Interim Results for the period ended 30 June 2022

RNS Number : 2455B
Nostra Terra Oil & Gas Company PLC
30 September 2022
 

30 September 2022

 

Nostra Terra Oil and Gas Company PLC

("Nostra Terra", "NTOG" or the "Company")

 

 

Interim Results for the six months ended 30 June 2022

 

 

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 2022. A copy of the Interim Results is available on the Company's website, www.ntog.co.uk  

 

Financial Highlights

 

· 108% increase in Revenue for the period to $2,003,000 (30 June 2021: $963,000).

· 381% increase in Gross profit from operations for the period to $1,203,000 (30 June 2021: $250,000 profit).

· 34% increase in total production for the period to 20,383 barrels oil (30 June 2021: 15,211 barrels oil)

Average production during first half at 112 bopd net to Nostra Terra (2021: 84 bopd)

50% reduction in Finance costs for the period

· Sr. Lending Facility borrowing base increased by 43% from $2,350,000 to $3,350,000

· Fouke #2 well completed and put into production (mid-May)

Production surpassed management expectations

· Grant East lease acquired and first well drilled

 

 

Post-period events:

 

· Fouke #2 well reached payback in under 3 months

 

Chairman's report

 

The first half of 2022 saw Nostra Terra continue to make good progress in implementing its strategy of realising value from its existing Texas based assets - this has translated into a stronger financial performance.

 

The ongoing war in Ukraine has kept global energy prices relatively high. This effect is more marked for some fuels than others, notably European gas which is heavily reliant on Russian imports. Though WTI prices have fallen somewhat over the last months, they remain high relative to long term averages. This is anticipated to persist for some time and hence the Company believes it is prudent to continue with its current strategy.

 

The cashflow produced by the combination of high oil prices and our increased production volumes has allowed Nostra Terra to retire a substantial proportion of its higher-cost debt over the reporting period. The Board had previously identified this as an area where expenditures could be used to good effect on our cost base, helping reduce our finance costs by approximately 50% versus H1 2021 levels.

 

The Company's cashflow was also used to drill both the Fouke #2 and Grant East #1 wells in H1 2022. Fouke #2 continued the history of good oil flow rates from Pine Mills wells with a stable rate of 140 bbls/day. The Texas Railroad Commission, as local regulator, has been petitioned to have the production limit increased to allow this well and Fouke #1 to produce at higher daily rates. Grant East #1 proved less forthcoming, this was due to the completion rather than a fundamental reservoir issue, however, the lessons learnt from it and the data that it produced provide very useful insights into planning future wells in the area.

 

In a very tight rig market, workover jobs on five existing Pine Mills have been planned. Two of these wells are now complete and scheduled to be put online shortly, leaving three wells to be completed in the next reporting period. We anticipate that these workovers will lead to a further increase production from this prolific area.

 

Given the success in the field, resulting in a significant increase in production and combined with stronger commodity prices, we anticipate that our proven reserves will significantly increase. We are in the process of having those estimates prepared by a third-party engineering firm and will publish the results in due course.

 

We continue to assess new upstream opportunities, both in the US and elsewhere.

 

We were pleased to welcome Paul Welch as a non-executive director in February this year. Paul brings with him excellent and highly relevant knowledge and experience.

 

I would like to thank our shareholders for their continued support over the past half year and look forward to updating you on further developments in the future.

 

 

Dr Stephen Staley

Chairman

29 September 2022

 

 

Chief Executive Officer's report

 

We had a great first half of the year, delivering on our plans. Our focus has been on increasing cashflow, which we did through a combination of increasing revenues, while lowering our production and finance costs.

 

We had a record period with over $2 million in revenue which is the highest in the Company's history. More importantly our gross profit was $1.2 million (over $1.4 million after non-cash items), representing a 381% increase, also a record for the Company. Average oil sales prices during the period were $98.28 per barrel.

 

The Fouke #2 well was drilled and put into production mid-May (only contributing to circa 1.5 months of the 6 months of figures). It significantly exceeded expectations, surpassing even the performance of the Fouke #1 well. Pine Mills has been a great asset for the Company, and we are actively reviewing additional opportunities within our existing leases with similar potential to the Fouke wells.

 

The Grant East lease was acquired during the period, providing over a dozen drilling locations. The Grant East #1 well was drilled but, as announced in June, flowed an excessive amount of water which impeded the flow of oil in commercial quantities. At a cost of $813,000 this contributed significantly to the loss reported for the period. The well results are being analysed to improve the completion technique for future wells. The Grant East lease, located in the Permian Basin, is a prolific area and adjacent to other wells that Nostra Terra has successfully drilled and completed previously.

 

We had a record period even while some wells were off-line due to the expansion work on the production facilities at Pine Mills. The primary objective being to increase the capacity of the water injection and disposal system through workovers and recompletions of the injection wells. This work is anticipated to be complete this month after which the off-line wells will be returned to production and the pump rates at currently producing wells will be increased resulting in a further increase in production from this asset.

 

Finally, and most importantly, this record period has been achieved using only existing resources. As cashflow is now increasing at the fastest rate in the Company's history, the funds generated are being reinvested into growth opportunities while we retire our higher-priced debt.  We also anticipate the strong cashflow to continue, resulting in a profit for the full year.

 

I wish to extend a sincere thank you to our shareholders for your continued support and I look forward to updating you as we continue to grow our Company.

 

 

Matt Lofgran

Chief Executive Officer

29 September 2022

 

 

 

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

 

Nostra Terra Oil and Gas Company plc

Matt Lofgran, CEO

 


+1 480 993 8933

Beaumont Cornish Limited

(Nominated Adviser)


+44 (0) 20 7628 3396

James Biddle / Roland Cornish






Novum Securities Limited (Broker)


+44 (0) 207 399 9425

 

Jon Belliss






Lionsgate Communications (Public Relations)


+44 (0) 7791 892509

Jonathan Charles



 

 

 


 


Nostra Terra Oil and Gas Company plc

 

Consolidated Income Statement

for the six months ended 30 June 2022

 


 

 

 

Note

Unaudited

Six months to

30 June

2022

Unaudited

Six months to

30 June

2021

Audited

Year to

31 December 2021

 


$'000

$'000

$'000

 

Revenue


 

2,003

 

963

 

2,282

 

Cost of sales





Production Costs


(581)

(687)

(1,708)

Depletion, depreciation, amortisation


(219)

(26)

(400)

Total cost of sales


(800)

(713)

(2,108)

GROSS PROFIT


1,203

250

174

Exploration costs written off


(813)

-

-

Share based payment


(80)

(107)

(68)

Administrative expenses


(478)

(316)

(910)

Foreign exchange (loss)/gain


(25)

2

(130)

 

OPERATING LOSS


 

(193)

 

(171)

 

(934)



 

 

 

Finance costs


(49)

(98)

(175)

Other income


39

-

21

LOSS BEFORE TAX


(203)

(269)

(1,088)

Income Tax


-

-

LOSS FOR THE PERIOD

 

 


(203)

  (269) 

(1,088)

Attributed to:


 

 

 

Owners of the company


(203)

(269)

(1,088)

Earnings per share expressed in pence per share:

Continued Operations

Basic & Diluted (cents per share)   

 

 

 

3

 

 

 

 

 

(0.03)

 

 

 

 

 (0.04) 

 

 

 

 

(0.16)






 

 

 





 

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 2022

 

 

 

Unaudited

Six months to

30 June

2022

Unaudited

Six months to

30 June

2021

Audited

Year to

31 December 2021

 

 

$'000

$'000

$'000

 

 

 



LOSS FOR THE PERIOD

Other comprehensive income:

 

(203)

(269)

(1,088)

Currency translation differences

6

-

-

Total comprehensive income for the period

 

(203)

(269)

(1,088)

Total comprehensive income attributable to:





Owners of the company

 

 

(203)

(269)

(1,088)

 



 

Nostra Terra Oil and Gas Company plc

 

Consolidated Statement of Financial Position as at 30 June 2022

 

 

 

 

 

 

Unaudited

As at 30 June

2022

Unaudited

As at 30 June

2021

Audited

As at 31 December 2021

 

 

 

Note

$'000

$'000

$'000

ASSETS


 

 

 

Non-current assets





Intangible assets


2,328

2,036

2,014

Property, plant and equipment

- oil and gas assets


1,119

944

918


 

3,447

2,980

2,932

Current assets





Trade and other receivables


650

435

348

Deposits and prepayments


16

31

16

Cash and cash equivalents


114

162

45

 


 780 

628

409

LIABILITIES





Current liabilities





Trade and other payables


1,153

622

948

Borrowings


273

699

518

Lease liabilities


-

16

-


 

1,426

1,337

1,466

NET CURRENT LIABILITIES


(646)

(709)

(1,057)

 

Non-current liabilities





Decommissioning liabilities


321

266

302

Borrowings


3,295

2,072

2,459

Lease Liabilities


-

-

-



3,616

2,338

2,761

NET LIABILITIES


(815)

(67)

(886)

EQUITY AND RESERVES





Share capital

4

8,142

8,076

8,087

Share premium


22,115

22,044

21,976

Translation reserve


(676)

(676)

(676)

Share option reserve


386

249

306

Retained losses


(30,782)

(29,760)

(30,579)



(815)

(67)

(886)


Nostra Terra Oil and Gas Company plc

 

 Consolidated cash flow statement

For the six months ended 30 June 2022


 

 

 

 

 

Notes

Unaudited

Six months to 30 June 2022

Unaudited

Six months to

30 June 2021

Audited

Year to

31 December 2021



$'000

$'000

$'000

Cash flows from operating activities

Operating loss for the period


 

(203)

 

(269)

 

(1,088)

Adjustments for:





Depreciation of property, plant and equipment

 

 

113

8

208

Amortisation of intangible assets


173

Exploration costs written off



Depletion


38

Other Income


(21)

Foreign Exchange


25

-

-

Share based payment


80

107

68

Operating cash flows before movements in working capital


895

(154)

(622)

(Increase) /decrease in receivables


66

(Decrease)/increase in payables


285

(Increase)/decrease in deposits and prepayments


26

Interest paid


175

Cash generated/ (consumed) by operations


850

(90)

(70)

 


 

 

 

Cash flows from investing activities


 

 

 

Purchase of intangible assets


(1,214)

(9)

(160)

Purchase of plant and equipment


(345)

(172)

(346)

Disposals


30

-

-

Increase in decommissioning liabilities


19

-

36

Net cash from investing activities


(1,510)

(181)

(470)

Cash flows from financing activities





Proceeds from issued share capital


194

756

794

Cost of shares issued


-

(62)

(61)

Net borrowing


591

(235)

(29)

Finance costs


(49)

(98)

(175)

Lease payments


(7)

-

(16)

Net cash from financing activities


729

361

513

Increase/(decrease) in cash and cash equivalents


69

90

(27)

Cash and cash equivalents at the beginning of the period


72

Cash and cash equivalents at the end of the period


114

162

45

 


 

 

 


 


Nostra Terra Oil and Gas Company plc

 

Consolidated Statement of Changes in Equity

For the six months ended 30 June 2022

 


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 2022

1,538

6,549

21,976

306

(676)

(30,579)

(886)

Loss for the period

-

-

-

-

-

(203)

(203)

Total comprehensive loss for the year

-

-

-

-

-

(203)

(203)

Shares issued

55

-

139

-

-

-

194

Share based payments

-

-

-

80

-

-

80

As at 30 June 2022

1,593

6,549

22,115

386

(676)

(30,782)

(815)

 


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 2021

1,369

6,549

21,508

142

(676)

(29,491)

(599)

Loss for the period

-

-

-

-

-

(269)

(269)

Total comprehensive loss for the year

-

-

-

-

-

(269)

(269)

Shares issued, net of expenses

158

-

536

-

-

-

694

Share based payments




107



107

As at 30 June 2021

1,527

6,549

22,044

249

(676)

(29,760)

(67)

 


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 2021

1,369

6,549

21,508

142

(676)

(29,491)

(599)

Loss for the year

-

-

-

-

-

(1,088)

(1,088)

Total comprehensive loss for the year

-

-

-

-

-

(1,088)

(1,088)

Shares issued, net of expenses

169

-

468

-

-

-

637

Share based payments

-

-

-

164

-

-

164

As at 31 December 2021

1,538

6,549

21,976

306

(676)

(30,579)

(886)

 

 

Nostra Terra Oil and Gas Company plc

 

Notes to the interim report

For the six months ended 30 June 2022

 

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

These financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations issued by the International Accounting Standards Board (IASB) as adopted by the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention. This interim financial information for the six months ended 30 June 2022 was approved by the Board on 28 September 2022.

 

The unaudited results for the six months ended 30 June 2022 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 2021 are extracted from the statutory financial statements which have been filed with the Registrar of Companies and which contain an unqualified audit report, which did however draw attention to a material uncertainty relating to going concern 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 Salisbury House, London Wall, London, United Kingdom, EC2M 5PS. 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

 

3.  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 2022

Unaudited

Six months to

30 June 2021

Audited

Year to 31 December 2021

Loss per ordinary shareholders ($000)

(203)

(269)

(1,088)

Weighted average number of ordinary shares

718,736,004

686,349,263

692,287,657

Basic and diluted (cents per share)

(0.04)

(0.04)

(0.16)

 

4.  Share Capital

 

The issued share capital as at 30 June 2022 was 746,520,534 ordinary shares of 0.1p each (31 December 2021: 703,520,534; 30 June 2021: 695,520,634).

 

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