29 September 2021

Nostra Terra Oil and Gas Company Plc

("Nostra Terra" or "the Company")

$10 Million Senior Facility

and

Substantial Reserves Upgrade

Nostra Terra (AIM: NTOG), the oil & gas exploration and production company with a portfolio of development and production assets in Texas, USA, is pleased to announce both the renewal of its Senior Lending Facility ("Senior Facility" or "Facility") resulting in a significant increase in Facility size and available Borrowing Base and a substantial upgrade in Reserves.

Highlights

Senior Facility

·      Increased Facility size to $10,000,000 (from $5,000,000), a 100% increase

·      Increase Borrowing Base to $2,350,000 (from $1,550,000), a 52% increase

·      4.40% interest rate

·      Extend facility maturity further 3 years (from 29 Jan 2022 to 29 Jan 2025)

Reserves

·    $23,704,240 Future Net Income (total proved), a 58% increase from 2019 Year End (YE)

·    $10,549,420 NPV10 (total proved), a 49% increase from 2019 YE

·    1,994,240 gross barrels oil (973,180 net barrels oil) proven reserves, a 27% increase

Senior Facility

The Facility has an initial nominal amount of U$10,000,000, double the previous US$5,000,000. The Borrowing Base has been increased to US$2,350,000 based on improved production and cashflow during first half of 2021. The previous borrowing base was US$1,550,000, hence an additional US$800,000 is available for utilisation.

The size of the Facility and Borrowing Base will be reassessed at least twice yearly. The Board anticipates the Facility and Borrowing Base will increase as the Company's production and reserves increase.

The interest rate on drawn down borrowings from the Facility is determined by the higher of either the sum of the Wall Street Journal Rate plus 0.25% or a flat 4.40%. The current Wall Street Journal Rate is 3.25%. As such the current interest rate applied to use of the Facility is 4.40%

The Facility is not restricted to geographical region. Nostra Terra can deploy funds from the Facility for operational purposes and acquisitions in its current areas of operation in the USA, or in other areas, should the opportunity arise.

Reserves

Nostra Terra has updated its annual reserves ("Reserves"), using a third-party engineer APN Energy ("APN"), effective 1 September 2021. The reserves report was prepared by APN for the Company for submission to the Washington Federal Bank.

Assets included are as follows:

Probable or Possible reserves have not been included in this assessment. The Company's producing asset Caballos Creek in South Texas has not been included in the Reserves or Senior Facility but is intended to be added in the future.

Total net proved reserves increased by 27% over 2019 YE reserves (973,180 barrels oil versus 764,030 barrels oil). Total net proved developed producing reserves (PDP) increased by 29% over 2019 YE reserves (501,960 barrels oil versus 387,670 barrels oil). All reserve growth was funded from cashflow.

Net oil reserves are generated using decline curve analysis and applying bank pricing per table further below. Net total proved reserves have been estimated to be as follows:

Future net income is determined after deducting estimated future operating and development costs, production and ad valorem taxes, but before Federal income taxes.

Net incomes are defined as a portion of gross revenues attributable to Nostra Terra's interest after deducting all shrinkage and royalties, and are displayed in the table below:

Future revenues were estimated using forecast prices as follows:

The reserve figures stated above use the standards set by The Petroleum Resources Management, which is accepted by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers. The definitions can be found at: www.spe.org/industry/docs/Petroleum-Resources-Management-System-2007.pdf 

Matt Lofgran, Nostra Terra's Chief Executive Officer, said:

"We're very pleased to have increased the value of the US assets, upgrading reserves, and providing further growth opportunities ahead. For the remainder of the year our focus in the US is on growing production in lower risk areas, in which we're fully-funded.

We're also very pleased to have a substantial increase in both the facility size and borrowing base, along with a 3-year extension, in our Senior Facility. This exemplifies the value in our portfolio and operations and shows the alignment between us and the bank to be able to grow significantly with access to non-dilutive funds at such a great rate.

We look forward to updating shareholders on progress of plans, in the US and abroad, through the remainder of the year."

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014

Competent Person Disclosure

John Stafford, a Director at Nostra Terra with over 35 years' relevant experience in the oil industry, has reviewed this announcement for the purposes of the current Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in June 2009. Mr. Stafford is a Fellow of the Geological Society and a member of the Petroleum Exploration Society of Great Britain.

For further information, contact:

Technical Glossary

Borrowing Base - the amount of money that a lender is willing to loan a company, based on the value of the collateral the company pledges

Future Net Income "FNI" - the projected Gross Revenues expected to be realized by the Company during such period less the sum of the Operating Costs payable.

Gross - total quantity or amount

HBP- Held by Production

Net - quantity or amount of Nostra Terra's interest

Net Present Value "NPV" - the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Proved Reserves - Proved Reserves are those quantities of petroleum, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations. If deterministic methods are used, the term reasonable certainty is intended to express a high degree of confidence that the quantities 10 will be recovered. If probabilistic methods are used, there should be at least a 90% probability that the quantities actually recovered will equal or exceed the estimate.