Operations Update - Pine Mills

RNS Number : 9398Q

Nostra Terra Oil & Gas Company PLC

03 March 2021

 

7.00am 3 March 2021

Nostra Terra Oil and Gas Company Plc

("Nostra Terra" or "the Company")

Operations Update - Pine Mills

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 operations update for its Pine Mills asset in East Texas.

Highlights

· Cypress Farmout acreage doubled in size

· Potential additional locations and reserves identified

· 2^nd Cypress well planned in 2021

· Remaining acreage owned 100% by NTOG being assessed for further potential farmouts

Background

Nostra Terra currently owns and operates a 100% working interest ("WI") in the Pine Mills asset which covers 2,400 acres. On 22 April 2020 Nostra Terra announced that it had signed a farmout agreement ("farmout") with Cypress Minerals LLC ("Cypress") on an undrilled 80 acre area (the "Farmout Area") of the 2,400 acres, where Cypress would drill and complete one well (the "Farmout Well") at its sole expense to earn a 75% WI. Nostra Terra would retain a 25% WI in the Farmout Area where the drilling and completion in the first well cost would be paid for by Cypress. Additionally Nostra Terra would retain the right to participate for another 10% WI (7.5% WI after carry) at cost. Pine Mills was selected by Cypress as its top choice to farm-in to, based on 3D seismic data and because of the historically high production rates of nearby wells.

The Farmout Well was successfully drilled at the end of 2020 and put into production in January of this year. The well continues to produce at the levels advised by the Company on 25 January. It is anticipated that the Farmout Well will be added as collateral to Nostra Terra's Senior Lending Facility which will provide non-dilutive funds to fund further drilling activity.

 In addition, Nostra Terra and Cypress are planning a second well within the original Farmout Area, due to spud in the second half of this year.

Further, within the original 2,400 acres, where Nostra Terra still owns a 100% WI, there are additional undrilled areas that are currently being assessed for additional farmouts.

Ongoing analysis of the technical data indicates that the Farmout Area, and a significant area beyond, is virgin reservoir. Hence Cypress has now taken additional leases outside the Farmout Area (and outside Nostra Terra's 100% owned acreage). The Farmout Area has now doubled in size, in which Nostra Terra has a 32.5% WI in the enlarged acreage position. Potential additional locations and reserves are also being assessed in these areas.

Matt Lofgran , Nostra Terra's Chief Executive Officer, said:

"With the recent success at Pine Mills we're excited to have doubled the acreage position in an area of virgin reservoir with the next well now being planned. Pine Mills has been a strong asset with much more potential for further development.

Nostra Terra continues to execute on our plans to grow production and cashflow, primarily from existing assets, while still seeking additional opportunities that could be transformational for the Company, both in the USA and in other developed oil and gas provinces."

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014

Competent Person Disclosure

John Stafford, a Director at Nostra Terra with over 35 years' relevant experience in the oil industry, has reviewed this announcement for the purposes of the current Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in June 2009. Mr. Stafford is a Fellow of the Geological Society and a member of the Petroleum Exploration Society of Great Britain.

For further information, contact:

Nostra Terra Oil and Gas Company plc Matt Lofgran, CEO	Email:	[phone]
Beaumont Cornish Limited (Nominated Adviser) James Biddle/ Roland Cornish	Tel:	[phone]
Novum Securities Limited (Broker) Jon Belliss Lionsgate Communications (Public Relations) Jonathan Charles	Tel: Tel:	[phone] [phone]

 

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