Nostra Terra Oil and Gas (LON:NTOG) has decided to end its working relationship with privately-held Hewitt Petroleum (HPI).
They had been working together to redevelop oil and gas assets in the Central Kansas Uplift (CKU), USA.
However the project has not been as successful as initially hoped.
Nostra Terra carried out a comprehensive review of the project after production levels failed to meet expectations – with just 1,239 barrels of oil produced over a three month period.
The former partners have subsequently agreed a settlement. The AIM-listed junior will now retain full ownership of the two producing assets - Boxberger and Bloom – while Hewitt will take ownership of the undeveloped Hoffman acreage and the other Kansas assets.
Hewitt will pay Nostra Terra US$1.2 million in cash to acquire its interests in the properties.
Previously, Nostra Terra had a 75 percent stake in the producing assets and it had a 25 percent interest in the undeveloped assets.
"This has been a very thorough and painstaking review, and I believe the agreement we have reached with HPI is the best possible outcome for our shareholders,” Nostra Terra chief executive Matt Lofgran said.
“Assuming operatorship of the Boxberger and Bloom properties will provide us with greater control over the pace, cost and technical aspects of field activities.
“We continue to believe there is scope to improve the performance of these two properties.
“In the coming months we plan to carry out additional work designed to improve the productivity of the existing wells and this work will be scoped during the closing period.”