as described in the report Chairman's statement and Chief Executive Officer's Report.

 

2.             Basis of preparation

The consolidated interim financial information for the 6 months to 30 June 2024 has been prepared in accordance with the measurement and recognition principles of UK adopted international accounting standards and accounting policies that are consistent with the Group's Annual report and Accounts for the year ended 31 December 2023 and that are expected to be applied in the Group's Annual Report and Accounts for the year ended 31 December 2024. They do not include all of the information required for the full financial statements and should be read in conjunction with the 2023 Annual Report and Accounts which were prepared in accordance with UK adopted international accounting standards.

 

The comparative financial information for the year ended 31 December 2023 in this interim report does not constitute statutory accounts for that period under section 435 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2023 have been reported on by the Group's auditors and delivered to the Registrar of Companies.  The report of the auditors contained a "material uncertainty related to going concern" paragraph but the auditor's report did not contain any statement under section 498 of the Companies Act 2006.

 

3.             Earnings/(loss) per share

The calculation of earnings per ordinary share is based on earnings after tax and the weighted average number of ordinary shares in issue during the period. For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The group had two classes of dilutive potential ordinary shares, being those share options granted to employees and suppliers where the exercise price is less than the average market price of the group's ordinary shares during the year, and warrants granted to directors and one former adviser.

 

 


Unaudited

Six months to

30 June 2024

Unaudited

Six months to

30 June 2023

Audited

Year to 31 December 2023

(Loss)/earnings per ordinary shareholders ($000)

(792)

48

(472)

Weighted average number of ordinary shares

1,006,410,644

 

746,520,534

746,520,534

Basic (cents per share)

(0.08)

0.006

(0.06)

Diluted (cents per share)

(0.08)

0.005

(0.06)

 

4.             Share Capital

 

The issued share capital as at 30 June 2024 was 1,021,520,534 ordinary shares of 0.1p each (31 December 2023: 746,520,534; 30 June 2023: 746,520,534).

 

 

 

5.             Subsequent events

 

On 17 July 2024, following approval at general meeting, the company announced the subdivision of ordinary shares of £0.001 each into one Deferred Share of £0.0009 and one Ordinary Share of £0.0001 each.

 

On 29 July 2024, the company raised £450,000 (before expenses) through a placing and subscription of 1,499,999,998 new ordinary shares.



 

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