Nostra Terra Oil and Gas announce Increase in borrowing base
Nostra Terra, the AIM quoted oil and gas producer with a growing portfolio of producing assets in the USA, is pleased to announce that, in line with its increase in production, there has been a 120% increase in the borrowing base on its US$25m Credit Facility (the “Facility”) to US$1,100,000. In addition, the Company also announces the collection of US$231,000 from Richfield Oil and Gas Company (“Richfield”).
The Company announced on 3 February 2014 that it was entitled to drawdown US$0.5m of the Facility but that it expected that the reworking of CT3 and the stabilisation of rates at the newer Chisholm Trail wells would allow for an increase in the borrowing base at the next review period after six months. The Company is therefore pleased to report that stabilised production from its portfolio in Oklahoma, Kansas and Colorado has enabled it to increase the borrowing base much earlier than originally anticipated.
The redetermination has been approved by Texas Capital Bank and the borrowing base has been immediately increased from US$500,000 to US$1,100,000.
Nostra Terra is also pleased to announce that it has received US$231,000 from Richfield, being the final amount owed to it following the settlement of its legal dispute with the company. This amount comprises the costs incurred by Nostra Terra of US$210,000, as announced on 19 December 2013, plus further interest and the cost of collection.
Nostra Terra will use the increased funds available to expand its portfolio further.
Matt Lofgran, Chief Executive Officer of Nostra Terra, commented:
“The increase in the Facility and the collection from Richfield gives us an additional US$831,000 to be used in the field to continue growing our portfolio.
I’d like to add that the increase in the Facility’s borrowing base doesn’t take into account the newest wells in our portfolio where Nostra Terra has an 11% and 20% working interest. Once those wells have stabilised production we anticipate a significant increase in production and subsequently a further increase in the borrowing base. This should help demonstrate the ability for the Company to grow its production and cash flow without the need for dilution to shareholders.”
Alden McCall, Chief Operating Officer of Nostra Terra, added:
“The original facility agreement called for a redetermination of the borrowing base at least semi-annually. We were optimistic that we would increase the base in less time and that has proven to be the case. Thanks to the continued success at Chisholm Trail and elsewhere, Texas Capital Bank granted our first redetermination less than three months after the Facility was put in place.”
Source: Nostra Terra