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Nostra Terra Oil and Gas shares rise as it gives Mesquite insights

Published: 09:33 21 Jan 2019 GMT

oil and gas operations
Nostra shares were up 9%

Nostra Terra Oil and Gas Company plc (LON:NTOG) shares were up around 9% in Monday’s deals after the firm gave new insights from the Mesquite Asset in the Permian Basin.

The company, in a statement, highlighted the initial findings of an ‘engineered economics report’ for the project, which covers some 1,284 acres in the United States.

It told investors that the report’s author Trey Resources suggested the project could yield some 2.4mln recoverable (‘estimated ultimate recovery, or, EUR) barrels of oil, and, estimated that net present value would be US$21.6mln for the project.

READ: Monday’s stock market movers report

On a well by well basis, Trey indicated that a 1,524 metre lateral well could yield 300,000 barrels of crude (EUR) and would be valued at US$2.5mln (NPV10) and would deliver a 34% internal rate of return.

Such a well would cost around US$2.9mln to drill and complete, according to Trey, which added that the wells would have a 20-year life and would produce around 100,000 barrels of crude over their first three years.

Nostra added that it is now working to deliver a field development plan based on the report’s finding, and, it expects that report enables the start of a farm-out process to bring in funding partners – the process is now expected to get underway shortly.

"We're very excited to have such strong confirmation of the potential of the Mesquite asset,” said Matt Lofgran, Nostra chief executive.

He added: “The Report we received from Trey has helped us build a compelling investment case for Mesquite.

“The base case is built on conservative numbers and demonstrates a clear path to substantial value for a Company of our size.”

Nostra Terra shares were up 0.25p or 9.26% changing hands at 2.95p each.

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