Nostra Terra, the AIM quoted oil and gas producer, said it had signed an agreement with the operators at its Verde prospect in Colorado to drill a second development well.
The second well is currently being permitted, the firm said, with drilling expected to begin around the end of September.
The Verde Prospect, in which Nostra Terra has a 16.25% interest, is operated by Plainsmen Partners.
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"I'm delighted by the performance of our first Verde discovery well which exceeded our initial expectations, producing just over $1m gross in nine months," said Nostra's Chief Executive Matt Lofgran.
"This should add to our growing portfolio of producing wells," he added.
The firm's shares rose 7% as investors were cheered by the news.
Nostra said its full year revenues of £244,000, announced in May, were expected to strongly improve in 2012.
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