Norstra Terra today confirmed it has made its third acquisition in the the Permian Basin.
The oil and gas exploration and production company, which has a portfolio of assets in the USA and Egypt, revealed the takeover includes a target which was previously drilled and produced oil.
Nostra Terra spent $40,000 on a 53.2% working interest over a 120 acre lease. The area has three drill ready locations.
The company plans to drill on twin well on the newly acquired interest, targeting previously successful well “mistakenly drilled by offset operator, resulting in 350 barrels produced in less than three days”.
Chief executive Matt Lofgran said the buy was an unmissable opportunity.
He added: “We are particularly excited about the potential of the planned Twin Well. The operator of a neighbouring lease drilled a discovery well, which crossed the boundary into the lease area of our new working interest. On realizing this, the well had to be plugged and abandoned in accordance with process, but the neighbouring operator has shared its data. As such this presents Nostra Terra with an immediate drill target of a proven prior producing well.
“This was an opportunity that we didn’t want to pass up, given the fit in the portfolio and especially the discovery on the lease. The Board is in full agreement about the value in the acquisition and its fit in our portfolio of leases. I’m very happy to have such strong support from my fellow Directors. Assuming we secure it, we anticipate using the Senior Lending Facility to repay the loan along with drilling additional wells. Shareholders can expect to see more news flow, as we expand our footprint in the Permian Basin acquiring new leases and building production.
“We look forward to providing updates about operations at the Twin Well in the coming weeks.”
The company insisted the acquisition represents “excellent value” to the company. The profile of the wells indicates approximately 35,000 barrels of oil, generating an estimated Return on Investment of 2:1 at $40/barrel oil.