Nostra Terra Oil and Gas Company PLC (AIM:NTOG, OTC:NTOGF) has completed Phase 1 of its workover program at the Pine Mills field in Texas, which delivered a 60% increase in production.
The company, in a statement, said that oil production now averages around 120 barrels of oil per day (BOPD) net, thanks to the return of five previously shut-in wells to production.
It noted that it has also restarted its enhanced oil recovery project (waterflood) in the northern area of Pine Mills, which had been inactive for over two years.
Initial results from this are expected in three months, with full benefits anticipated in six months, potentially adding 15-30 bopd.
Further workover opportunities have been identified in Pine Mills as part of a planned second phase, Nostra Terra added.
Meanwhile, in the Fouke area, the company has identified a new development location with an estimated 200,000 barrels in recoverable oil reserves.
Operating costs at Pine Mills have been reduced by 25%, and combined with increased production, the field’s netbacks and profitability have significantly improved, Nostra Terra said.
The firm expects it will now be cash flow positive both at the operating and corporate levels under current oil prices.
Paul Welch, who took over as chief executive in May, told investors he is excited about the asset's future potential and said he believes it will significantly exceed previous estimates.
"We are delivering on our plans to reduce costs, increase production, and grow our cash flow by focusing our efforts on our Pine Mills asset,” Welch said in Monday’s statement.
“It's been more than five years since an extensive work-over program was conducted in the field, and the results on the first five wells have exceeded our original expectations.
“We have also restarted the waterflood, which will take three months to show results, and we believe this has the potential to deliver an even greater boost to field performance.”
He added: “Pine Mills has been an exceptional resource for the Company and can potentially deliver more value in the future.
“The changes we've implemented have delivered significant savings and allowed us to improve our margins by more than 50%, with a corresponding improvement in the netbacks.
“This results in NTOG being cash flow positive at the operating level and now at the corporate level.”