Nostra Terra Funding The Future
Earlier this week there was an outcry from shareholders to hook up with the Nostra Terra CEO in order to clarify his decision to issue a placing. I’m a firm believer in reaching out to a company when there is a demand to, and while I share some investor frustrations I think we have to look at the company’s progress as well as investor requests. Over the past 12 months I have personally been asked to ask Matt why he is not taking bigger and more controlling working interests in assets, White Buffalo meets this criteria so in fairness to the CEO he has fulfilled that request
Lets not avoid the big news today which is the announcement of a £1.75m fund raise, Lots of shareholders refer to the UK Investor show where you suggested you were not looking to raise cash, can you tell me what’s changed as the loan facility with the TCB (Texas Capital Bank) seemed to put to bed fears of dilution?
Investors who speak to me in person at events, calls, etc. know that I’m not one to avoid talking about anything related to the company. We’ve stated we don’t need to raise cash to stay afloat and can grow from the new TCB facility. The extent we can borrow is based on production and cash flow. As new wells (around the portfolio) are added then the facility can increase. We’ll continue to use that to grow.
In the meantime however we were presented the opportunity for White Buffalo. This ticked all the boxes for us; geologically on multiple fronts, large in size and also importantly something we operate. This gives us more control over timing. The placing allows us the ability to accelerate our growth in a meaningful way. Considering the large potential benefit to the company.
I understand that White Buffalo has really got those with an analytical eye excited due to the size and nature of the asset. Can you help us understand better just how big a deal this is for NTOG in comparator to projects under management prior to White Buffalo?
With the current size our stake is approximately 20x bigger than our stake in Chisholm Trail (CT). It also has many other similarities with Chisholm Trail where we got in at a lower cost entry point and watched acreage increase more than 10x in less than 2 years. I’ve already pointed out a difference with us being operator. Another difference is that at the time the largest company involved in CT was $0.5B market cap. In White Buffalo we already shared that companies of $6B and $30B market cap are in the play. We were already excited about what we were doing, but it gets added to when you see them drilling the same target formation down the road from where you’ve driven a stake.
I notice you’re careful with your words such as “current size”. Sounds as if that can change?
Yes, we have landmen out right now.
You have heard lots about the valuation curve in Nostra and whilst folk may feel like the curve is going one way whilst the SP goes the other, can you tell us how you will get the two to run in line together?
Part will be based on building a wider understanding of what we have and are doing. Part will be based on results as we prove up assets. This can happen across the portfolio from Verde that continues to impress with a rework taking the well to higher levels than the original IP, to CT, the initial well in High Plains still in the offing, and of course White Buffalo and the Big Horn Basin.