NOSTRA TERRA OIL & GAS COMPANY PLC
("Nostra Terra" or the "Company")
Transfer of Ukrainian Assets
18 February 2010
Nostra Terra Oil & Gas plc (AIM: NTOG) is pleased to announce that its wholly-
owned subsidiary, Nostra Terra Overseas Ltd ("NTOL"), has entered into a
contract with Crimea Nadra Invest (CNI) relating to its assets in Ukraine.
Under the terms of the contract, CNI will acquire all the rights and obligations
associated with the Joint Activity Agreement of 27 January 2001 (the "JAA")
covering NTOL's operations in Ukraine and in particular the Oktyabrskoe field
licence, while NTOL will retain a right to payment of 25 per cent of any net
profits generated by CNI from the JAA, which runs for a period of 25 years from
27 January 2001. The consideration for the transaction is to be settled by the
deferred payment from future oil sale proceeds of 360,000 Ukraine hryvnia
(approximately £29,000), which will be applied towards general working capital.
During the last nine months, Nostra Terra has successfully embarked on a new
strategic direction focused initially on the mature, low-cost oil producing
region of the US mid-continent, where it has already established early oil
production and continues to build its asset portfolio.
Matt Lofgran, CEO of Nostra Terra, said: "I believe this is a very positive deal
for Nostra Terra and our shareholders, as it provides us with the right to 25%
of any future net profits from the currently non-productive JAA, with no further
cost exposure.
"Our primary objective at this stage is to build a solid foundation within the
US mid-continent, on which to grow our oil and gas business sustainably and
selectively on an international scale. With its local expertise and
relationships, CNI is well positioned to unlock additional value from the
Oktyabrskoe licence, while we can now devote our management and financial
resources to achieving that primary objective of profitable growth."
CNI is based in Evpatoria, Crimea, and has other oil and gas interests in the
region.
Nostra Terra will retain its small representative office in Ukraine for the time
being in order to assist and monitor the joint venture.
The Company's 25 per cent interest in the Oktyabrskoe field licence was carried
at £153,000 in its last audited consolidated accounts. For the year ended 31
December 2008, the Company reported a gross loss of £115,000 on turnover of
£88,000 from its Ukrainian operations following unsuccessful exploration on the
Oktyabrskoe #10, #24 and #50 wells. Goodwill attributable to the Company's
acquisition of NTOL, stated at £3,268,000 as at 31 December 2008, will be
subject to impairment review in respect of the Company's 2009 financial year and
in light of NTOL's exit from the JAA.
For further information contact:
Nostra Terra Oil & Gas Company plc
Matt Lofgran, CEO Tel: +1 480 993 8933
mlofgran@ntog.co.uk
Blomfield Corporate Finance Ltd
Peter Trevelyan-Clark/Ben Jeynes Tel: +44 (0)20 7444 0800
Alexander David Securities Ltd
David Scott/Bill Sharp/Nick Bealer Tel: +44 (0)20 7448 9820
Announcements made by the Company are available automatically by email to those
who register at www.ntog.co.uk.
Notes to Editors:
Nostra Terra Oil & Gas Company plc (AIM: NTOG) is an emerging oil and gas
exploration and production company with assets in established producing regions
within the US mid-continent. The Company's US properties are all located in the
Central Kansas Uplift (CKU).
Hoffman
Nostra Terra holds a 25 per cent working interest in five production wells and
one salt water disposal well on the Hoffman lease, located in Barton County and
Russell County, Kansas and has a 50 per cent interest in an additional
undeveloped 160 acres nearby in the Trapp field.
Bloom
Nostra Terra holds a 50 per cent working interest in nine production wells and
two salt water disposal wells on the Bloom lease, located in Rice County,
Kansas.
Boxberger
Nostra Terra holds a 50 per cent working interest in eleven wells, including at
least two salt water disposal wells, on the Boxberger lease, located in Russell
County, Kansas.
Koelsch (option)
Nostra Terra also has an option to purchase a 50 per cent working interest in
two production wells and one salt water disposal well in the Koelsch lease,
located in Stafford County, Kansas.
Ukraine
Nostra Terra retains the right to a 25 per cent profit share in the onshore
Oktyabrskoe oil field in the Ukraine.
For more information please visit: www.ntog.co.uk
