Nostra Terra Oil & Gas Company PLC Substantial increase in Senior Facility (9209J)

TIDMNTOG

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      Total Acres 
                              (%)                         expiration     (gross) 
                                         Producing 
 Pine Mills      NTOG        100%      and Development       HBP          2,320 
              ----------  ---------  -----------------  ------------  ------------ 
 Pine Mills 
  (Cypress                               Producing 
  farmout)      Cypress     32.5%      and Development       HBP           160 
              ----------  ---------  -----------------  ------------  ------------ 
 Permian                                 Producing 
  Basin          NTOG      53-100%     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   Net Present Value 
                                         (USD)          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       $70.00 CAP 
  Escalation to 
       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:     [phone] 
   Beaumont Cornish Limited 
    (Nominated Adviser) 
    James Biddle/ Roland Cornish        Tel:     [phone] 
   Novum Securities Limited (Broker) 
    Jon Belliss 
 
    Lionsgate Communications (Public    Tel:     [phone] 
    Relations) 
    Jonathan Charles                     Tel:     [phone] 
 

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.

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December 16, 2022 02:00 ET (07:00 GMT)