Nostra Terra (AIM: NTOG), the oil & gas exploration and production company with a portfolio of development and production assets in Texas, USA is pleased to note the recent significant improvement in oil commodity price and its positive impact on the Company’s drive to become cashflow positive.
Over the past month WTI oil price has increased from around $40 per barrel to $45 per barrel which, on its own, materially enhances cashflow for Nostra Terra. The increase follows announcements that positive trial results have been achieved for vaccines against the Covid-19 virus.
As stated on 30 October 2020, Nostra Terra’s focus is very much on increasing cashflow through assets with lasting reserves. Covid-19 has had a very negative impact on the global economy and consequently on oil prices. The average WTI oil price during the first half of 2020 was US$25.45, per barrel (compared to US$57.39 in 2019).
In addition, during 2020 Nostra Terra made substantial reductions in corporate overhead as well as in lifting costs for its producing assets. As previously announced, some production was temporarily suspended during the period of lower oil prices in order to conserve capital. Those wells have now been put back online and production is back above pre-curtailment levels. We intend to announce production figures from H2-2020 in January. Completion of the Cypress well at Pine Mills, where the majority of Nostra Terra’s interest is carried by the farminee, is also underway and we anticipate updating on it shortly.
Matt Lofgran , Nostra Terra’sChief Executive Officer, said:
“Given the relatively fixed cost base (both corporate and in the field), the increase in oil prices from $40 to $45 has a significant impact on margins and cashflow to Nostra Terra. This in turn positively affects the value of our reserves and consequently our Senior Lending Facility, which provides capital that can be used for further acquisitions and drilling.
We’re finishing the year in a much, much stronger position than we started it. The Company, as planned, made significant reductions in corporate overhead and brought lifting costs down further. The significance being that any additional production will have that much more positive an impact.”
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014
