Nostra Terra Oil and Gas Company plc (LON:NTOG) shares edged higher on Monday after the company announced that it received approval for a new US$5mln senior lending facility with Washington Federal Bank.
It is expected that US$1.2mln will be immediately available once legal paperwork is complete.
The facility is supported by the group’s production operations, referred to as its ‘borrowing base’, and the company highlighted that it will be reassessed twice yearly.
It noted that recent reserves were reviewed conservatively, using an oil sales price of US$36.50 per barrel of less for the next 6 years.
Nostra intends to use the funds to accelerate growth, focussing on increasing free cash flow generation. Specifically, the cash is earmarked for a planned new programme of drilling.
Matt Lofgran, Nostra Terra chief executive, said: “We're excited to be working with such a strong energy lender as Washington Federal that endorses our plans to grow production, cash flow, and the size of the facility.
“With commercial flow testing due to commence shortly at our recently drilled twin well and the permitting process to begin for our next Permian development well, this is an extremely exciting time for Nostra Terra.
“The new funds of the facility will allow us in 2018 to quicken the pace of drilling our 24 drill ready locations, make further progress in Egypt and seek new acquisitions to add value to the company.”