Update on Permian Acquisition

RNS Number : 8701Z

Nostra Terra Oil & Gas Company PLC

01 June 2016

 

1 June 2016

Nostra Terra Oil and Gas Company plc

("Nostra Terra" or the "Company")

Update on Permian Acquisition

Further to the announcements of 5 April and 3 May 2016 regarding the proposed acquisition of a 60% interest in producing assets in the Permian Basin of New Mexico from Alamo Resources II, LLC (the "Permian Assets"), Nostra Terra announces that it continues to seek debt financing via a secured bond to complete the acquisition. 

Nostra Terra continues to work closely with the seller to complete the proposed acquisition and the board of the Company ("Board") will continue its efforts to secure the necessary debt funding but it has not negotiated a further extension to the closing of the acquisition of the Permian Assets.  As such the Company no longer has an exclusive right to acquire the Permian Assets.

The Board has sought to minimize dilution to existing shareholders where possible and as such is seeking to close the acquisition of the Permian Assets through the issue of a bond instrument.  Nostra Terra remains in ongoing discussions with a number of interested parties for provision of a bond but despite the recent rally in the price of oil, financing conditions remain tight within the industry.  However, the Board believes that the purchase price for the Permian Assets (as set out in the announcement of 22 February 2016), cash flow projections for the asset and approximate $17 lifting costs present a financially attractive proposition.

Further updates will be made as and when appropriate.

Separately, Nostra Terra is nearing completion of a cost-cutting initiative, started in mid-2015 to manage its cost base so that it is in line with market conditions. Nostra Terra anticipates announcing results of the latest cost cutting initiative shortly.

Additionally, Nostra Terra continues to receive and review a number of promising proposals for the introduction of new projects to the company. The Board remains convinced that current market conditions present Nostra Terra with a significant opportunity to secure new assets, which have the potential to deliver material shareholder value over the medium term.

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

"While there has been a recent recovery from the bottom, the industry remains in a low oil price environment. We see this as an opportune time to grow the company but seek to do so with minimal dilution, such as being sought with the acquisition of the Permian Basin assets.  We look forward to updating on further progress on all activity within the company."

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

Nostra Terra Oil and Gas Company plc Matt Lofgran, CEO		[phone]
Strand Hanson Limited (Nominated & Financial Adviser and Joint Broker)			[phone]
Rory Murphy / Ritchie Balmer
Cornhill Capital Ltd (Joint Broker)			[phone]
Nick Bealer / Colin Rowbury
Walbrook PR (Financial PR)			[phone]
Gary Middleton / Nick Rome

 

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