For the life of me I can’t help thinking that genuine private investors are few and far between when it comes to understanding Nostra Terra Oil & Gas. The case for investing rather than day-trading is compelling. Yet it’s a stock that wildly fluctuates due to the fact that it’s beset with traders who pile in and out en masse. Traders are ephemeral . Here today gone today. Investing requires a certain amount of steely nerve.
The salient facts. NTOG has announced production from 6 wells in CT. (Chisholm Trail) NTOG has announced participation in 7 more wells in CT in addition to that of which 1 well is on hold, 3 are in the election/permitting process while 1 has spud, 1 has been fracced and 1 is now on production while we await the flow rates. There’s also one well that isn’t included in the seven wells that is destined to be NTOG’s largest working interest in Chisholm Trail. It’s in excess of 12.58% It will be the largest they currently have. What we do know is that it will be their biggest working interest to date.
The fact that ALL of the CT wells have been a resounding success should point you to the logical conclusion that this isn’t about finding the oil. It is already there! It’s about increasing production. Nostra Terra should double production over the next 12 weeks. Ergo their sp is set to rise.
One only has to look at what the company are telling us to realise that there will be positive news flow aplenty over the next few weeks and months. The kind we like the most, increasing production. Now don’t forget that Nostra are now cash flow positive, debt free, have cash in hand and have access to increasing funds from the new facility should they choose to use it as and when production increases. I’m not a fan of company’s taking on debt but if as Lofgran states this is the answer to growing production, cash and the sp then I’ll accept it. As I said to @BenchpressMike on twitter this week “some times you have to roll with it.”
NTOG’s last quarterly operations update showed a net production of 60 boepd. While that amount is low so is the market cap. I can exclusively reveal today that the company production had breached 100boepd before the decline rate stabilised. Every well in CT has been a winner with no reason to think it won’t continue. This is why Lofgran has managed to convince a USA Bank to agree to a $25,000,000 credit facility. Texas Capital Bank must have performed due diligence on NTOG/ASSETS. They must have liked the numbers that their engineers/analysts came back with. Only a confirmed assessment of the potential would have sealed the deal, hence they got the facility. The numbers stacked up. If it’s good enough for the Texas Bank it’s good enough for me.
I grilled the NTOG CEO on the day of the $25 million facility announcement. After a heated argument about bopd numbers and where will we be in 6 months I asked him; this QUESTION. “The $25m credit facility with Texas Capital Bank, what information did the bank see that assured them that they could give this facility with such a favourable rate of 4.25%”? ANSWER; “The large size of the facility and the good rate comes down to one thing – management’s ability to perform. This factors in not just our existing portfolio (scrutinized by engineers), but our ability to keep overheads low while having an exciting growth strategy.” This should tell you all you need to know. The Banks’ very own forecast is that production will rise. Buy in now & hold. Production is rising. News is on the way.