Nostra Terra buoyed by Kansas oil discovery

Fiona Bond
30.10.09 10:17

Nostra Terra Oil & Gas Company (NTOG) became AIM's highest flyer on Friday morning, with its share price soaring almost 30% on the back of an oil discovery in the Boxberger Well in Kansas.

The oil and gas exploration company was buoyed by news that two newly discovered zones hold commercially viable oil. The positive results came hot on the heels of the company's earlier hydrocarbon discovery on the Boxberger property.

Nostra Terra will now swab two other zones in the well, known to have high oil saturations. Once completed, the A#5Well will be put into production within the next ten working days.

The Well is the company's initial project on the Boxberger property, where it currently owns an interest in 11 wells. Nostra Terra holds a 75% working interest before payout and 50% after payout, while Hewitt Petroleum holds the remaining interest in the Kansas development.

Matt Lofgran, chief executive of Nostra Terra, commented: "We are happy to have our first well coming into production and look forward to bringing on additional wells soon after."

The field where Boxberger is located is one of the largest in Kansas having produced almost 100 million barrels of oil in various zones since its discovery in 1926.

Once the A#5 Well is in production, Nostra Terra will waste no time starting work on Boxberger B#2 Well.

Eager traders, discussing events on Interactive Investor's Nostra Terra discussion board, welcomed the news.

count balou commented: "This is fantastic. These are experienced drillers who will know if flow rates are going to be able to do this. Also releasing news a bit at a time helps to sustain share price increase. All good news for us."

Cholo222 said: "It's looking very good for the imminent future and beyond and when Dow opens this will spike more," while kso1 was even more upbeat on the situation, remarking: "I'm ecstatic! Good news, good rise in share price, early profit takers and more share available to the market."

Nostra Terra made the decision earlier this year to focus on the US because of the low political and geological risk associated with it. The company had previously focused its efforts on the Ukrainian market but with the appointment of new chief executive Matt Lofgran, came a fresh approach for the company.

Despite the first six months of the year posing a challenge for the company, as investment in the development of oil and gas properties dried up, it also gave Nostra Terra the opportunity to acquire assets in areas that were considered too expensive in the past.

In addition to its Boxberger interest, the company now owns a 25% working interest in the Hoffman property, a 50% interest in the Bloom Field and an option for a 50% working interest in the Koelsch Field, all located in Kansas.

Nostra Terra's share price gained 0.40p to 1.77p.

Nostra Terra buoyed by Kansas oil discovery

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