Nostra Terra loses exclusive acquisition rights in Permian Basin

Nostra Terra Oil & Gas was still in limbo over its proposed acquisition of an interest in New Mexico producing assets on Wednesday, announcing it was continuing to seek debt financing via a secured bond to complete the deal.

The AIM-traded company had revealed its plans to take on the working interest in Alamo Resources II’s Permian Basin operations on 5 April.

In its announcement on Wednesday, its board said it was continuing to work closely with the seller to complete the proposed acquisition, and promised to continue its efforts to secure the necessary debt funding.

However, it did warn that it has not negotiated a further extension to the closing of the acquisition of the assets, and as such no longer has an exclusive right to do so.

“The board has sought to minimize dilution to existing shareholders where possible and as such is seeking to close the acquisition of the Permian Assets through the issue of a bond instrument,” it said in a statement.

“Nostra Terra remains in ongoing discussions with a number of interested parties for provision of a bond but despite the recent rally in the price of oil, financing conditions remain tight within the industry.

“However, the board believes that the purchase price for the Permian Assets, cash flow projections for the asset and approximate lifting costs present a financially attractive proposition,” it explained.

At 1155 BST, shares in Nostra Terra were down 33.33% at 1.5p.