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Nostra Terra Oil and Gas Company

  • BY: Andrew Hore |
  • POSTED: 18/09/2014 |

Nostra Terra Oil and Gas Company has reported improved production from the workover of a well on the Verde prospect and plans the reworking of another well.

Nostra owns a 16.25% working interest in the well and its average production rate increased from 64 barrels of oil per day to 83.4 barrels of oil per day. However, the recent acquisition of the White Buffalo prospect will be even more important to the company.

Nostra Terra acquired the 100% working interest in the White Buffalo prospect in the Big Horn basin of Wyoming from Ward Petroleum for $1.2m. There are up to 20 potential targets over 6,100 acres, including one target in the Phosporia Formation, which has a history of production over nearly a century. There are 450 individual leases with an average remaining term of 4.5 years with options to extend.

Northland has published a research note on Nostra Terra. Northland believes that the company could generate £571,000 from operations in 2015.

Northland believes that the company’s interest in White Buffalo is around 20 times the size of Nostra’s interest in the Chisholm Trail prospect. SM Energy is expected to report drilling results from the Big Horn basin area in the next few weeks.

Northland calculates a base case valuation of 0.45p a share, including the White Buffalo prospect. The previous base case forecast was 0.33p a share so this shows how important White Buffalo could be to the company. The high case suggests that White Buffalo alone could be worth 0.46p a share.

At 0.37p a share, Nostra Terra is valued at £10.3m.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFSeptember2014_60.pdf

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