Nostra Terra wishes to notify shareholders that the loan agreement entered into between the Company’s subsidiary, New Horizons Energy 1 LLC (“New Horizons”), and Washington Federal Bank (“WAFB”) (the “Loan Agreement”), as announced on 8 January 2018, contains a number of customary negative covenants, one of which relates to the ongoing appointment of Matt Lofgran as President of New Horizons (the “key man clause”).
The key man clause stipulates that New Horizons must obtain written consent from WAFB prior to Matt Lofgran ceasing to be President of New Horizons. Otherwise New Horizons will have 30 days to remedy the situation or it will be in default of the Loan Agreement and the outstanding principal and interest will immediately become due.
In the event Matt Lofgran is voted off the Board at the Company’s forthcoming General Meeting, there is no guarantee that Mr Lofgran would remain as an employee of the Nostra Terra group, and therefore as President of New Horizons. Accordingly, the Company’s Board at such time would seek the written consent of WAFB to waive the key man clause, however, there is a risk that this would not be given.
About Nostra Terra
Nostra Terra is seeking to increase oil production and reserves through both organic growth and strategic acquisitions, utilising the latest drilling and completion techniques.
Nostra Terra’s core asset is a 100% working interest in the Mesquite asset located in the prolific Permian Basin, West Texas. The Mesquite asset covers 1,984 net acres with estimated proven recoverable reserves of 2.4mmbbls.
In addition, Nostra Terra has a 100% working interest in the well-established East Texas region, and interests in three additional Permian Basin properties in close proximity to Mesquite and is currently producing from two wells. The first well reached pay-out in less than one year.
The Permian Basin, which covers 75,000 square miles over West Texas and southeast New Mexico, is the most prolific oil-producing basin in the country.
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