Nostra Terra Lifts Pine Mills Reserves 38%, Partners-Up With Neighbour

LONDON (Alliance News) - Nostra Terra Oil & Gas Co PLC on Thursday said it has updated the ...

Alliance News 7 December, 2017 | 1:31PM
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LONDON (Alliance News) - Nostra Terra Oil & Gas Co PLC on Thursday said it has updated the level of reserves at the Pine Mills oilfield in the US state of Texas, showing a "significant increase" in the amount of proven reserves.

Nostra Terra shares were up 16% on Thursday afternoon at 4.47 pence.

Nostra Terra reported a 38% rise in proven reserves at its wholly-owned field, to 450,280 barrels of oil from 326,000 barrels at the end of April. Notably, the April-end figure has been adjusted to reflect the increase in Nostra Terra's stake since.

Proven reserves are classed as those developed enough to be in production.

In addition, the company said "significant additional" possible reserves have been assessed, which could be the target of future drilling. In the Woodbine-Wagoner, there is thought to be 1.4 million barrels of gross recoverable possible reserves, based on an internal assessment of an existing independent study, Nostra Terra said.

Pine Mills is made up of several leases over approximately 2,400 acres; all leases are 'held by production', meaning they have no expiration date and no required work programme, and remain in effect so long as the leases remain in production. This allows Nostra Terra the flexibility to farm-out should it so decide, or to drill further wells at its own discretion.

The independent study that has been assessed was conducted back in 2014, when Nostra Terra was looking for room to grow the project.

A total of five potential development projects were identified in the Woodbine and Sub-Clarksville formations, including "neglected oil" which could be accessed mainly through well workovers.

"The largest upside identified is the potential development of the Woodbine-Wagoner oil 'skirt' (23 deg API), with up to 12 potential new well locations and 1.39 million barrels of gross technically recoverable oil, classified as 'possible' reserves," said Nostra Terra.

Nostra Terra is hoping to benefit from other operators working nearby, partnering with a neighbouring operator that is planning to drill a well, which if successful, could de-risk some of the possible reserves at Pine Mills.

"Nostra Terra has now formally granted the approval required by the Texas Railroad Commission (the local governing authority) to allow the operator to drill closer than usual to the common lease boundary. The well is currently being permitted and is anticipated to be drilled next month. Results of the well will be shared between the operator and Nostra Terra," said the company.

Chief Executive Matt Lofgran highlighted that Pine Mills has been profitable every month since it took over operations. The CEO said the business is primarily focused on increasing cash flow, but given the strengthening in the oil markets it can now look at other development and exploration potential.

By Joshua Warner;

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Nostra Terra Oil & Gas Co PLC 3.88 GBX 0.72 -
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