Nostra Terra Oil and Gas (NTOG) shares up on growth strategy
16:21, 5 January 2022
Shares of oil and gas exploration and production company Nostra Terra were up 4.48% on the London Stock Exchange on Wednesday morning after the business published its growth plans for this year.
The company, which has a portfolio of producing assets in the US, said as a result of increased production, strengthening oil prices and “prudent management,” it is now self-funding.
“The company is planning the drilling of three to four new wells in Texas. The necessary capital expenditure will be funded from existing cash resources, facilities and cash generated from Nostra Terra’s oil producing portfolio, and it is expected that production from these additional wells will grow free cash flow significantly,” Nostra Terra said in the update. “The wells are within the company’s existing areas of operation, thus minimising drilling risk and utilising synergies, which will enable lower operating costs post-drilling and completion”.
Nostra Terra operations
The company noted Pine Mills, its first well in the Cypress farmout acreage, was put into production a year ago and outperformed expectations.
“The well continues to produce without decline. Additional leasing took place last quarter expanding the farmout acreage position held with our partner Cypress (as announced on 8 November 2021) in preparation for the second well to be drilled. Operations for the second well are planned this month,” the company said.
Moreover, the company said its operations in the Permian Basin continue to be strong contributors to its cash flow.
“Progress has been made towards drilling new development wells in the same area. The company now intends to drill 2 to 3 wells in the Permian Basin during 2022,” the company added.
Further expansion
The business also said it will continue to pursue an opportunity in Tunisia, as previously announced in November 2021. The project could provide “significant upside potential through exploring a large, gas-prone acreage position in a very prospective region at a time when the gas market is very strong,” the company said.
“Nostra Terra finished the year in a strong position. The company is cash flow positive to the corporate level and has multiple wells planned to drill throughout the year, all funded without need for dilution,” Nostra Terra CEO Matt Lofgran said in the update. “We anticipate these wells having a strong contribution to cash flow after allowing for further investment for growth in other areas. In addition to this, we continue to work on additional opportunities in other areas of the world that we feel could have a large impact to our growth”.