23rd Jan 2017 11:49
LONDON (Alliance News) - Nostra Terra Oil & Gas Co PLC on Monday said it expects to make further operational improvements at the Pine Mills project and to increase its production at the Permian Basin "steadily".
The oil and gas exploration company said in the first two months since it took over as operator of the Pine Mills oil field in Texas, it has focused primarily on cutting costs and streamlining operations.
Lifting costs in December at the field were USD18.46 per barrel compared to USD18.93 per barrel in November, and the group said the net operating margin of the project increased to 42.5% in December from 39.4% in November.
Gross monthly production rose to 100 barrels of oil per day in December from 97 barrels of oil per day in November, Nostra Terra said.
The group said it expects to report further operational efficiencies at Pine Mills "in due course".
Elsewhere, Nostra Terra had announced the acquisition and planned workover of certain leases at the Permian Basin in Texas last November, and said on Monday that this workover "was a success".
The group acquired interests in four wells on the leases, with two active and two inactive wells, and said prior to the initial workover it increased its working interest to between 57.2% and 68% in the leases.
Nostra Terra said one of the inactive wells in Mitchell County, Texas, was returned to production and oil is being sold, though noted this only took place last week and it is "too soon" to announce stabilised production figures. However, Nostra Terra said the initial days of production were "encouraging" and exceeded management expectations.
The group said it has determined that potential for further production upside exists both through workovers and new wells, which it can drill at its discretion.
"We have hit the ground running at Pine Mills and have surpassed my personal expectations for what we could achieve in the first two months. We expect still to make further operational improvements at Pine Mills to increase our overall profit. This will improve the company's cash position and enable us to keep making progress using existing cash resources," said CEO Matt Lofgran.
"We're also happy with the results of the workover in the Permian Basin, a second focus area for us in Texas. This supports our plans in the region, both on these leases and other leases we have identified as acquisition targets," Lofgran added.
Nostra Terra said its goal was to increase production steadily in the Permian Basin as well as its exposure to "this attractive oil province", and said going into 2017, it is looking to achieve 150 barrels of oil per day.
Shares in Nostra Terra were up 9.6% at 2.60 pence on Monday.
By Hannah Boland; [email protected]; @Hannaheboland
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