Nostra Terra Oil and Gas Company PLC (AIM:NTOG, OTC:NTOGF) CEO Paul Welch talked with Proactive about the company’s strategy to scale up production and drive growth from its existing base of operations in East Texas and West Texas.
Welch explained that Nostra Terra is currently focused on the Pine Mills Field, a long-life, shallow onshore field with low operating costs and consistent profitability. “It's been an exciting field for the last 75 years and we expect it to be an exciting field for the program for the next 20 to 30 as well,” he said.
Since taking over as CEO around nine months ago, Welch has led the company to profitability by cutting costs and increasing production. He highlighted two successful well workover programs that have effectively doubled production.
A key highlight is the Fouke area, where new drilling, including the upcoming Fouke-3 well, could deliver significant volumes. Welch pointed out that these wells can initially produce around 120 barrels per day—compared to the average of 6 to 10 barrels from the Pine Mills wells. If enhanced recovery schemes are implemented, the output could potentially double.
Welch reaffirmed the company’s ambitious growth target: “This is a company that's going to be making 5,000 barrels a day in the next 3 to 5 years.”
The focus remains on building from a solid, profitable base, with production costs in the Fouke area as low as $3 to $4 per barrel, ensuring resilience across various oil price environments.
Watch the full interview to hear more on the outlook for 2025, drilling plans, and the strategic path forward.
Proactive: Paul, for those new to this story, what should they know about NTOG?
Paul Welch: So NTOG is an onshore U.S. producer. We have assets in both East Texas and West Texas. Our primary asset is a field called Pine Mills in the East Texas basin. It's an onshore, shallow field with long-life production, and it's very profitable at current prices. So we have a very low operating cost base.
It's been an exciting field for the last 75 years, and we expect it to be an exciting field for the next 20 to 30 years as well. There’s a lot of potential in the field—multiple zones, and depths ranging between 4,000ft and 6,000ft. These are easily accessible by the drill bit and also by the existing well bores we have in the field. We've been actively developing it over the last year.
Proactive: It has been a busy period since you took over around nine months ago. What have been the highlights?
Paul Welch: Over the last nine months, I think the real highlight is we made the company profitable. After about five months in, we had cut costs and started to raise production. We undertook two very successful workover programs, and we essentially doubled production from where it was.
We also did a lot of technical work and identified a third location in a part of the field called the Fouke area. We proposed this to our partners, and they agreed to drill this well in 2025.
In addition, we believe we've found a valuable fourth location. That area has expanded after interpreting the 3D seismic, and we’re going to test it again in 2025.
For context, Pine Mills is a very mature field. The average well produces between 6 and 10 barrels a day—one probably makes 20. These Fouke area wells come in at 120 barrels a day. So this is a very exciting and important part of the asset for us.
Proactive: You announced some new operational initiatives alongside corporate highlights last week. Can you give us a recap?
Paul Welch: Yes, it was primarily focused on the Fouke area—the approval of the new well by our partners. If the Fouke-3 well works on primary production, it opens up a path for a secondary recovery scheme.
When we drill these wells, they initially come in at around 120 barrels a day. After that declines, we can go in and start what we call an enhanced recovery scheme—injecting water into the ground to maintain pressure. That hasn't been done in the Fouke area yet.
If we install waterflood infrastructure, we believe we can double the volume produced out of that block. These wells have been producing somewhere between 250,000 and 350,000 barrels on primary. So, with waterflooding, we could potentially double that. That’s why Fouke-3 is important—it helps us prove the volume is there and supports secondary recovery planning.
Proactive: So, Paul, why should investors be excited about NTOG?
Paul Welch: I think they should be excited because we’ve turned the company around. We've shown we have a successful and profitable base business—a business that can grow.
We've demonstrated that the Pine Mills field has significant upside. From a profitability standpoint, the operating cost in the Fouke area is between $3 and $4 a barrel. In the Pine Mills field proper, it's around $25 to $27 a barrel. So, at current oil prices, we're profitable—and we intend to remain that way.
We've established a profitable base, and from that base, we now have the ability to grow and look for other opportunities. As I’ve said before, this is a company that’s going to be making 5,000 barrels a day in the next three to five years. That’s the trajectory we’re on. We've established the base, now it's time to grow—and it’s a great time to get involved.
Proactive: Paul, I hope you'll continue to keep us posted on your progress. Thank you very much for the update today.