Senior Facility Expansion and asset value increase

28 March 2022

Nostra Terra Oil and Gas Company Plc

("Nostra Terra" or "the Company")

$10 Million Senior Facility Expansion

and a

Substantial Corporate Asset Value Increase

Nostra Terra (AIM: NTOG), the international oil & gas exploration and production company with a portfolio of production and development assets in Texas, USA, is pleased to announce a significant expansion its Senior Lending Facility ("Senior Facility" or "Facility"), along with a significant increase in the Company's asset value.

Highlights

Senior Facility

· Borrowing Base Increase to $3,350,000 (from $2,350,000), up 43% increase from 1 September 2021

· Interest Rate: 4.40% (no change)

Reserves & Valuation

· 2,148,090 gross barrels oil (1,073,960 net barrels oil) proven reserves, a 10% increase from 1 September 2021

· Future Net Income: $32,426,450 (total proved), a 37% increase from 1 September 2021

· NPV10: $14,632,340 (total proved), a 39% increase from 1 September 2021

Senior Facility & Corporate Valuation

The Company has received a large increase in the borrowing base, providing it with access to additional non-dilutive capital which is available to supplement cash flow from operations, to further its growth plans.

Estimated Future Net income has increased by 37% whilst Net Present Value (10% discount rate) has increased by 39%. The Borrowing Base of the $10,000,000 Senior Facility has been increased to US$3,350,000 based on improved production and cashflow during first half of 2021. The previous borrowing base was US$2,550,000, hence an additional US$1,000,000 is available for utilisation.

The size of the Facility and Borrowing Base will continue to be reassessed at least twice yearly. The Board anticipates the Facility and Borrowing Base will continue to expand as the Company's production, cashflows and reserves increase. The current interest rate on the facility is 4.40% which is unchanged from previous periods. The Facility is not restricted to any geographical region. The Company can deploy funds from the Facility for operational purposes and acquisitions in its current areas of operation in the USA, or in other areas, should the opportunity arise.

Reserves

Nostra Terra has updated its annual reserves ("Reserves"), using a third-party engineering firm APN Energy ("APN"), effective 1 February 2021. The reserves report was prepared by APN for the Company for submission to the Washington Federal Bank.

Assets included are as follows:

Probable or Possible reserves have not been included in this assessment. The Company's producing asset Caballos Creek in South Texas has also not been included in the Reserves or Senior Facility.

Total net proved reserves have increased by 10% when compared to the 1 September 2021 reserves (1,073,960 barrels oil versus 973,180 barrels oil). This reserve increase does not, however, include the recent results of the Fouke 2 well which will only be included after it has been successfully completed and placed on production. All reserve growth was funded from corporate cashflows and not expansion of the Facility.

Net oil reserves were generated using decline curve analysis and applying bank pricing per table further below. Net total proved reserves have been estimated to be as follows:

Future net income is determined after deducting estimated future operating and development costs, production and ad valorem taxes, but before Federal income taxes.

Net incomes are defined as a portion of gross revenues attributable to the Company's interest after deducting all shrinkage and royalties, and are included in the table below:

Future revenues were estimated using an oil price forecast supplied by the lender which follows:

The reserve figures stated above use the standards set by The Petroleum Resources Management, which is accepted by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers. The definitions can be found at: www.spe.org/industry/docs/Petroleum-Resources-Management-System-2007.pdf 

Matt Lofgran, Nostra Terra's Chief Executive Officer, said:

"This year has started very positively and we are pleased to have such a large increase in asset value and facility borrowing base, using very conservative oil prices. This was also achieved without adding any of our new wells to the base. This expansion provides the Company with flexibility to execute its growth plans while accessing new opportunities.

Our immediate focus is on expanding our production base through the drilling of new wells within our existing areas of operations. To this end, we're making good progress with our drilling plans in the Permian Basin where we are not only planning to drill multiple wells this year, but also securing additional drilling locations for further growth. Finally, at the Fouke 2, which came in better than expected, a workover rig is on location to perforate, complete and place the well on production. I look forward to reporting on the results of this activity in a subsequent release."

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014

Competent Person Disclosure

John Stafford, a Director at Nostra Terra with over 35 years' relevant experience in the oil industry, has reviewed this announcement for the purposes of the current Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in June 2009. Mr. Stafford is a Fellow of the Geological

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Technical Glossary

Borrowing Base - the amount of money that a lender is willing to loan a company, based on the value of the collateral the company pledges

Future Net Income "FNI" - the projected Gross Revenues expected to be realized by the Company during such period less the sum of the Operating Costs payable.

Gross - total quantity or amount

HBP- Held by Production

Net - quantity or amount of Nostra Terra's interest

Net Present Value "NPV" - the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Proved Reserves - Proved Reserves are those quantities of petroleum, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations. If deterministic methods are used, the term reasonable certainty is intended to express a high degree of confidence that the quantities 10 will be recovered. If probabilistic methods are used, there should be at least a 90% probability that the quantities actually recovered will equal or exceed the estimate.