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AUDIO: Nostra’s Matt Lofgran talks huge potential of horizontal drilling in exclusive VTM podcast

In this, the first episode of the ValueTheMarkets podcast, we speak with Matt Lofgran, CEO of Nostra Terra Oil and Gas (LSE:NTOG) about the huge potential of horizontal drilling.

Nostra Terra is primarily a US focussed oil producer and explorer which has recently been turning its attention to horizontal drilling in the Permian Basin. The company released big news earlier this week in the form of an engineered economics report for its Mesquite asset in the Permian. Trey Resources, who was commissioned to produce the report, has extensive experience in horizontal drilling in the Permian region and estimate Nostra’s Mesquite asset has a Net Present Value (NPV10) of $21.6m at current oil prices.

In the interview, Matt explains the difference between horizontal and vertical drilling and the economic benefits of the former. Advances in technology have given new leases of life to fields that have previously been drilled vertically and with Mesquite, Nostra has managed to secure a field with very strong upside potential relative to the original cost of the field.

He also highlights that Nostra is the first operator in the area to pursue a horizontal drilling program giving it first mover advantage. The company has said it is ready to discuss the possibility of a farm-in with potential partners. Its recent activities in the area have already attracted considerable interest with Nostra having received four unsolicited approaches prior to the release of the engineered economics report.

Matt suggests Nostra is aiming to kick things off with the drilling of two wells in 2019.

 

Author: Stuart Langelaan

Disclosure: The author owns shares in the company mentioned above

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