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Nostra Terra and Anglo African report progress at key wells (NTOG, AAOG)

Today saw Nostra Terra Oil & Gas (LSE:NTOG) fall 0.4pc to 3.6p and Anglo African Oil & Gas (LSE:AAOG) dip 1pc to 9.5p as AIM investors delivered a lukewarm reception to both firms’ well updates.

Nostra announced that the G6 well it recently drilled at the Permian Basin in Texas has been completed and is expected to enter continuous production in the coming days. The business said that oil shows were already present at surface during the well’s completion process.

G6 is the first of two back-to-back wells scheduled by Nostra in the Permian Basin following the success of its Twin Well in the area, which was drilled last year shortly before being fast-tracked into production. Chief executive Matt Lofgran said:

We’ve already upgraded the tank battery to facilitate the G6 well, and plan to put it into immediate production and pay status, similar to that done on the Twin Well. Our focus for the remainder of 2018 is to continue growing production and reserves in a meaningful way.’

Meanwhile, Anglo African reported that it would need to install a pump at TLP-102, the well it is working over at its Tilapia licence in the Republic of the Congo. Upon opening the well earlier this month to bring it online, the organisation found that heavy water was blocking the tubing, leading to an absence of gas. Despite this, Anglo African’s reservoir engineers still expect a minimum flow rate of 120bopd following pump installation.

The business also reported that Ocean Transport, the company responsible for delivering the rig for drilling its TLP-103 well, will now arrive in the Congo on 4 July, later than anticipated. Anglo African’s work at Tilapia received a significant boost earlier this month when shareholders unanimously approved a £7.4m placing to fund the cost of drilling TLP-103, where the firm owns a 56pc stake. TLP-103 will target producing reservoirs containing 2m barrels of oil and an 8.1m barrel gross contingent resource discovery.

With many investors fearing a shareholder revolt around the placing, shares have risen consistently since its approval. Despite today’s dip, Anglo African has climbed considerably from the 8.6p it sat at ahead of the vote. Executive chairman David Sefton said:

‘We are very pleased that the workover of TLP-102 continues to be successful, and in particular that, when brought into production, it will make a material contribution to the financial position of the company.  In respect of TLP-103, the late arrival of the Kota Bakat is frustrating, but the shipping is still imminent, and I look forward to providing a full update on the mobilisation process and schedule once the transport arrives in Port Gentil.’

Author: Daniel Flynn

Disclosure: The Author does not own shares in either of the companies mentioned above

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