Nostra Terra Oil: Austin Chalk Well Oil, Gas Sufficient To Pay Costs

2nd Aug 2010 08:17

LONDON (Dow Jones)--Nostra Terra Oil and Gas Company PLC (NTOG.LN), said Monday that the redeveloped Austin Chalk well located in Texas, has produced sufficient oil and gas to pay back its redevelopment costs. MAIN FACTS: -This was achieved after 35 days of production, and Nostra Terra is due to receive its initial revenue payment in mid-August. -The redevelopment work involved drilling a new horizontal section, extending some 1900 feet from the original vertical wellbore. -Positive indications of producibility were encountered within days of re-entry, and the well was placed on production on 5 June. -While Austin Chalk wells are characterized by relatively steep decline curves before stabilizing at significantly lower production volumes, the initial flow rate from the new section exceeded expectations at just under 1000 barrels of oil per day or bopd and 800,000 cubic feet of natural gas or mcfd. -The flow rate has subsequently followed the anticipated decline curve, but the well remains free flowing and not yet requiring artificial lift. -As a result, the total redevelopment costs of $890,000, including Nostra Terra's share, have already been fully recovered. -The well is expected to remain profitable, albeit at lower production volumes, for several years. -In addition, there is a possibility of drilling a second horizontal section into the lower "A Zone" of the formation. -Shares closed Friday at 0.480 pence, valuing the company at GBP7.43 million. -By Razak Musah Baba, Dow Jones Newswires; 44-20-7842-9275; [email protected] (END) Dow Jones Newswires August 02, 2010 03:17 ET (07:17 GMT)