Nostra Terra Oil & Gas Company takes a 50% stake as it commits Mosman Oil & Gas Ltd to acquire the Pine Mills oil field

An AIM company’s stocks rise 50% and look forward to production growth. Another drops 35%, calls his lawyers and thinks about what could have been.

() Shares rose more than 50% on Tuesday as AIM colleague Mosman Oil & Gas Ltd () appeared to buy a producing oil field in Texas.

The Pine Mills oil field is possibly approximately 100 miles from Dallas. Still, the asset’s acquisition seems fit for a soap opera.

In early November, Mosman announced that he had agreed to acquire an 80% interest in the Pine Mills field through the acquisition of Buccaneer Operating LLC, the operating subsidiary responsible for the asset, for $ 975,000.

At that point, however, it cautioned of litigation between and Hammerhead Managing Partners regarding the other 20% of Pine Mills and was further complicated by the existence of a subscription right that gave an option to an alternative sale of the project.

This is where Nostra Terra comes in.

Nostra Terra announced this morning a separate agreement with GFP Texas Inc, a subsidiary of Gale Force Petroleum, which has pre-purchased the asset.

GFP Texas, in turn, sold the asset to Nostra Terra for $ 1.025 million.

The effective date of the transaction is November 1st, so Nostra Terra says it is now the operator of the Pine Mills field.

In a statement, Mosman said he had referred the matter to his lawyers, who are currently reviewing the contractual validity of what the company calls “alleged right of first refusal”.

Pine Mills Oil Field

The capital at the center of this somewhat intricate story is an old oil field that currently produces 100 barrels of oil a day.

Pine Mills, an 11-acre property, has produced 12.3 million barrels of oil since it began operating in the 1950s. Water injection and electronic pumps had helped increase production since 2007.

The operation comprises 15 active wells, five oil storage tanks, four currently closed wells suitable for reactivation and a service facility.

Nostra Terra highlighted this morning that Pine Mills is profitable to operate below $ 30 a barrel.

It is also noted that there are currently 373,000 barrels of proven reserves in shallow, high-porosity conventional reservoirs.

The company added that it sees the potential to increase production to 150 bopd in the near future – by accessing pay that is currently “behind the pipe” as well as reactivating existing wells and new infill wells.

Nostra may indicate further upside potential on deeper exploration targets as well as the development of heavy fuel oil resources on the property.

It was also highlighted that Cue Resources recently paid to modernize all of Pine Mills’ infrastructure, including “well rehabilitation.”

Matt Lofgran, CEO of Nostra, said, “The Pine Mills project is a perfect fit with Nostra Terra’s strategy.”

“Our goal was to acquire assets that we operate and in which we control the pace of development. Pine Mills meets both of the key criteria. With Pine Mills profitable under $ 30 a barrel, the project will help solidify our business model as we continue to grow the business. “

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