Nostra Terra starts proceedings against Richfield

Nostra Terra Oil and Gas, has commenced foreclosure proceedings against Richfield Oil & Gas Company, formerly Hewitt Petroleum, after Richfield failed to repay any of a loan agreed on April 14th, 2011.

Under the agreement, a $1.3m secured loan note, which has been accruing interest at 10% per annum from the date of issue, was due to be redeemed at the end of 2011. On January 6th 2012, Nostra granted Richfield an extension on the repayment date to January 31st 2012.

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"As part of the extension granted to Richfield, the company obtained agreement on several issues that will expedite an efficient end to this matter in the event of a default. Specifically, Richfield agreed to waive all rights under the foreclosure process and also completed the change of operator forms which have been delivered to the company as a result of Richfield's January 31 default. Consequently, we have the necessary documentation to qualify as operator of the producing leases. Net cash flow from the leases will offset ongoing interest expenses accruing on the Loan Note during the foreclosure process."