Nostra Terra Acquires the Caballos Creek Oil Field in South Texas
London-based Nostra Terra Oil & Gas Company Plc has entered into an agreement with Oro Resources LLC and a subsidiary to acquire a 100% working interest and operatorship in the producing Caballos Creek oil field in South Texas, in exchange for a total cash consideration of US$425,000.
The Caballos Creek oil field covers a total area of approximately 745 acres in Atascosa County, and primarily targets the Miocene Hockley, Navarro, and Olmos formations. The acreage is held by production, and includes five producing wells, two injectors, one shut-in producer and associated infrastructure, as well as additional development opportunities.
AIM-listed Nostra Terra is an independent E&P company currently focused on low-risk exploration and developmental drilling in the Permian Basin of west Texas, and in east Texas. Oro Resources is a privately held E&P company with interests in oil and natural gas properties in south-east Texas.
Nostra Terra stated that it expects a payback period of less than two years based on current production rate and oil prices of US$40 per barrel (bbl). The field holds total proved (1P) reserves of approximately 69.3 thousand bbls of oil as of June 30th, 2020. Current production associated with the field was 22 bbls of oil per day.
“Considerable effort has taken place since to identify assets that make money in a low oil price environment, and to which we could add to our portfolio on good terms while being cautious about dilution,” said Nostra Terra’s CEO Matt Lofgran.
“We’re acquiring low risk, producing assets, with average life over 20 years, immediately adding net cash flow to the company, all with non-dilutive financing,” he added.
The transaction is subject to customary closing conditions, including the receipt of necessary regulatory approvals, and is expected to close during September.