Permian Basin - C8 Operations Update
Nostra Terra (AIM:NTOG), the oil and gas exploration and production company with a portfolio of assets in the USA and Egypt, announces that it has shut down operations at the C8 Well ("C8"), having unexpectedly encountered a high pressure inflow of salt water at approximately 2,195 ft.
Nostra Terra decided to shut down drilling operations at the C8 Well after the drilling team encountered an unexpected high-pressure inflow of salt water at approximately 2,195 ft, several hundred feet above the main target reservoir. The C8 well was then shut in for safety reasons as NTOG's primary concern remains protection of the environment and our people. A cement plug is being set to permanently and safely abandon the well.
Nostra Terra will use the data gathered from the C8 drilling operation and apply this when planning future wells on this lease area. The Clearfork and San Andres are currently producing formations in neighboring wells on this lease and remain the Company's targets for future drilling operations on this lease.
Nostra Terra quickly took the decision to shut down drilling of the C8 Well before the bulk of the drilling and completion funds would need to be spent, thus minimizing exposure. Thanks to this, the Company has saved the majority of its budget for the drilling of C8, which can now be put towards drilling a subsequent well in the near future.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
Matt Lofgran, Chief Executive Officer of Nostra Terra, commented:
"Drilling operations were running smoothly including oil shows in the initial targeted formation. However, once the surge was encountered the group quickly made the decision to shut down operations for the safety of the drilling team and to limit financial exposure in order to allocate funds to other future wells.
Although this isn't the result we were hoping for, the oil field isn't without risks. We plan for this by having a larger and carefully balanced portfolio. Our exposure is only approximately 3% of our current market capitalization.
Nostra Terra's balance sheet remains strong and we continue to be cash flow positive at the Plc level, while still growing our production and reserves."