Nostra Terra steps up the pace of activity with Bale Creek deal

Nostra Terra Oil & Gas (LON:NTOG) weighed in with its second acquisition of the month as it steps up the pace of growth by acquiring larger working interests in established oil and gas plays.

This morning the company revealed it is taking a 30 per cent stake in Bale Creek, an area prospective for oil and liquid-rich gas, which covers 3,500 acres of northern Oklahoma.

The agreement with Pathfinder Developments will see Nostra Terra pay an initial US$201,810 towards the pre-drilling costs of the project.

The company believes there is the potential for eight “multi pay” wells at Bale Creek targeting the Ordovician up through Permian-aged rocks.

Chief executive Matt Lofgran said: “Nostra Terra is delighted to have entered into this agreement with Pathfinder, which marks a strong step into Oklahoma.  

“This agreement is in line with our stated strategy to step up the pace of our growth by acquiring a diverse pipeline of assets in established oil and gas plays - including larger interests, where we can generate added value and strong, sustainable cash flow through disciplined cost control and the use of advanced technology.  

“Pathfinder has aligned interests and we look forward to furthering opportunities with them."

The pair will acquire and interpret two-dimensional and 3-D seismic data before drilling a pilot hole that will be logged to determine the most promising and productive zone.

The next step will be to drill three horizontal wells into that particular zone, along with all production and transmission facilities to support the project.

Currently the drilling budget is being finalised and the first well is being planned for beginning of fourth quarter.

Phase two of the project will include up to four further horizontal wells plus additional production facilities. The decision on this second phase of development will be made in the middle of next year.

Nostra has certainly become more active in recent weeks. On June 20 Nostra said it was acquiring a 16.25 percent working interest in the Verde prospect in south-eastern Colorado. 

It struck a deal with operator Plainsmen Partners, which is sinking an initial test well to 5,300 feet to target Mississippian formation at a total cost of US$1.1 million. 

The company says 3D seismic has been shot and interpreted that supports the subsurface mapping of a structural high being 25 to 50-feet up dip to historical production from the Lower Morrow Keyes. 

Nostra’s strategy is to use horizontal drilling techniques in existing oil plays in the US, which have been used offshore and in Alaska for decades.

More prominently they have delivered phenomenal results when used to unlock the potential of the gas plays in the Barnett and Haynesville formations in Texas, the Marcellus shale of Pennsylvania and the giant Bakken play that straddles the US-Canada border.

The ability to place the well bore precisely within a given formation has allowed operators to stimulate, or frac and open perforations almost exactly where they choose.

The result has been the world-wide phenomenon, termed unconventional gas shales. These enhanced capabilities have transformed the natural gas industry and operators are racing across every continent around the world to apply them.

Today, a parallel push is to apply horizontal drilling and fraccing techniques to conventional formations to bring uneconomic or declining fields back to life.

Chief operating officer Alden McCall said today:  “It is a key to our growth plan to utilise leading edge technology (3D seismic, sophisticated log suites, 3D-steered horizontal well bores and modern multi-stage completions) to produce oil from compartmentalised reservoirs that have been grossly under-produced. 

“Pathfinder Exploration has created an impressive screening and evaluation process to locate numerous prospective reservoirs in which to apply these technologies."