TIDMNTOG
RNS Number : 2455B
Nostra Terra Oil & Gas Company PLC
30 September 2022
30 September 2022
Nostra Terra Oil and Gas Company PLC
("Nostra Terra", "NTOG" or the "Company")
Interim Results for the six months ended 30 June 2022
Nostra Terra (AIM: NTOG), the oil and gas exploration and
production company with a portfolio of assets in the USA, is
pleased to announce its unaudited results for the six-month period
ended 30 June 2022. A copy of the Interim Results is available on
the Company's website, www.ntog.co.uk
Financial Highlights
-- 108% increase in Revenue for the period to $2,003,000 (30 June 2021: $963,000).
-- 381% increase in Gross profit from operations for the period
to $1,203,000 (30 June 2021: $250,000 profit).
-- 34% increase in total production for the period to 20,383
barrels oil (30 June 2021: 15,211 barrels oil)
o Average production during first half at 112 bopd net to Nostra
Terra (2021: 84 bopd)
o 50% reduction in Finance costs for the period
-- Sr. Lending Facility borrowing base increased by 43% from $2,350,000 to $3,350,000
-- Fouke #2 well completed and put into production (mid-May)
o Production surpassed management expectations
-- Grant East lease acquired and first well drilled
Post-period events:
-- Fouke #2 well reached payback in under 3 months
Chairman's report
The first half of 2022 saw Nostra Terra continue to make good
progress in implementing its strategy of realising value from its
existing Texas based assets - this has translated into a stronger
financial performance.
The ongoing war in Ukraine has kept global energy prices
relatively high. This effect is more marked for some fuels than
others, notably European gas which is heavily reliant on Russian
imports. Though WTI prices have fallen somewhat over the last
months, they remain high relative to long term averages. This is
anticipated to persist for some time and hence the Company believes
it is prudent to continue with its current strategy.
The cashflow produced by the combination of high oil prices and
our increased production volumes has allowed Nostra Terra to retire
a substantial proportion of its higher-cost debt over the reporting
period. The Board had previously identified this as an area where
expenditures could be used to good effect on our cost base, helping
reduce our finance costs by approximately 50% versus H1 2021
levels.
The Company's cashflow was also used to drill both the Fouke #2
and Grant East #1 wells in H1 2022. Fouke #2 continued the history
of good oil flow rates from Pine Mills wells with a stable rate of
140 bbls/day. The Texas Railroad Commission, as local regulator,
has been petitioned to have the production limit increased to allow
this well and Fouke #1 to produce at higher daily rates. Grant East
#1 proved less forthcoming, this was due to the completion rather
than a fundamental reservoir issue, however, the lessons learnt
from it and the data that it produced provide very useful insights
into planning future wells in the area.
In a very tight rig market, workover jobs on five existing Pine
Mills have been planned. Two of these wells are now complete and
scheduled to be put online shortly, leaving three wells to be
completed in the next reporting period. We anticipate that these
workovers will lead to a further increase production from this
prolific area.
Given the success in the field, resulting in a significant
increase in production and combined with stronger commodity prices,
we anticipate that our proven reserves will significantly increase.
We are in the process of having those estimates prepared by a
third-party engineering firm and will publish the results in due
course.
We continue to assess new upstream opportunities, both in the US
and elsewhere.
We were pleased to welcome Paul Welch as a non-executive
director in February this year. Paul brings with him excellent and
highly relevant knowledge and experience.
I would like to thank our shareholders for their continued
support over the past half year and look forward to updating you on
further developments in the future.
Dr Stephen Staley
Chairman
29 September 2022
Chief Executive Officer's report
We had a great first half of the year, delivering on our plans.
Our focus has been on increasing cashflow, which we did through a
combination of increasing revenues, while lowering our production
and finance costs.
We had a record period with over $2 million in revenue which is
the highest in the Company's history. More importantly our gross
profit was $1.2 million (over $1.4 million after non-cash items),
representing a 381% increase, also a record for the Company.
Average oil sales prices during the period were $98.28 per
barrel.
The Fouke #2 well was drilled and put into production mid-May
(only contributing to circa 1.5 months of the 6 months of figures).
It significantly exceeded expectations, surpassing even the
performance of the Fouke #1 well. Pine Mills has been a great asset
for the Company, and we are actively reviewing additional
opportunities within our existing leases with similar potential to
the Fouke wells.
The Grant East lease was acquired during the period, providing
over a dozen drilling locations. The Grant East #1 well was drilled
but, as announced in June, flowed an excessive amount of water
which impeded the flow of oil in commercial quantities. At a cost
of $813,000 this contributed significantly to the loss reported for
the period. The well results are being analysed to improve the
completion technique for future wells. The Grant East lease,
located in the Permian Basin, is a prolific area and adjacent to
other wells that Nostra Terra has successfully drilled and
completed previously.
We had a record period even while some wells were off-line due
to the expansion work on the production facilities at Pine Mills.
The primary objective being to increase the capacity of the water
injection and disposal system through workovers and recompletions
of the injection wells. This work is anticipated to be complete
this month after which the off-line wells will be returned to
production and the pump rates at currently producing wells will be
increased resulting in a further increase in production from this
asset.
Finally, and most importantly, this record period has been
achieved using only existing resources. As cashflow is now
increasing at the fastest rate in the Company's history, the funds
generated are being reinvested into growth opportunities while we
retire our higher-priced debt. We also anticipate the strong
cashflow to continue, resulting in a profit for the full year.
I wish to extend a sincere thank you to our shareholders for
your continued support and I look forward to updating you as we
continue to grow our Company.
Matt Lofgran
Chief Executive Officer
29 September 2022
For further information, visit www.ntog.co.uk
or contact:
Nostra Terra Oil and Gas Company
plc
Matt Lofgran, CEO +1 480 993 8933
Beaumont Cornish Limited
(Nominated Adviser) +44 (0) 20 7628 3396
James Biddle / Roland Cornish
Novum Securities Limited (Broker) +44 (0) 207 399 9425
Jon Belliss
Lionsgate Communications (Public
Relations) +44 (0) 7791 892509
Jonathan Charles
Nostra Terra Oil and Gas Company plc
Consolidated Income Statement
for the six months ended 30 June 2022
Unaudited Unaudited Audited
Six months Six months to Year to
to 30 June 31 December 2021
Note 30 June 2021
2022
$'000 $'000 $'000
------------------------------ ------- ---------------- ---------------- ------------------
Revenue 2,003 963 2,282
Cost of sales
Production Costs (581) (687) (1,708)
Depletion, depreciation,
amortisation (219) (26) (400)
---------------- ---------------- ------------------
Total cost of sales (800) (713) (2,108)
---------------- ---------------- ------------------
GROSS PROFIT 1,203 250 174
Exploration costs written (813) - -
off
Share based payment (80) (107) (68)
Administrative expenses (478) (316) (910)
Foreign exchange (loss)/gain (25) 2 (130)
---------------- ---------------- ------------------
OPERATING LOSS (193) (171) (934)
Finance costs (49) (98) (175)
Other income 39 - 21
---------------- ---------------- ------------------
LOSS BEFORE TAX (203) (269) (1,088)
Income Tax - - -
---------------- ---------------- ------------------
LOSS FOR THE PERIOD (203) (269) (1,088)
Attributed to:
Owners of the company (203) (269) (1,088)
Earnings per share expressed
in pence per share:
Continued Operations
Basic & Diluted (cents per
share) 3 (0.03) (0.04) (0.16)
------- ---------------- ---------------- ------------------
The Group's operating loss arose from continuing operations.
There were no recognised gains or losses other than those
recognised in the income statement above.
Nostra Terra Oil and Gas Company plc
Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2022
Unaudited Unaudited Audited
Six months Six months Year to
to to 31 December
30 June 30 June 2021
2022 2021
---------------------------------- ------------- ---------------- ---------------- -------------
$'000 $'000 $'000
---------------------------------- ------------- ---------------- ---------------- -------------
LOSS FOR THE PERIOD
Other comprehensive income: (203) (269) (1,088)
Currency translation differences 6 - - -
Total comprehensive income
for the period (203) (269) (1,088)
------------------------------------------------- ---------------- ---------------- -------------
Total comprehensive income
attributable to:
Owners of the company (203) (269) (1,088)
------------------------------------------------- ---------------- ---------------- -------------
Nostra Terra Oil and Gas Company plc
Consolidated Statement of Financial Position as at 30 June
2022
Unaudited Unaudited Audited
As at 30 As at 30 As at 31
June June December 2021
2022 2021
Note $'000 $'000 $'000
----------------------------- ----- ------------- ------------- ---------------
ASSETS
Non-current assets
Intangible assets 2,328 2,036 2,014
Property, plant and
equipment
- oil and gas assets 1,119 944 918
3,447 2,980 2,932
Current assets
Trade and other receivables 650 435 348
Deposits and prepayments 16 31 16
Cash and cash equivalents 114 162 45
------------- -------------
780 628 409
------------- ------------- ---------------
LIABILITIES
Current liabilities
Trade and other payables 1,153 622 948
Borrowings 273 699 518
Lease liabilities - 16 -
------------- ------------- ---------------
1,426 1,337 1,466
------------- ------------- ---------------
NET CURRENT LIABILITIES (646) (709) (1,057)
Non-current liabilities
Decommissioning liabilities 321 266 302
Borrowings 3,295 2,072 2,459
Lease Liabilities - - -
-------------
3,616 2,338 2,761
------------- ------------- ---------------
NET LIABILITIES (815) (67) (886)
============= ============= ===============
EQUITY AND RESERVES
Share capital 4 8,142 8,076 8,087
Share premium 22,115 22,044 21,976
Translation reserve (676) (676) (676)
Share option reserve 386 249 306
Retained losses (30,782) (29,760) (30,579)
------------- ------------- ---------------
(815) (67) (886)
============= ============= ===============
Nostra Terra Oil and Gas Company plc
Consolidated cash flow statement
For the six months ended 30 June 2022
Unaudited Unaudited Audited
Six months Six months Year to
to 30 June to 31 December
Notes 2022 30 June 2021 2021
$'000 $'000 $'000
------------------------------------- -------- ----------- ------------- ------------
Cash flows from operating
activities
Operating loss for the period (203) (269) (1,088)
Adjustments for:
Depreciation of property,
plant and equipment 113 8 208
Amortisation of intangible
assets 87 - 173
Exploration costs written
off 813
Depletion 19 - 38
Other Income (39) - (21)
Foreign Exchange 25 - -
Share based payment 80 107 68
Operating cash flows before
movements in working capital 895 (154) (622)
(Increase) /decrease in receivables (302) (94) 66
(Decrease)/increase in payables 208 49 285
(Increase)/decrease in deposits
and prepayments - 11 26
Interest paid 49 98 175
Cash generated/ (consumed)
by operations 850 (90) (70)
Cash flows from investing
activities
Purchase of intangible assets (1,214) (9) (160)
Purchase of plant and equipment (345) (172) (346)
Disposals 30 - -
Increase in decommissioning
liabilities 19 - 36
----------- ------------- ------------
Net cash from investing
activities (1,510) (181) (470)
----------- ------------- ------------
Cash flows from financing
activities
Proceeds from issued share
capital 194 756 794
Cost of shares issued - (62) (61)
Net borrowing 591 (235) (29)
Finance costs (49) (98) (175)
Lease payments (7) - (16)
----------- ------------- ------------
Net cash from financing
activities 729 361 513
----------- ------------- ------------
Increase/(decrease) in cash
and cash equivalents 69 90 (27)
Cash and cash equivalents
at the beginning of the period 45 72 72
----------- ------------- ------------
Cash and cash equivalents
at the end of the period 114 162 45
=========== ============= ============
Nostra Terra Oil and Gas Company plc
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2022
Share Deferred Share Share Translation Retained Total
capital shares premium option reserve losses
reserve
$'000 $'000 $'000 $'000 $'000 $'000 $'000
-------------------- -------- -------- -------- -------- ----------- -------- -----
As at 1
January 2022 1,538 6,549 21,976 306 (676) (30,579) (886)
-------------------- -------- -------- -------- -------- ----------- -------- -----
Loss for
the period - - - - - (203) (203)
Total comprehensive
loss for
the year - - - - - (203) (203)
Shares issued 55 - 139 - - - 194
Share based
payments - - - 80 - - 80
-------------------- -------- -------- -------- -------- ----------- -------- -----
As at 30
June 2022 1,593 6,549 22,115 386 (676) (30,782) (815)
-------------------- -------- -------- -------- -------- ----------- -------- -----
Share Deferred Share Share Translation Retained Total
capital shares premium option reserve losses
reserve
$'000 $'000 $'000 $'000 $'000 $'000 $'000
-------------------- -------- -------- -------- -------- ----------- -------- -----
As at 1
January 2021 1,369 6,549 21,508 142 (676) (29,491) (599)
-------------------- -------- -------- -------- -------- ----------- -------- -----
Loss for
the period - - - - - (269) (269)
Total comprehensive
loss for
the year - - - - - (269) (269)
Shares issued,
net of expenses 158 - 536 - - - 694
Share based
payments 107 107
-------------------- -------- -------- -------- -------- ----------- -------- -----
As at 30
June 2021 1,527 6,549 22,044 249 (676) (29,760) (67)
-------------------- -------- -------- -------- -------- ----------- -------- -----
Share Deferred Share Share Translation Retained Total
capital shares premium option reserve losses
reserve
$'000 $'000 $'000 $'000 $'000 $'000 $'000
-------------------- -------- -------- -------- -------- ----------- -------- -------
As at 1
January 2021 1,369 6,549 21,508 142 (676) (29,491) (599)
-------------------- -------- -------- -------- -------- ----------- -------- -------
Loss for
the year - - - - - (1,088) (1,088)
Total comprehensive
loss for
the year - - - - - (1,088) (1,088)
Shares issued,
net of expenses 169 - 468 - - - 637
Share based
payments - - - 164 - - 164
-------------------- -------- -------- -------- -------- ----------- -------- -------
As at 31
December
2021 1,538 6,549 21,976 306 (676) (30,579) (886)
-------------------- -------- -------- -------- -------- ----------- -------- -------
Nostra Terra Oil and Gas Company plc
Notes to the interim report
For the six months ended 30 June 2022
1. General Information
Nostra Terra Oil and Gas Company plc (Nostra Terra) is a company
incorporated in England and Wales and quoted on the AIM market of
the of the London Stock Exchange (ticker: NTOG). The principal
activity of the group is disclosed as described in the report
Chairman's statement and Chief Executive Officer's Report.
2. Basis of preparation
These financial statements have been prepared in accordance with
International Financial Reporting Standards and IFRIC
interpretations issued by the International Accounting Standards
Board (IASB) as adopted by the United Kingdom and with those parts
of the Companies Act 2006 applicable to companies reporting under
IFRS. The financial statements have been prepared under the
historical cost convention. This interim financial information for
the six months ended 30 June 2022 was approved by the Board on 28
September 2022.
The unaudited results for the six months ended 30 June 2022 do
not constitute statutory accounts within the meaning of Section 435
of the Companies Act 2006. The comparative figures for the 12
months ended 31 December 2021 are extracted from the statutory
financial statements which have been filed with the Registrar of
Companies and which contain an unqualified audit report, which did
however draw attention to a material uncertainty relating to going
concern and contained no statement under Section 498 (2) or (3) of
the Companies Act 2006.
Copies of this interim statement are available from the Company
at its registered office at Salisbury House, London Wall, London,
United Kingdom, EC2M 5PS. The interim statement will also be
available on the Company's website www.ntog.co.uk in accordance
with Rule 26 of the AIM Rules for Companies
3. Loss per share
The calculation of earnings per ordinary share is based on
earnings after tax and the weighted average number of ordinary
shares in issue during the period. For diluted earnings per share,
the weighted average number of ordinary shares in issue is adjusted
to assume conversion of all dilutive potential ordinary shares. The
group had two classes of dilutive potential ordinary shares, being
those share options granted to employees and suppliers where the
exercise price is less than the average market price of the group's
ordinary shares during the year, and warrants granted to directors
and one former adviser.
Unaudited Unaudited Audited
Six months Six months Year to
to to 31 December
30 June 30 June 2021
2022 2021
Loss per ordinary shareholders
($000) (203) (269) (1,088)
Weighted average number
of ordinary shares 718,736,004 686,349,263 692,287,657
Basic and diluted (cents
per share) (0.04) (0.04) (0.16)
------------ ------------ -------------
4. Share Capital
The issued share capital as at 30 June 2022 was 746,520,534
ordinary shares of 0.1p each (31 December 2021: 703,520,534; 30
June 2021: 695,520,634).
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END
IR PPUCUBUPPGMB
(END) Dow Jones Newswires
September 30, 2022 02:00 ET (06:00 GMT)
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