Nostra Terra, the international oil & gas exploration and production company with a portfolio of production and development assets in Texas, USA, is pleased to announce that the Fouke #2 well (NTOG 32.5% WI) has reached payback (recovery of all drilling and drilling-related costs from net cashflow) less than 3 months from production start-up. This is considerably ahead of pre-drill expectations due to a combination of higher realised oil prices and a production rate that is 70% greater than originally forecast.
The production rate at the Fouke #2 remains at 140 bopd, experiencing no decline since start-up and is 100% oil. The Fouke #1 is also producing 100% dry oil at a rate of 110 bopd, which is the maximum supported by the current surface production equipment. These production rates will be maintained so that the operator can collect technical data to support its request for an increased "field allowable rate", a maximum recovery rate applicable to the longer term. A hearing with the relevant authority on changing the field allowable rate, currently 82 bopd, has been requested but not yet scheduled.
The Company has completed additional technical work in the farmout area, using information obtained from the Fouke #1 and #2 wells. Based upon the results of this analysis the Company has initiated discussions with the Fouke operator on a 3rd well in the farmout area. These technical discussions are on-going and will continue until the results of the field allowable rate hearing are known, after which a decision on the 3rd well will be made.
The Company has also commenced a 5 well work-over program in the Pine Mills oilfield, focused on returning to production several wells that had been shut in due to mechanical issues. Finally, the Company has also completed a technical study on optimising water handling in the field and plans to implement the report recommendations as part of the work-over program to further increase production in the Pine Mills oilfield.
Matt Lofgran , Nostra Terra's Chief Executive Officer, said:
"Both the Fouke #1 and Fouke #2 wells have been very strong producers, adding significant cashflow to the Company. These results highlight some of the opportunities that exist in the Pine Mills Field. Nostra Terra whilst having a WI of 32.5% at the Fouke wells, owns a 100% working interest in 2,320 acres and continues to develop additional opportunities to grow production from this field.
Additionally, planning, and technical work continues on our West Texas asset to select a location for our next drilling opportunity. Long lead items are being ordered and drilling contractors contacted to firm up the timing of the next well in this area. All current growth initiatives in our portfolio are anticipated to be funded internally, without need for dilution.
It's been a great year for the Company so far with a strong increase in cash flows and production rates and I am looking forward to reporting on the results of our current activities in future periods."