Nostra Terra, the oil & gas exploration and production company with a portfolio of development and production assets in Texas, USA, is pleased to provide an operations update on all assets.

During the third quarter, Nostra Terra acquired the Caballos Creek Asset - an oil producing asset in South Texas, progressed planned drilling of a new well at Pine Mills and signed a farm-in agreement for a new oil producing asset in the Permian Basin.

During the fourth quarter the Board's goals are to deliver significant increases in production and reserves across the portfolio. Work is focused on assets that will generate near-term cashflow with lasting reserves.

Caballos Creek (South Texas)

In September 2020, the Company announced the acquisition of this oil producing asset which is already cash generative. The acquisition was completed in less than a month, with non-dilutive financing. Nostra Terra has now assumed operations and is undertaking a thorough review of engineering and geology to assess additional upside opportunities in the field. Initial work has identified multiple potentially productive formations in the oil field, where we believe there is significant additional pay behind pipe. These targets are anticipated to be low cost to access and would represent additional reserves not included in the original reserve figures announced on 2 September. Nostra Terra plans to commission a new reserve report and will update shareholders on its completion.

Pine Mills (East Texas) 

In April 2020 a farm-in agreement was announced where a third-party would drill a new well on a currently undrilled area of Nostra Terra's 100%-owned Pine Mills asset. Nostra Terra is receiving a 25% carried working interest ("WI") (at no cost to Nostra Terra) in the new well and the immediately surrounding undrilled acreage and has exercised an option to participate for another 10% WI at cost (7.5% WI factoring in the carry), giving the Company a total of a 32.5% WI in the well. As announced on 8th October and 19th October 2020, progress towards drilling the new well continues. Drilling is anticipated shortly, in an area that has become increasingly active of late.

Permian Basin (West Texas) 

In September 2020 Nostra Terra signed a farm-in agreement ("Farm-in") where Nostra Terra has an option to acquire a 75% WI in an existing oil producing asset in the Permian Basin, details of which are contained in the announcement of 21 September. This is Nostra Terra's fourth acquisition in the area in recent years. This asset is similar to the first three acquisitions, in which the assets had minimal production from existing wells, however, we recognised significant upside potential which could be realised through workovers and new wells. This is exemplified by the third acquisition that produced 3.5 bopd when acquired (similar to the Farm-in assets), where we later drilled the Twin Well which reached payback in less than a year (see RNS of 4 February 2019). The new asset is only 6 miles from the Twin Well with similar geology. Nostra Terra will be re-entering one of the three existing wellbores and completing the well in the same target formation and using the same completion techniques already successfully employed in the Twin Well. An engineering firm has been engaged to prepare for the first well. Under the Farm-in, Nostra Terra will earn 50% of the net cashflow for the life of this well, with an option to acquire a 75% WI in the entire asset.

Nostra Terra's work program is fully-funded and the upcoming activity is anticipated to produce significant additional cashflow for the Company. This cashflow is expected to remain robust, even at subdued oil prices.

The Company's existing producing assets in East and West Texas remain in production and the Company will report on the results of these in its interim accounts to 30 June 2020 which are expected to be published at the end of this month.

Matt Lofgran, Nostra Terra 's Chief Executive Officer, said:
"We've previously stated that we're focused on increasing our cashflow in the near-term, through acquisition and development of producing assets or those that can be put into production quickly, all with long-life reserves and additional upside opportunity.

We now have three distinct areas of operations further balancing our portfolio, with activity in each area aimed towards increasing production and reserves in the near-term. Those activities are now fully-funded for the current work programmes through investment from new and existing institutional and professional investors. We look forward to updating on all fronts as progress continues."

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