Source - LSE Regulatory
RNS Number : 9209J
Nostra Terra Oil & Gas Company PLC
16 December 2022
 

 

 

16 December 2022

 

Nostra Terra Oil and Gas Company Plc

("Nostra Terra" or "the Company")

 

Substantial increase in Senior Facility

 

Nostra Terra (AIM: NTOG), the international oil & gas exploration and production company with a portfolio of production and development assets in Texas, USA, is pleased to announce a significant expansion in its Senior Lending Facility ("Senior Facility" or "Facility"), along with an increase in the Company's asset value.

 

 

Highlights

 

Senior Facility

·    Borrowing Base increase to $4,350,000 (from $3,350,000 on 28 March 2022), a 30% increase vs March 2022

·    Interest Rate: 6.50% (previously 4.40%)

 

WAFD Valuation

·    Future Net Income: $34,350,110 a 6% increase vs March 2022

·    NPV10: $17,196,390 an 18% increase vs March 2022

 

 

Senior Facility & Corporate Valuation

The Company has received a large increase in the borrowing base, providing it with access to additional non-dilutive capital which is available to supplement cash flow from operations and to further its growth plans.

 

WAFD, the provider of the Facility, estimate of Future Net Income has increased by 6% whilst Net Present Value (at a 10% discount rate) has increased by 18% since the prior redetermination in March 2022. The Borrowing Base of the $10,000,000 Senior Facility has been increased to US$4,350,000 based on improved production during the first half of 2022, hence an additional US$1,000,000 is available for utilisation compared with 28 March 2022. As at 30 June 2022, the Company had drawn down $3,235,000 under the Senior Facility.

 

The size of the Facility and Borrowing Base will continue to be reassessed at least twice yearly. The Board anticipates the Facility and Borrowing Base will continue to expand as the Company's production, cashflows and reserves increase. The current interest rate on the facility is 6.5%. The Facility is not restricted to any geographical region and can expand further for use with acquisitions of other producing assets.

 

Asset Valuation

WAFD has updated its borrowing base estimate using a report from a third-party engineering firm, APN Energy ("APN"), effective 1 September 2022. The report was prepared by APN for the Company for submission to WAFD. The Company expects to report updated reserve figures in the next redetermination.

 

Assets included are as follows:

 

Asset

Operator

Interest (%)

Status

Lease expiration

Total Acres (gross)

Pine Mills

NTOG

100%

Producing and Development

HBP

2,320

Pine Mills (Cypress farmout)

Cypress

32.5%

Producing and Development

HBP

160

Permian Basin

NTOG

53-100%

Producing and Development

HBP

1,280

 

 

Future Net Income attributable to the Company's interest, as determined by WAFD, using the price deck listed below is after deducting estimated future operating and development costs, production and ad valorem taxes, but before Federal income taxes.

 

 

Category

Future Net Income (USD)

Net Present Value

10% Discount Rate (USD)*

Proved Developed Producing

$18,418,540

$9,662,820

Proved Developed Non-Producing

$2,870,360

$1,715,320

Proved Undeveloped

$13,061,210

$5,818,250

Total Proved

$34,350,110

$17,196,390

 

 

Future revenues were estimated using an oil price (WTI) forecast supplied by the lender which follows:

 

Year

Oil ($/bbl)

2022

$65.25

2023

$64.50

2024

$62.25

2025

$62.00

2026

$61.75

3% Price

Escalation to Cap

$70.00 CAP

 

 

 

 

 

Matt Lofgran, Nostra Terra's Chief Executive Officer, said:

 

"We're pleased to continue to deliver significant improvements in production, which have resulted in a further increase to the borrowing base of our senior lending facility. This provides us a lot of flexibility to grow from here using existing resources, without the need for dilution."

 

 

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014

 

Competent Person Disclosure

John Stafford, a Director at Nostra Terra with over 35 years' relevant experience in the oil industry, has reviewed this announcement for the purposes of the current Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in June 2009. Mr. Stafford is a Fellow of the Geological Society of London.

 

 

For further information, contact:

Nostra Terra Oil and Gas Company plc

Matt Lofgran, CEO

 

Tel:

+1 480 993 8933

Beaumont Cornish Limited

(Nominated Adviser)

James Biddle/ Roland Cornish

 

Tel:

+44 (0) 20 7628 3396

Novum Securities Limited (Broker)

Jon Belliss

 

Lionsgate Communications (Public Relations)

Jonathan Charles

Tel:

 

Tel:

 

+44 (0) 207 399 9425

 

 +44 (0) 7791 892509

 

 

 

Technical Glossary

 

$ - US Dollar

 

bbl - barrel

 

Borrowing Base - the amount of money that a lender is willing to loan a company, based on the value of the collateral the company pledges

 

Future Net Income or FNI - the projected Gross Revenues expected to be realised by the Company during such period less the sum of the Operating Costs payable.

 

Gross - total quantity or amount

 

HBP- Held by Production

 

Net - quantity or amount associated with Nostra Terra's interest

 

Net Present Value or NPV - the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
MSCEAAASFSDAFAA
Find out how to deal online from £1.50 in a SIPP, ISA or Dealing account. AJ Bell logo

Related Charts

Nostra Terra Oil And Gas Company PLC (NTOG)

0p (0.00%)
delayed 15:57PM