Nostra Terra buys oil producing assets in Texas for £60,000

Oil and gas explorer Nostra Terra has bought producing assets in the Permian Basin in Texas for £60,000 and has also received $100,000 for the sale of its stake in the Chisholm Trail prospect in Oklahoma.

The Permian Basin assets were bought using the company’s existing cash resources and the leases include a 75% working interest in nine wells across an additional 200 acres in Mitchell County, and 18 future drilling locations.

Currently, two of the nine wells are producing about two barrels of oil per day, five are shut-in and there is one injection well, while a rig is scheduled for the first of these workovers, which is also being funded from existing cash resources.

All three leases are held by production, so they have no expiration date and no required work programme and remain in effect so long as the leases remain in production.

The AIM-listed company said it has identified further possible acquisition targets in the same area.

As a result of this acquisition and its previous acquisition of a 57% to 68% working interest in four wells across 50 acres in Mitchell County, Nostra Terra now has the potential to materially increase potential production in the region and as operator of the licences Nostra Terra is in control of the pace and timing of development.

The company has also received $100,000 held in escrow related to the sale of its interest in the Chisholm Trail prospect, which it sold due to the 20 fold increase in acreage costs since the acquisition of the interest.

Chief executive Matt Lofgran said: "We now have a robust pipeline of potential opportunities and are poised to continue growing. Our acquisition targets range from prospects the size of today's acquisition to significantly larger ones.”

Shares in Nostra Terra were up 7.33% to 2.41% to 0915 GMT.