Nostra Terra on the up as it buys 80% stake in Texas oil field

The company bought an 80% working interest in the Pine Mills oilfield and assets in Wood County from GFP Texas.

The $1.02m was financed from existing cash resources with the balance from a director loan facility.

Pine Mills, a 2,400-acre oil field, which the company is now operator of, currently produces an average of 100 barrels of oil per day and is profitable below $30 per barrel.

It has no legacy or other spending commitments attached to it and all leases on Pine Mills are ‘held by production’, which gives the company control over the timing of any future capital expenditure decisions.

Cue Resources, the previous operator, said that Pine Mills has reserves of 373,000 oil barrels as of 1 September and has previously produced about 12.3m barrels of oil from inception. It has the potential to produce 150 barrels of oil per day.

Chief executive Matt Lofgran said Pine Mills is a perfect fit for the company's strategy as it reduced year-on-year running costs by 40% and refinanced the balance sheet through the sale of its interest in the Chisholm Trail prospect.

“Our goal has been to acquire assets, which we operate and where we control the pace of development. Pine Mills fulfills both key criteria. With Pine Mills profitable below $30 per barrel, the project will help underpin our business model as we continue grow the business.

“Since our core US team is based in Texas, Nostra Terra has excellent local knowledge of the operating environment. This is now our second acquisition in Texas this year, and we intend to focus our energies on securing more producing assets across this prolific oil region."

Shares in Nostra Terra Oil were up 59.26% to 2.15p at 1005 GMT.