Nostra Terra agrees 'clean exit' from Egypt concession
Oil and gas exploration and production company Nostra Terra announced on Tuesday that, further to its announcement on 12 August, its wholly-owned subsidiary Nostra Terra Incorporated (NTI) has reached a conditional agreement with regards to the East Ghazalat Concession in Egypt.
The AIM-traded firm said NTI and North Petroleum International Company, the operator of the Concession, had conditionally agreed that NTI would transfer its 50% participating interest in the concession to North, with provision for the conclusion of the arbitration and no further cash calls or liabilities for any past losses, including the amounts for the payment of November and December 2015 cash calls and interest, as it announced on 12 August.
Completion of the assignment remained conditional on the necessary formal governmental approvals.
If such conditions were not satisfied by 31 December, then North had the right to terminate the agreement, provided that the requisite termination notice was served on or before 30 April 2020.
The company said the agreement contained standard representations and warranties for an agreement of such nature.
“I am very pleased that NTI has reached this agreement with North, which sees Nostra Terra effect a clean exit from this non-core concession,” said chairman Matt Lofgran.
“Following the arbitration NTI had the option to pay past cash calls and continue with the asset.”
However, Lofgran said the company had taken the view that, because the asset was loss-making and given it was not the operator, despite the fact that it felt it could improve operations “significantly”, the best resolution was for NTI to transfer its interest and have no past or future liability.
“Nostra Terra is focused on the Permian Basin, and East Texas, where it operates and expects to grow through a combination of acquisitions and drilling of further wells.”
At 1437 GMT, shares in Nostra Terra were down 7.42% at 1.11p.