Nostra Terra Oil and Gas : Completed acquisition of 80% Working Interest

29 November 2016

Nostra Terra Oil and Gas Company plc

('Nostra Terra' or the 'Company')

Completed acquisition of 80% Working Interest in Pine Mills oil field

Nostra Terra (AIM:NTOG), the oil and gas exploration and production company with a portfolio of assets in the USA and Egypt, is pleased to announce the acquisition of an 80% Working Interest in certain oil and gas interests comprising the Pine Mills oil field ('Pine Mills') and associated assets in Wood County, Texas ('the Acquisition'), which completed today. Nostra Terra purchased the assets from GFP Texas Inc. ('GFP Texas'), which has exercised its pre-emption rights following the proposed sale of Pine Mills by its previous owner and operator, Cue Resources LLV ('Cue Resources'). In consideration for the purchase, Nostra Terra has paid US$1,025,000 to complete the acquisition, which has been majority financed from existing cash resources with the balance from a Director loan facility.

Pine Mills is a 2,400-acre producing oil field, currently producing an average of 100 barrels of oil per day (bopd) (gross). Pine Mills is cash flow positive and has no legacy or other spending commitments attached to it. All leases are 'Held By Production', giving Nostra Terra full control over the timing of any future capital expenditure decisions. The effective date of the acquisition is 1 November 2016. Nostra Terra is now the operator of Pine Mills.

Highlights

· 100 bopd (gross) average oil production rate over the last 4 months

· Pine Mills is profitable below US$30 per barrel

· Cue Resources has internally assessed proved reserves of 373,000 bbl as of 1 September 2016 (consistent with PRMS definitions)

o Total historic production of approximately 12.3 MMbbls of oil from inception to present

· Nostra Terra has assumed operator status

· All leases are Held By Production (HBP)

· Shallow, conventional oil, high porosity reservoirs

· Potential to achieve near term, stablised production of 150 bopd through:

o Perforation of additional pay currently behind pipe

o Reactivation of inactive wells

o Infill drilling potential

· Long term upside potential through:

o Deeper exploration targets

o Development opportunity from heavy oil skirt

The Pine Mills oil field

Since the start of 2014, average monthly production at Pine Mills has been in excess of 2,300 barrels.

The previous operator, Cue Resources, has recently completed a significant capital investment programme at Pine Mills. This investment programme created a US$0.5million internal net loss attributable to Pine Mills for the year to 31 December 2015, but resulted in the complete upgrade of the field's infrastructure and completion of downhole refurbishments. As a result of the investment programme operations at Pine Mills has been cash flow positive over the course of 2016. The Acquisition includes:

· 15 actively producing oil wells, including all necessary production equipment

· Five well-maintained, upgraded storage tanks

· 4 shut in wells potentially available for reactivation

· A fully self-contained service rig

· A 12-acre works yard

· 100% ownership of Buccaneer Operating LLC (operatorof Pine Mills)

Commercial rationale for Pine Mills acquisition

As previously announced, Nostra Terra's primary strategy is to acquire producing assets, which are cash flow positive and/or have the potential to grow the Company's reserves in this low oil price environment. Nostra Terra will seek to acquire assets where it can act as operator, within established operating environments. As such, the Acquisition fulfills all of Nostra Terra's core assessment criteria.

The Pine Mills oil field is profitable below US$30 per barrel. This means that Pine Mills will be an immediate net contributor to Nostra Terra. The Company plans to also make further operating improvements in 2017 in order to further improve operating costs. Given the recent significant cost savings the Company has achieved, the introduction of Pine Mills is well timed as Nostra Terra enters 2017 on a much firmer financial footing.

Upside potential at Pine Mills

As operator of the oil field, and since all leases are Held By Production, Nostra Terra will have full autonomy in deciding how, and when, to manage the upside potential at Pine Mills.

There are 4 identified oil formations across Pine Mills:

· Sub Clarksville - Shallowest depths, currently producing and offers greatest near term upside

· Woodbine Sands - Currently producing and contains by-passed pay potential

· Woodbine Wagoner - Not currently producing, but 12 locations have been identified as a potential development opportunity across the heavy oil skirt

· Paluxy - Deepest formation, not currently producing, but proven production potential.

Historic oil production at Pine Mills has generated a large volume of legacy data. Nostra Terra expects that by applying modern oil field technologies and techniques for analyzing this data, the Company will be able to identify bypassed and additional oil reserves from the existing 15 producing wells. Since Pine Mills has a fully equipped service rig, this offers the nearest term and lowest cost potential upside.

The next targets for delivering potential near term upside are the 4 shut-in wells identified as candidates for possible reactivation. Nostra Terra plans to evaluate the 4 targets in the coming months.

For longer-term development of Pine Mills up to 9 infill drill locations have been identified, covering the Sub Clarksville, Woodbine Wagoner and Paluxy formations. An infill drilling programme would have the potential to increase and accelerate recovery rates. Nostra Terra expects to assess these sites in the first half of 2017.

Beyond this, there is significant additional exploration upside at Pine Mills. Pine Mills' success as a producing oil field has been achieved without seismic surveying. This makes the field a prime candidate for a potential 3D seismic project, across its full fold area of approximately 20 square miles.

Nostra Terra will provide updates to the market as it advances operations at Pine Mills. Specifically it will commission an independent assessment of the reserves on Pine Mills and report to the market accordingly.

Director Loan and Related Party Transaction

Discovery Energy Limited, a company which is wholly owned by Non-Executive Chairman Ewen Ainsworth, has provided a loan facility today to the Company in order to part fund the Acquisition ('Loan Facility'). The Loan Facility is for up to £230,000, available to be drawn down over the next 6 weeks and bears an interest rate of 10 per cent per annum. The first £130,000 is to be repaid on or before the first anniversary of the date of first drawdown. Should any drawdown in excess of this occur, it will be repaid within 3 months of today's date.

The Loan Facility is deemed to be a related party transaction in accordance with the AIM Rules for Companies. Accordingly, the independent directors, for this purpose being Matthew Lofgran and Stephen Oakes, consider, having consulted with the Company's Nominated Adviser, Strand Hanson Limited, that the terms of the Loan Facility are fair and reasonable insofar as the Company's shareholders are concerned.

Matt Lofgran, Chief Executive Officer of Nostra Terra, commented:

'The Pine Mills project is a perfect fit for Nostra Terra's strategy. Having reduced our year on year running costs by 40% and refinanced the balance sheet through the sale of our interest in the Chisholm Trail prospect, the Pine Mills acquisition represents a significant step forward for the Company.

Our goal has been to acquire assets, which we operate and where we control the pace of development. Pine Mills fulfills both key criteria. With Pine Mills profitable below $30 per barrel, the project will help underpin our business model as we continue grow the business.

Since our core US team is based in Texas, Nostra Terra has excellent local knowledge of the operating environment. This is now our second acquisition in Texas this year, and we intend to focus our energies on securing more producing assets across this prolific oil region.'

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

For further information, visit www.ntog.co.ukor contact: