Operations Update
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
OPERATIONS UPDATE
28 May 2010
Further to the operations update provided on 31 March 2010, Nostra Terra Oil and
Gas Company plc (AIM: NTOG) has made considerable progress in reworking the
wells on its Boxberger, Hoffman and Bloom properties in Kansas, and has sold its
first oil from all three properties. As of 25 May, the combined production rate
from 7 reworked wells was 73 barrels of oil per day (bopd) gross, which is
gradually increasing as the performance of each well continues to be optimised.
Having accelerated activities that were previously delayed by the severe winter
weather, the Company is now cash flow positive operationally on the basis of
current production and pay out levels, and is confident that it will achieve its
previously stated objective of bringing 15 wells online by the end of 2010.
A status summary on each of the three properties currently being redeveloped by
Nostra Terra, in partnership with Hewitt Petroleum, Inc (HPI) as operator,
follows:
Boxberger
A new salt water disposal (SWD) well has been drilled and permitted and is now
operational. One production well has been reworked and is currently producing at
a limited rate of approximately 13 bopd. Although this recovery rate continues
to increase slowly, it is currently below expectations. To bolster immediate
production at Boxberger, a second well was recently brought on line on a small
pump jack and is currently producing an additional 2 bopd. Later this year, a
third production well will be brought on line with a large electrical
submersible pump (ESP). It is hoped that this will reduce the hydrostatic head
within the reservoir, thereby increasing the oil cut in the fluids extracted
from each of the Boxberger wells and also making it possible to access the
additional oil-bearing zones discovered in October 2009 that are not currently
being produced.
Hoffman
Two of the existing five production wells on the Hoffman property have been
reworked, including the radial jet enhancement treatment described in the
Company's previous operations update. Despite this treatment, oil flows from the
two wells have so far been very modest (approximately 5 bopd combined). Nostra
Terra and HPI continue to explore options to improve the performance of these
wells and recover the considerable oil reserves they believe remain on the
Hoffman property.
Bloom
The first Bloom well was brought back on line, without significant reworking, in
mid-April, followed by two more in mid-May. A fourth well is being reworked and
is expected to be brought into production within the next month. The first three
Bloom wells are currently producing a total of 53 bopd, which is expected to
rise as the hydrostatic head within each well gradually reduces as fluids are
drawn from the reservoir.
Matt Lofgran, CEO of Nostra Terra, commented: "Operations are now progressing
well, and while initial results from some of the re-entered wells have been
disappointing, others are performing as expected. We remain confident that flow
rates will steadily improve as we learn more about these mature reservoirs and
how best to stimulate them. For the first time in its history, Nostra Terra is
now cash flow positive, and we expect revenues to increase significantly going
forward."
Utah exploration
In addition to its redevelopment activities in Kansas, Nostra Terra has
participated in an exploration venture in Northern sector of the Paxton Thrust
of the Central Utah Overthrust. Drilling of the Liberty #1 exploratory well has
now been completed, and the results are being evaluated by the Company and its
partners, HPI and Freedom Oil & Gas. Further information about this venture will
be made available in due course.
Final Results Timetable
The Company expects to announce its results for the year ending 31 December 2009
in the week commencing 31 May 2010.
The technical information in this announcement has been prepared and approved
for release by Jeremiah Burton, Hewitt Petroleum, Inc. Geologist. He is a
qualified person as defined in the Note for Mining and Oil & Gas Companies, June
2009, of the London Stock Exchange.
For further information, please visit www.ntog.co.uk or contact:
Nostra Terra Oil and Gas Company plc Telephone: +1 480 993 8933
Matt Lofgran, CEO
mlofgran@ntog.co.uk
Religare Capital Markets Telephone: +44(0)20 7444 0800
Peter Trevelyan-Clark/Ben Jeynes
Alexander David Securities Ltd Telephone: +44 (0)20 7448 9820
David Scott/Bill Sharp/Nick Bealer
Announcements made by the Company are available automatically by email to those
who register at www.ntog.co.uk.
Notes to Editors
Nostra Terra Oil and Gas Company plc (AIM: NTOG) is an emerging oil and gas
exploration and production company with assets in established producing regions
within the US mid-continent. The majority of the Company's current US interests
are located in the Central Kansas Uplift (CKU).
Boxberger
Nostra Terra holds a 50 per cent working interest in 11 wells, including two
salt water disposal (SWD) wells, on the Boxberger property, located in Russell
County, Kansas within the Gorham field.
Hoffman
Nostra Terra holds a 25 per cent working interest in five production wells and
one SWD well on the Hoffman property, located within the Trapp field in Barton
County and Russell County, Kansas, and has a 50 per cent interest in an
additional undeveloped 160 acres nearby, also within the Trapp field.
Bloom
Nostra Terra holds a 50 per cent working interest in nine production wells and
two SWD wells on the Bloom property, located within the Chase-Silica field in
Rice County, Kansas.
Koelsch
Nostra Terra also has a 50 per cent working interest in two production wells and
one SWD well on the Koelsch property, located in Stafford County, Kansas.
Utah Overthrust
Nostra Terra has a 7 per cent working interest (WI) before payout and 5 per cent
WI after payout in the Liberty #1 exploratory well in Juab County, Utah.
Ukraine
Nostra Terra retains the right to a 25 per cent profit share in the onshore
Oktyabrskoe oil field in the Ukraine.