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Nostra Terra acquires producing assets onshore USA

The acquisition is to be funded by debt and it promises to position Nostra Terra for any potential recovery in oil prices.
Nostra Terra acquires producing assets onshore USA
Currently, the operations produce from just a fifth of the reserve base.

Nostra Terra (LON:NTOG) has unveiled a new acquisition of oil and gas operations onshore USA, in the Permian basin.

It has agreed to pay $3mln to acquire a 60% stake in the producing assets, which comprise 55 active vertical oil wells and have been flowing around 122 barrels of oil per day.

The acquisition is to be funded by debt and it promises to position Nostra Terra for any potential recovery in oil prices. In the meantime, the company expects cash flow from the acquired operations will service the acquisition debt.

“The industry is facing a difficult time with low oil prices which most in the industry believe to be temporary,” said Matt Lofgran, Nostra Terra chief executive. “This creates an opportunity-rich environment where assets such as these can be acquired at much better prices than previously.”

Lofgran added: "We're excited about the acquisition of these assets in the Permian Basin, one of the most prolific basins in the world. The leases will add significantly to our production, revenues, and reserves.”

The assets have some 2.6mln barrels of oil and 553mln cubic feet of total proved reserves. Nostra share of proved reserves amounts to 1.6mln barrels oil equivalent.

Less than 20% of proven reserves are ‘currently producing’, the company highlighted, and it said that there are multiple low cost and low risk opportunities to optimise the assets.

It also said that there are six ‘behind the pipe’ programmes - involving recompletions, e-stimulations, workovers, or return-to-production – as well as enhanced recovery options via water flooding.

Furthermore, there are some 54 locations for drilling vertical wells to access proven undeveloped reserves.

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Nostra Terra Oil and Gas Company plc Timeline

Newswire
February 20 2017

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