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Oil company Nostra Terra Oil & Gas said it had agreed to sell a 75% take in its Pine Mills acreage in East Texas to Cypress.
In exchange for the stake, Cypress would drill one well at its sole expense.
Nostra Terra said it may participate for an additional 10% of the uncarried working interest at cost for the one well, at its sole option within the next 30 days.
'We're excited to execute this farmout agreement with Cypress,' chief executive Matt Lofgran said.
'Pine Mills has been a stable producer for the company, whilst providing much scope for expansion.'
'A farmout gives us the ability to leverage our existing asset and seek to grow our production and reserves, with no cost to Nostra Terra.'
'We look forward to the opportunity to add new wells that could provide a significant increase in production.'