Texas Acquisition

RNS Number : 8771Z

Nostra Terra Oil & Gas Company PLC

13 March 2013

 



Nostra Terra Oil and Gas Company plc

("Nostra Terra" or the "Company")

Texas Acquisition - Exploration Program Underway

Nostra Terra, the AIM oil and gas producer with projects in the USA, as part of its continuing development plan to build a portfolio of working interests ("WI") in US oil fields, has entered into an agreement with Brown and Borelli ("B & B"), an independent oil and gas company, to acquire a 5% WI in the High Plains Program, located in Texas. This agreement signals NTOG's entry into an exploration program where "proof of concept" could lead to multiple future prospects, each of which in turn, will likely include multiple drilling locations.

Highlights of the High Plains Prospect include:

•           AMI area covers 66 square miles (42,000 acres)

•           Low initial cost

•           Exploration component added to NTOG portfolio

•           Highly experienced and respected operator-partner

•           Extensive regional subsurface and 3D seismic updating underway

•           Several stacked-formations in addition to the primary objective

•           Moderate depth oil and liquids-rich targets, and

•           Successful nearby wells have reached payout in less than one year.  

The High Plains Program Area of Mutual Interest ("AMI") covers a contiguous area of 66 square miles (42,000 acres). High Plains is found in an area where subsurface mapping, 3D seismic, vertical and horizontal drilling and completion technologies have already been applied but only with varying degrees of success. We will seek to increase that success rate through the application a new "proof of concept" with B&B.

The first step is to re-enter a previously drilled well within the next 60 days which, analysis indicates, could be productive. If the re-entry is successful, this will initiate exploration over a larger area. The total initial exposure to NTOG for the re-entry, completion and subsequent reprocessing of 35,000 acres of 3D seismic data to is estimated to be US$75,000. The partnership will then apply the "proof of concept" in order to create multiple prospects within the AMI, each of which could comprise up to 2,500 acres.

NTOG will earn a 5% WI in the first well, assignments of its proportionate share in approximately 450 net mineral acres surrounding the initial re-entry and, more importantly, 5% WI in the larger program. If the first well is successful, B&B will also drill a second well on the assigned acreage within 60 days of completion of the initial well.

The expected program cost for acreage acquisition, brokerage fees and regulatory compliance will approach US$500 per acre or US$1,250,000 for each one of the potential prospects. Each prospect is expected to offer the potential to drill multiple wells to produce oil or liquids-rich gas.

Based in Oklahoma City, Oklahoma, Mr. Pete Brown, of Brown & Borrelli, has been in the oil and gas business for more than 40 years. He began his career with Cities Service Oil Company, and is highly respected in the oil community of the Oklahoma. Among his numerous industry honours he holds are: past President of the Oklahoma Independent Producers Association; OIPA "1995 Member of the Year"; 1991 Chairman of the Oklahoma Energy Resources Board; and Oklahoma City Association of Petroleum Landman's "1992 Outstanding Landman of the Year". He joined with Gerald Borelli to form Brown and Borelli in 1972.

Matt Lofgran, Chief Executive Officer of Nostra Terra, commented:

"Alden has done a great job identifying yet another opportunity with similar potential to Chisholm Trail. With our portfolio of producing wells now delivering a reliable revenue stream and pushing us well past break-even on operations, we are more comfortably positioned to enter into higher-risk exploration opportunities to strengthen our portfolio. The High Plains investment offers controlled risk against a potential large upside for our shareholders. 

Additionally, I know there is much excitement from shareholders in relation to our recent success on Chisholm Trail, and the progress we have made in developing our own prospects.  Work is continuing on those fronts, which we anticipate will add to our production levels this year.  We look forward to providing further updates on these, as well as other opportunities in our pipeline."

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

Nostra Terra Oil and Gas Company plc

Matt Lofgran, CEO

[e-mail]                                                       Telephone: [phone]

Shore Capital & Corporate Limited (Nominated Adviser) 

Bidhi Bhoma/ Toby Gibbs                                                 Telephone: [phone]

Alexander David Securities Ltd (Joint Broker)

David Scott / Bill Sharp                                                     Telephone: [phone]

XCAP Securities plc (Joint Broker)

Jon Belliss / Halimah Hussain                                          Telephone: [phone]

Lothbury Financial Services Limited

Gary Middleton / Michael Padley                                       Telephone: [phone]

 

END

 

 

DRLGXGDXGGBBGXX