Nostra Terra Oil And Gas Share Discussion Threads

[chinese investor] 27/1/2016 15:58

Oil Continues To Recover !

[andy] 27/1/2016 15:46

NTOG is getting bogged down in a dispute over funds.

They prevailed last time, I wonder if they can repeat the feat here?

This looks like it could get really messy if a quick solution is not found. I wonder whether Ntog could even pay the required amount if required to do so? given the current price of oil. What is their margin here? Are the Chinese trying to break the JV by requesting this?

I guess it depends whether they have the money to pursue this, but it is good to note this will be heard under UK law in London rather than in Egypt!


RNS Number : 9053M

Nostra Terra Oil & Gas Company PLC

25 January 2016

25 January 2015

Nostra Terra Oil and Gas Company plc

("Nostra Terra" or the "Company")

Update re East Ghazalat concession

Nostra Terra and Independent Resources plc ("IRG") (AIM:IRG) make the following announcement in relation to the East Ghazalat concession in Egypt ("East Ghazalat").

In this announcement: "JV" means the joint venture between IRG and NTOG.


"North" or "NPIC" means North Petroleum International Company, a subsidiary of China ZhenHua Oil Co. North is the owner of the other 50% interest and operator in East Ghazalat (China Zhenhua Oil Co. is the wholly owned oil and gas arm of China North Industries Corporation ("NORINCO"), a Chinese state-owned company).


"JOA" means the joint operating agreement between North and the JV which governs East Ghazalat.


North has served a notice of default pursuant to the terms of the JOA in respect of unpaid cash calls for November and December 2015, which the JV estimates to be approximately $750,000. These cash calls had previously been rejected by the JV on the grounds that they were manifestly excessive, contained no justification for the level of funds demanded and failed to reflect the issues already raised by the JV under the JOA in relation to the 2015 budget.


The JV had previously served notice on North pursuant to the relevant provisions of the JOA that it intends to undertake detailed audits of the accounting and procurement processes, actual accounts, records and inventory for East Ghazalat for the 2013 and 2014 financial years.


These audits are in pursuance of the JV's policy, as previously stated on 15 October 2015, of seeking to improve operating margins through cost reduction initiatives and to implement further reserve enhancement opportunities in a disciplined and rigorous manner.


The JV believes that the service of the notice is in part in response to the submission of the audit request by the JV and the challenges it has been posing and continues to pose to North in its capacity as operator.


On completion of the acquisition, the right to recover under the unresolved audit for the 2012 year undertaken by TransGlobe was transferred to the JV. In the JV's view, proper process has not been followed by North or its predecessor as operator in response to the 2012 audit report served on them in early 2013. Accordingly, the JV believes that the overcharges identified in that audit, some $575,000, have become payable by North and it is seeking resolution of this matter urgently.


The JV believes and is advised that North are in substantial breach of the JOA inter alia in terms of the preparation approval and revision of budgets, in the provision of requested information to the JV (to which it is entitled under the JOA), in the provision of inadequate information to substantiate their cash call and in failing to declare or manage certain significant conflicts of interest to the detriment of the JV. In an environment of low and unstable oil prices the JV has challenged the budgets and the levels of expenditure being incurred but North have refused to respond despite their duty as Operator to do so under the JOA.


Accordingly, the JV is preparing a full and detailed Dispute Notice as required by the JOA and has served that on North. The JOA provides for arbitration in London under UK law if the dispute cannot be resolved.


The JV continues to be entitled to its share of the revenues from East Ghazalat, both past and future. The JV is continuing to progress arrangements for prompt invoicing and payment of its share.


The JV believes that a robust response and challenge to North both through the Dispute Notice and the audit process will result in greater control of overheads, better planning and management of operations in the field and the recovery of overcharges from the 2012 audit and the possibility of recovery of overcharges from the proposed audits.


Further announcements will be made in due course.

For further information, visit www.ntog.co.uk

[chinese investor] 27/1/2016 10:20

An escalating dispute with the operator of the East Ghazalat concession is a material blow to the IRG-NTOG JV and reduces the likelihood that important cost saving and operational enhancing measures will be implemented in the near-term.

Crucially, the JV remains entitled to its share of revenues and continues to work with EGPC to put in place arrangements for payments, which totalled US$601k outstanding at year end.

The company will provide updates in due course, but if a positive outcome can be achieved then the JV will be well placed to pursue its growth strategy in Egypt.

[chinese investor] 26/1/2016 18:44

Oil Recovering Strongly !

[pdtrussell] 25/1/2016 16:10

IRG and NTOG are in trouble... lawyers are cheep aren't they?

[chinese investor] 25/1/2016 15:04

I looks like Independent Resources are in trouble.

[chinese investor] 25/1/2016 14:48

Update re East Ghazalat concession

Nostra Terra and Independent Resources plc ("IRG") (AIM:IRG) make the following announcement in relation to the East Ghazalat concession in Egypt ("East Ghazalat").

In this announcement:

"JV" means the joint venture between IRG and NTOG.

"North" or "NPIC" means North Petroleum International Company, a subsidiary of China ZhenHua Oil Co. North is the owner of the other 50% interest and operator in East Ghazalat (China Zhenhua Oil Co. is the wholly owned oil and gas arm of China North Industries Corporation ("NORINCO"), a Chinese state-owned company).

"JOA" means the joint operating agreement between North and the JV which governs East Ghazalat.

North has served a notice of default pursuant to the terms of the JOA in respect of unpaid cash calls for November and December 2015, which the JV estimates to be approximately $750,000. These cash calls had previously been rejected by the JV on the grounds that they were manifestly excessive, contained no justification for the level of funds demanded and failed to reflect the issues already raised by the JV under the JOA in relation to the 2015 budget.

The JV had previously served notice on North pursuant to the relevant provisions of the JOA that it intends to undertake detailed audits of the accounting and procurement processes, actual accounts, records and inventory for East Ghazalat for the 2013 and 2014 financial years.

These audits are in pursuance of the JV's policy, as previously stated on 15 October 2015, of seeking to improve operating margins through cost reduction initiatives and to implement further reserve enhancement opportunities in a disciplined and rigorous manner.

The JV believes that the service of the notice is in part in response to the submission of the audit request by the JV and the challenges it has been posing and continues to pose to North in its capacity as operator.

On completion of the acquisition, the right to recover under the unresolved audit for the 2012 year undertaken by TransGlobe was transferred to the JV. In the JV's view, proper process has not been followed by North or its predecessor as operator in response to the 2012 audit report served on them in early 2013. Accordingly, the JV believes that the overcharges identified in that audit, some $575,000, have become payable by North and it is seeking resolution of this matter urgently.

The JV believes and is advised that North are in substantial breach of the JOA inter alia in terms of the preparation approval and revision of budgets, in the provision of requested information to the JV (to which it is entitled under the JOA), in the provision of inadequate information to substantiate their cash call and in failing to declare or manage certain significant conflicts of interest to the detriment of the JV. In an environment of low and unstable oil prices the JV has challenged the budgets and the levels of expenditure being incurred but North have refused to respond despite their duty as Operator to do so under the JOA.

Accordingly, the JV is preparing a full and detailed Dispute Notice as required by the JOA and has served that on North. The JOA provides for arbitration in London under UK law if the dispute cannot be resolved.

The JV continues to be entitled to its share of the revenues from East Ghazalat, both past and future. The JV is continuing to progress arrangements for prompt invoicing and payment of its share.

The JV believes that a robust response and challenge to North both through the Dispute Notice and the audit process will result in greater control of overheads, better planning and management of operations in the field and the recovery of overcharges from the 2012 audit and the possibility of recovery of overcharges from the proposed audits.

[whoppy] 25/1/2016 14:43

Looks like the Chinese have been caught with their fingers in the till.

[andy] 23/1/2016 09:55

Chinese,

Do you think they are making any money at the current POO?

[chinese investor] 23/1/2016 09:26

"Due to the number of operators we deal with in the USA, production and revenue figures for that region were not finalised at the time of this release and will be incorporated in later updates"

[andy] 23/1/2016 08:58

Barnet,

Do you think they are making any money at the current POO?

Why do you think the bank is "taking a lot of the risk"?

[barnetpeter] 22/1/2016 22:20

In the current environment with lower oil prices Nostra Terra is seeing an increasing number of attractive opportunities. The Board feels that now is an ideal time to acquire producing assets, such that they can be acquired with debt.

this is now a fairly decent punt I feel. Of course it may well go bust but the bank is taking a lot of the risk and this is priced at option money. A grand punt may be worth many times that in two years....

[chinese investor] 22/1/2016 15:07

Looking Good !

[chinese investor] 22/1/2016 09:20

No US Numbers !

[neilyb675] 20/1/2016 17:10

Nostra Terra is in various stages on deals, including contract negotiations on certain producing assets within the USA.



Matt Lofgran, Chief Executive Officer of Nostra Terra, commented:


"Our focus is on the acquisition of producing assets with further, low risk upside potential. Many of the companies struggling today either have assets with higher operating costs, have applied leverage at much higher oil prices, or sometimes both cases. With low oil prices we see this as an opportune time to acquire assets using debt. This strategy allows us to grow our production and reserves now, which should have a significant positive impact on cash flow when oil prices strengthen.


We have two different groups covering each focus area of the Company. They are actively evaluating new opportunities, performing due diligence, and in contract negotiations. We look forward to updating on the progress of these in future announcements."

[chinese investor] 20/1/2016 12:11

Egypt

July 6,787 $144,726
August 6,292 $108,911
September 5,906 $104,820
October 4,629 $82,446
November 5,171 $83,374
December 5,600 $76,679

[reba] 20/1/2016 11:58

Doesn't look good to me now.
Typical aim. good RNS and down we go.
Waste of time AIM

[chinese investor] 20/1/2016 08:46

Looking Good !

[andy] 12/1/2016 12:05

WTI now $31.23.

And yet we had a brief spike here this morning you have to wonder why?

Press rumours of Nigeria and a "couple of other OPEC members" calling an emergency meeting, maybe the pain is becoming too great now?

On the negative side, the Iranians took out their reactor core yesterday, fulfilling one of the final conditions before their oil could be freely sold again, so it may get worse before it gets better!

[andy] 11/1/2016 22:30

Wow!

WTI now at $31.45!

Hard to believe the share price is holding up so well considering margins must be wafer thin.

[johndee] 08/1/2016 15:51

Holding up very well. Impatience at IRG but some very large holders there.