Update on Hedges & Senior Lending Facility

RNS Number : 3214I

Nostra Terra Oil & Gas Company PLC

01 April 2020

 

1 April 2020

Nostra Terra Oil and Gas Company plc

("Nostra Terra" or the "Company")

Update on Hedges & Senior Lending Facility

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 announce the following update with regard to its hedging contracts and its Senior Lending Facility with Washington Federal Bank ("WAFD").

Highlights:

· Hedging contracts in place for 2020 to protect just over half of revenue at US$55.15 to US$57.18 per barrel (WTI)

· Redetermination of Senior Lending Facility completed on 30 January 2020

o Maturity extended for a further two years

o Company in compliance with all covenants

Hedging

On 26 September 2017, Nostra Terra announced that it had secured, via its wholly owned subsidiary, New Horizons Energy 1 LLC, a hedging facility with BP Energy Company. The Company uses hedging contracts in conjunction with its Senior Lending Facility for price protection for future production   and provide greater access to capital.

In November and December 2019, as part of its regular practice, management hedged a range of 1,500 to 1,800 barrels per month (just over half the net production of the Company) at prices ranging from $55.15 to $57.18 per barrel.

Summary of 2020 hedging contracts:

Pricing Date	Quantity (barrels)	Price (per barrel)
01/01/2020 - 31/01/2020	1,800 BBL / Monthly	$57.18
01/02/2020 - 29/02/2020	1,800 BBL / Monthly	$57.18
01/03/2020 - 31/03/2020	1,800 BBL / Monthly	$57.18
01/04/2020 - 30/04/2020	1,800 BBL / Monthly	$55.15
01/05/2020 - 31/05/2020	1,800 BBL / Monthly	$55.15
01/06/2020 - 30/06/2020	1,800 BBL / Monthly	$55.15
01/07/2020 - 31/07/2020	1,500 BBL / Monthly	$55.15
01/08/2020 - 31/08/2020	1,500 BBL / Monthly	$55.15
01/09/2020 - 30/09/2020	1,500 BBL / Monthly	$55.15
01/10/2020 - 31/10/2020	1,500 BBL / Monthly	$55.15
01/11/2020 - 30/11/2020	1,500 BBL / Monthly	$55.15
01/12/2020 - 31/12/2020	1,500 BBL / Monthly	$55.15

This hedging facility is currently providing an additional c. $65,000/month above spot market pricing.

Senior Lending Facility

In January 2018, the Company entered into a US$5.0 million Senior Lending Facility with WAFD. The borrowing base of the facility is derived from oil production rates at the Company ' s Pine Mills and Permian Basin assets. The most recent semi-annual redetermination was last completed on 30 January 2020. Accordingly, the current borrowing base and interest rate of the Senior Lending Facility are US$1.78 million and 4.5% per annum respectively. The maturity of the facility was extended by two years to 29 January 2022. Nostra Terra remains in compliance with all covenants.

Corporate Update

As previously announced, a root and branch review of the business is being undertaken by the Company's new board and we look forward to updating shareholders on the results of this in the near future.

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

"In light of the recent pricing volatility in the oil markets, we felt it prudent to update shareholders with steps we've taken to secure future revenue for the Company. The Coronavirus, and general uncertain geo-political climate, have caused huge downward pressure on oil prices. During this time of turbulence, we're pleased to be able to share with shareholders that just over half of our current revenue stream for 2020 is protected, guaranteeing a price of $55 to $57 per barrel..

We also look forward to updating shareholders and the market on progress the Board is making regarding other transformational plans for 2020 in due course"

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

For further information, contact:

Nostra Terra Oil and Gas Company plc Matt Lofgran, CEO	Email:	[phone]
Strand Hanson Limited (Nominated & Financial Adviser and Joint Broker) Rory Murphy / Ritchie Balmer / Jack Botros	Tel:	[phone]
Shard Capital Stockbrokers (Joint Broker) Damon Heath / Erik Woolgar Lionsgate Communications (Public Relations) Jonathan Charles	Tel: Tel:	[phone] [phone]

 

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