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Nostra Terra – worth a flutter?

By Doc Holiday | Friday 28 June 2013


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


I have run the slide rule over Nostra Terra Oil & Gas (NTOG) like many small cap E&P companies. I note as a backdrop a positive AGM statement earlier this week and while I reserve the right to change my mind on a company with a few too many shares in issue, today I focus on historic trading swings.

 

Nostra shares have been pretty consistent performers during the last year with steady swings from current level upwards driven by private investors. That should continue as the company is now well funded and thus able to grow.

 

Production levels are steadily increasing to new highs and critically revenues are now covering overheads. Nostra's CEO Matt Lofgran recently stated:

 

“We have seen increased investment activity in the Chisholm Trail area by existing and new players and felt it prudent to take up the offer of additional funds from institutional and other investors. As we surpassed the important milestone of break even on an operational basis at the beginning of this year, as well as record production, these institutional investors are backing our further success knowing that our overheads are covered.”

 And from an insider to an analyst: Harry Stevenson of Beaufort securities:

'' The key to Nostra Terra's growth strategy is the use of precision drilling technology, including horizontal drilling, combined with 3D seismic mapping, sophisticated log suites and Multi-stage well completions to target and exploit compartmentalised reservoirs.''

You can read his full report which sets an ambitious target price here

 At 0.41p Nostra is capitalised at £10.9 million. For a well funded company, covering its overheads from production that appears not to discount the clear value in its US assets.

 



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