Nostra Terra, an AIM-listed oil and gas producer, has entered into an agreement with Ward Petroleum to acquire a 20 per cent working interest in the Chisholm Trail Prospect in Oklahoma.
The acquisition was made to enhance the firm's portfolio of wells in areas where proven horizontal drilling and completion technologies are being applied to known reservoirs.
The area of mutual interest within the prospect covers an area of more than 1,420 acres, which includes an initial well that has already been permitted and a smaller working interest in four additional wells, in which Nostra's interest ranges from less than one to 10%.
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Nostra's total estimated cost of lease-hold activities is $0.3m and drilling for the first three wells is estimated to cost $0.72m, the significant majority of which is related to the 20% working interest well.
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The prospect includes shallow oil targets with associated liquids-rich natural gas and proven success of the horizontal drilling in the area.
Matt Lofgran, Chief Executive Officer of Nostra Terra, said: "Chisholm Trail is an exciting prospect. From the results of recent wells in the play these initial wells have the ability to be the largest producers in our growing portfolio, with a rapid payout, and an inventory of future potential locations. The first wells are already permitted and planned to drill this year thus increasing our activity level further from here."
The firm also gave an update on its other operations, including Bale Creek where two wells that were identified whilst drilling took place on the pre-planned second well have been tested and produced oil. The third is currently undergoing perforation and production testing.
At Warrior, the firm conducted a review of the results from the initial well, which is on production, which resulted in improvements in the design for a subsequent new well and a second production well is now in the planning process and will be drilled later this year or early in 2013.
Meanwhile, the operator of the Verde well has announced plans to drilled a second well on the prospect by the end of the year and said payout of the first well will be reached in nine months.
The share price fell 4.63% to 0.52p by 08:50.
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