As per the terms of the contract, CNI will acquire all the rights and obligations associated with the Joint Activity Agreement of January 27, 2001 (the JAA) covering NTOL’s operations in Ukraine and in particular the Oktyabrskoe field licence.

NTOL will retain a right to payment of 25% of any net profits generated by CNI from the JAA, which runs for a period of 25 years from January 27, 2001. The consideration for the transaction is to be settled by the deferred payment from future oil sale proceeds of 360,000 Ukraine hryvnia (approximately GBP29,000).

During the last nine months, Nostra Terra has embarked on a new strategic direction focused initially on the mature, low-cost oil producing region of the US mid-continent, where it has already established early oil production and continues to build its asset portfolio.

Matt Lofgran, CEO of Nostra Terra, said: “I believe this is a very positive deal for Nostra Terra and our shareholders, as it provides us with the right to 25% of any future net profits from the currently non-productive JAA, with no further cost exposure.”

CNI is based in Evpatoria, Crimea, and has other oil and gas interests in the region. Nostra Terra will retain its small representative office in Ukraine for the time being in order to assist and monitor the joint venture.

The company’s 25% interest in the Oktyabrskoe field licence was carried at GBP153,000 in its last audited consolidated accounts. For the year ended December 31, 2008, the company reported a gross loss of GBP115,000 on turnover of GBP88,000 from its Ukrainian operations following unsuccessful exploration on the Oktyabrskoe #10, #24 and #50 wells.