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Nostra Terra gains permit Permain Basin well
Oil and gas exploration and development company Nostra Terra announced on Monday that it has gained drilling approval for one of its locations in the Permain Basin, Texas.
A further two locations at the acreage are currently undergoing the permitting process and a well will be drilled in early May at the newly permitted Clear Fork formation, based on rig availability.
Nostra Terra holds between a 50% and 75% working interest in leases at the 240 mile wide and 300 mile long Permian Basin region, which is the second largest oil field in the world in terms of recoverable resources present.
Matt Lofgran, chief executive of Nostra Terra, said: "We're excited to be drilling the next well in the Permian Basin so quickly after the successful Twin Well and aim to continue growing production and increasing cash-flow further. The new well has a similar economic profile to the Twin Well and we plan to update shareholders regularly on progress."
The Twin Well has yielded an anticipated 2:1 return on investment at $40 per barrel of oil with an estimated ultimate recovery of 35,000 barrels of oil per well targeting 25-40 barrels of oil per day for the first year.
"Last month we announced the success of the Twin Well, in the Permian Basin, where initial production rates surpassed expectations. At the same time we also became cash-flow positive at the corporate level. Positive cash-flow generation has since continued to increase thanks to the production increase that we achieved in our Pine Mills asset in East Texas," said Lofgran.
The Pine Mills oilfield is a 2,400 acre producing oil field which Nostra Terra holds an 87.5% working interest in.
As of 1537 GMT, Nostra Terra's shares were up 4.11% at 3.80p.