NTOG Enters a Strategic Partnership for Production Growth Opportunities in East Texas.

Source Company Press Release
Company Nostra Terra Oil & Gas Company PLC, Cypress
Tags Country: United States, M&A: Deals, Upstream: Upstream News
Date January 16, 2024

Nostra Terra (AIM: NTOG), the international oil & gas exploration and production company with a portfolio of development and production assets in Texas, USA, is pleased to announce, further to its announcement on 11 January 2024, the signing of a Strategic Partnership with a subsidiary of Cypress. The Partnership will allow the two companies to use an extensive, modern, regional 3D Seismic data set to jointly develop production growth opportunities across an expansive area of East Texas where the Companies have already experienced great results.

Highlights:

·    Partnership Area includes 80,000 acres (324 km2) of modern 3D seismic

·    Area is more than 30x larger than Pine Mills and includes multiple counties in East Texas

·    NTOG will operate any new locations and have an 87.5% working interest

·    Initial focus will be the sub-Clarksville horizon, successfully developed in the Fouke wells

·    All regional producing horizons are included in the agreement (in addition to the initial target)

On 22 April 2020, Nostra Terra entered into a farmout agreement with Cypress Minerals for an 80-acre portion (the "Well Area") of Nostra Terra's 2,400-acre holding at Pine Mills.  Cypress Minerals LLC and  Cypress Production Inc (together "Cypress") had acquired 3D seismic covering the Well Area and identified several potential well locations. Following this,  Cypress drilled the two successful "Fouke" wells in the Pine Mills field.

These wells have produced over 130,000 barrels of oil (100% oil, no water) and continue to produce at strong rates. The Fouke 1 well reached payback rapidly while on a restricted allowable production rate, due to field rules in place at the time of discovery. After a successful petition by the operator to increase the field allowable rate, the Fouke 2 well reached payback less than three months from production start-up.  These well results have provided superior returns for the Company and have been the subject of detailed technical study since their completion.

As a result of these efforts, Nostra Terra and Cypress have entered into a broad strategic partnership whereby the companies will work together using this 3D seismic data set to identify additional Fouke-like drilling locations. This partnership is regional in scope and will cover the entire 80,000 acres of existing 3D seismic data that  Cypress has acquired. This represents an area more than 30 times the size of Nostra Terra's 2,400-acre Pine Mills oilfield. Additionally, any locations developed through this partnership will be operated by Nostra Terra with a minimum of an 87.5% working interest.  This is a significant increase to the 32.5% working interest the Company retained in the original Fouke wells. The Company will be responsible for the cost and operations while  Cypress will be carried in the initial three wells along with a small override.

The initial target of the exercise will be the sub-Clarksville horizon found in the Fouke wells, but the technical focus will not be limited to this horizon alone.  The entire Woodbine sequence and several others that have been found productive within this vast 80,000-acre area have been included in this partnership.

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

"I'm very pleased to announce signing this agreement with our partners at Cypress.  The success of the Fouke wells in our mature Pine Mills asset has been the focus of our technical efforts over the last several years.  This work demonstrated that with the benefit of modern 3D seismic, the abundance of existing well information and very detailed geologic mapping work, prospects can be generated with the potential for Fouke-like results across an extensive area.  Undrilled fault blocks, like Fouke, can now be identified, profitably developed and put into production in short time frames, given their locations in and around these mature assets. The area's future potential may exceed its past performance based on the work done to date.  This is an exciting time for the Company and I look forward to reporting on our results in subsequent periods."

Source: EvaluateEnergy® ©2024 EvaluateEnergy Ltd