Nostra Terra Oil & Gas

Our Purpose

Nostra Terra Oil and Gas is focused on achieving profitable, rapid and sustainable growth within the US upstream industry. Our goal is to consistently generate above-average returns for our shareholders by acquiring and managing a growing portfolio of both new and mature oil and gas assets, to which we can add significant value through innovative technology and commercial expertise.

Our Strategy

Nostra Terra intends to achieve its growth objectives by applying the most advanced drilling and production technologies within historic hydrocarbon-rich basins in order to access "new oil from old fields".

We believe this is an extremely attractive growth strategy for an emerging oil and gas company for several key reasons:

• Risk: In global terms, onshore US is a politically and geologically low-risk area. It is also relatively low-cost, with readily available services and abundant infrastructure in place so that wells can be reworked and brought back into production inexpensively and quickly. This enables early income generation, while ongoing operating costs can and will be kept to a minimum.
• Reward: The probability of achieving healthy cash flow and rapid payback - which in turn allows for ongoing investment in additional growth projects - is much higher in these mature hydrocarbon basins than it is in remote exploratory plays elsewhere in the world.
• Potential: The scope for sustained profitable growth in these established producing areas is virtually unlimited. Just to give one example: the Central Kansas Uplift (CKU), in which Nostra Terra's Bloom Property is located, has yielded more than 6 billion barrels of oil. Today, production from the CKU is less than a third of what it was 50 years ago – yet the Kansas Geological Survey estimates that 60 per cent of the region's recoverable reserves remain untapped.
• Innovative technology: Many of the oil industry's most significant technological innovations, developed throughout the Barnett Shale phenomenon, are now being successfully applied within these historic producing areas. Horizontal drilling, for example, accounted for less than 10% of wells drilled in the US eight years ago, but now accounts for more than half of all US drilling activity.

Kansas

In July 2009, Nostra Terra acquired a 50% working interest in three leases, nine previously produced but inactive wells and two inactive salt water disposal wells in the Bloom Property, located within the Chase-Silica Field in Rice County, Kansas. Three Bloom wells have so far been brought back into production, and are currently producing approximately 20 barrels of oil per day.

In May 2011, the company took full ownership of Bloom and will assume operatorship of the property through its wholly owned subsidiary, Churchill Operating LLC. Nostra Terra believes there is scope to improve the productivity and profitability of Bloom significantly.

Texas

The company made its first small but very encouraging step into Texas in 2010 when it acquired a 2% interest in the redevelopment of an existing well. This entailed the drilling of a new section extending almost 2,000 feet horizontally from the original vertical wellbore into the Austin Chalk formation. 

Austin Chalk wells characteristically flow at high initial rates followed by steep decline curves before stabilising, and this well is no exception. Nevertheless, the total redevelopment costs of $890,000, including Nostra Terra's share, were fully recovered in just 35 days, and the well produced sufficient oil and gas to exceed twice payout of its original cost in less than a year. There is also the possibility of drilling a second horizontal section into a lower zone within the producing formation at a later date.

At the beginning of 2011, Nostra Terra acquired a 1% working interest in a second Texas project – the Vintage Hills Prospect Unit, located within the large Giddings Field in Texas.

During the initial three-day test period, the well flowed at rates ranging between 402 and 139 barrels of oil equivalent per day, and to date it has produced approximately 1,800 barrels of oil and 3,600 barrels of oil equivalent in natural gas.

Shortly after acquiring our interest in Vintage Hills, we entered into a second agreement with New Century Exploration, Inc., to acquire a 3% working interest in the Nesbitt Prospect Unit, located in the Woodlawn Field in Texas.

The first of potentially three wells planned within the Nesbitt Unit was spudded in March 2011 and was drilled vertically to a depth of approximately 7,000 feet followed by a horizontal section of just under 3,000 feet. Significant hydrocarbon shows were encountered in the target formation during drilling. Additional downhole work has still to be carried out before the well can be completed and fully tested.

Colorado

In June 2011, Nostra Terra added to its exploration portfolio and further diversified its operational relationships by entering into an agreement with Plainsmen Partners, LLC to acquire a 16.25% working interest in the Verde Prospect, located in south-eastern Colorado. The leases cover approximately 636 net acres in which an initial test well will be drilled during the third quarter of 2011 into the Mississippian formation to a projected total depth of 5,300 feet.

Interpretation of newly acquired 3D seismic data supports the subsurface mapping of a structural high being 25 to 50 feet up-dip to historical production from the Lower Morrow Keyes. Should the initial test well prove successful, two to three further development wells could be drilled:

• Lower Morrow/Keyes target
• Mississippian target
• Marmaton target

Oklahoma

Also in June 2011, the company further advanced its strategy of securing larger working interests in emerging plays when it signed an agreement with Pathfinder Development Capital, LLC to acquire a 30% working interest in the Bale Creek Prospect, located in northern Oklahoma.

The Bale Creek Area of Mutual Interest (AMI) covers a contiguous area of over 3,500 acres. It is located within a very prolific oil system of multi-pay potential from as many as eight stacked reservoirs, from the Ordovician up to the shallower Permian formations.

The project development plan consists of two phases. The first step in Phase 1 involves acquisition and interpretation of new 2D and 3D seismic data. Based on the tightly-controlled interpretation, a pilot hole will be drilled and logged to determine the most promising of all the potential productive zones. The next step will be to drill three horizontal wells into the selected zone and to install the necessary production and transmission facilities. Permitting and leasing activities for Phase 1 are currently under way, and drilling of the first well is scheduled to start in the fourth quarter of 2011.

Phase 2 of the Bale Creek project will include up to four more horizontal wells plus additional production and transmission facilities. Nostra Terra and Pathfinder expect to be in a position to make the final determination on Phase 2 in the first half of 2012.

Sir Adrian Blennerhassett, Non-executive Chairman 

Sir Adrian (69) holds an MSc in Geology from Imperial College, London and an MBA from Cranfield School of Business Management. His previous positions include General Manager for Claremount Oil & Gas Ltd and Technical Director at Peninsula Petroleum Ltd. More recently, he has had 11 years' experience in corporate finance, including mergers and acquisitions, with Anglo European Amalgamations Limited and Chesham Amalgamations and Investments Limited.

Matt Lofgran, Chief Executive Officer

Matt Lofgran (34) has wide experience of business development in the energy, real estate and communications sectors. Prior to becoming CEO of Nostra Terra in June 2009, he was with Robson Energy, LLC, latterly as Vice President of International Business Development. In this capacity, he launched the oil and gas, field services and coal divisions, and was responsible for extending Robson Energy's activities into Mexico. Mr Lofgran holds a Bachelor of Business Management degree from the University of Phoenix, and a Global MBA from Thunderbird School of Global Management.

Alden McCall, Chief Operating Officer

Alden McCall (59) has more than 25 years' experience of project management, business development, capital acquisition and consulting in oil and gas exploration and production. Prior to joining Nostra Terra, he was Principal and General Manager of Dallas-based AMX Consulting Services, LLC, delivering technical and commercial expertise to both public and private companies engaged in conventional and unconventional petroleum exploration and production. He is a Certified Petroleum Geologist and a member of the American Association of Petroleum Geologists, the Society of Petroleum Engineers, the Oklahoma Geological Society and the Houston Geological Society. Mr McCall has previously held senior exploration positions at a number of US-based independent oil and gas companies, leading or coordinating exploration programs in Texas, Oklahoma, Kansas, Alaska and California, and also in Denmark, France and Australia. He has a BSc in Biology from Texas Christian University, an MSc in Geology from University of Texas, and an MBA from Thunderbird School of Global Management.

Stephen Oakes, Non-executive Director

Stephen Oakes (54) has over 30 years' experience in financial markets and is a Fellow of the Securities Institute. He began his career with stockbrokers Vickers da Costa Ltd, becoming a member of the London Stock Exchange in 1984 before joining James Capel & Co (now HSBC Investment Bank) as a portfolio manager. Increasing management responsibility culminated in his appointment as Chief Executive Officer, HSBC Investment Management, initially for international business and subsequently as acting CEO of the combined UK and international operations. In 2003 he joined Alfred Henry Corporate Finance Limited. He is currently a director of Alltrue Investments plc.

aim securities not in public hands

As at 19 July 2011, 45.1% of the company’s issued ordinary shares were not in public hands.

significant shareholders

Updated from Nostra Terra website 19.03.2012