Last checked at 25 Oct 2012 11:30
AIM: NTOG
25 October 2012
Nostra Terra Oil and Gas Company plc
("Nostra Terra" or the "Company")
Chisholm Trail - 3rd Well Spudded & Operations Update
Nostra Terra, the AIM quoted oil and gas producer with projects in the USA, is pleased to announce that the first two wells have been drilled and the third horizontal well has spudded in the Chisholm Trail Prospect, located in Oklahoma.
Nostra Terra owns a 20% interest in the overall Chisholm Trail Prospect, spearheaded by Ward Petroleum. There will be a well-by-well variance in NTOG's working interests ("WI"s) because of differences in Ward's primary position in each of the wells. Due to the high interest in this entire play, all available options to participate in the third well were exercised during the forced pooling and election process resulting in a reduction in Nostra Terra's WI to 12.58% from 20% on this particular well. Notwithstanding the change in the WI, the Board is pleased by the acceleration of drilling in the area, where more wells than originally anticipated are being drilled.
The third well is expected to take approximately 30 days to drill, followed by completion and initial production testing.
The first and second wells in the Chisholm Trail Prospect have both finished drilling. Completions are scheduled and expected shortly.
A fourth well is planned to be drilled by the end of 2012, with leasing activity ongoing and more drilling planned in 2013.
Chisholm Trail Drilling Activity (currently permitted wells) | |||
Well | Working Interest | Current Status | Production (boepd) |
Chisholm Trail 1 (CT1) | 0.47% | Drilled, waiting to complete | (TBD) |
Chisholm Trail 2 (CT2) | 0.16%* | Drilled, waiting to complete | (TBD) |
Chisholm Trail 3 (CT3) | 12.58%* | Drilling | (TBD) |
Chisholm Trail 4 (CT4) | 5.31%* | Pre-drilling preparation | (TBD) |
*Some net interests have changed during the forced pooling and election process.
Matt Lofgran, Chief Executive Officer of Nostra Terra, commented:
"The first two wells in the prospect have been drilled and are awaiting completion. The third has spudded with surface casing set and is drilling, and the fourth is scheduled to follow shortly. The activity level on the prospect is increasing at a rapid pace and we're delighted to have a meaningful participation in the play, where we expect production and revenues to have a positive impact on the Company."
Alden McCall, Chief Operating Officer of Nostra Terra explains the variances in Working Interest Percentages:
"After a prospect area is identified, the right to explore and produce hydrocarbons is obtained by leasing minerals in dozens of different tracts from all persons owning those mineral rights. Some of those minerals will be leased by Ward and some will be leased by competitor companies. In the end, the percentage of minerals leased by Ward in any given tract, relative to the total required to explore, is the Working Interest owned by Ward. For example, if 60% of the minerals are leased by Ward, then Ward's Working Interest will be 60%. The companies that leased the remaining 40% can 'elect' (have the option to participate in their pro-rata cost of the drill Working Interest) or to farm their interest out to Ward. Nostra Terra, in turn, will participate in 20% of whatever Ward's interest turns out to be after the election period. Nostra Terra's Working Interest in this example would be 12% (20% of 60%)."
Nostra Terra will make further announcements as the operations progress.
For further information, visit www.ntog.co.uk or contact:
Nostra Terra Oil and Gas Company plc
Matt Lofgran, CEO
mlofgran@ntog.co.uk Telephone: +1 480 993 8933
Shore Capital & Corporate Limited (Nominated Adviser)
Bidhi Bhoma/ Toby Gibbs Telephone: +44 (0)20 7408 4090
Alexander David Securities Ltd
David Scott / Bill Sharp Telephone: +44 (0)20 7448 9812
Lothbury Financial Services Limited
Gary Middleton / Michael Padley Telephone: +44 (0)20 7868 2010
Notes:
In September 2012, Nostra Terra entered into an agreement with Ward Petroleum for the Chisholm Trail Prospect, a multi-well horizontal drilling project in Oklahoma. The prospect area is large in size and a leasing program is on-going. Nearby drilling has resulted in several wells that produce in excess of 200boepd after the first 30 days of "flush" production. Nostra Terra owns a 20% interest in this active program within which working interests in the individual wells vary. Based on results from neighbouring wells, we anticipate this prospect also has the potential to deliver rapid payouts with continued strong production levels.
Ward Petroleum Corporation, based in Enid Oklahoma, was founded in 1963 by Lew Ward, its Chairman. Mr. Ward is a past-President of the Independent Producers Association of America (IPAA) and is a respected member of the oil producers' community of the United States. Among its industry honours, Ward Petroleum has been listed in the top 100 fastest growing American companies by Inc. magazine, and has been named a "Blue Chip Enterprise" by Nations Business magazine. Since its founding, Ward Petroleum has drilled more than 800 wells in the Anadarko and Arkoma Basins, some as deep as 22,000 feet. Ward Petroleum operates nearly 350 wells in Oklahoma throughout both basins.
Oklahoma is the fifth largest producing state in the United States in crude oil production. Despite its long history, it still produces about one quarter of the peak rate that was reached in 1927. The state was the birthplace for such commonly recognized corporate names as Halliburton, ConocoPhillips and J. Paul Getty.