I am pleased to present Nostra Terra Oil & Gas Company PLC's annual report for the year ending 31 December 2021.

2021 - a year of success and positive change

2020 closed amidst uncertainty as to how the Covid-19 pandemic would develop; only in the last few months has some degree of certainty returned. As at the time of writing it appears that, with the significant exception of China, most of the world has moved back to business as usual. This translated itself into a rising WTI oil price through the year as global economic activity took off again.

The reimposition of widespread lockdowns in China in early 2022, after the end of the reporting period, might have derailed this price recovery. However, the invasion of Ukraine by Russia on 24^th February 2022 and the subsequent sanctions against, and voluntary boycotts of, Russian oil & gas have served to restrict supply such that, as I write, WTI is trading above $100 per barrel. It appears destined to remain there for the foreseeable future, as the war in Ukraine shows no sign of stopping. In the context of today's geopolitical situation, our Texan assets are advantageously located in a politically stable environment.

Nostra Terra took advantage of the low oil prices in 2020 to expand its portfolio of assets in Texas with the acquisition of Caballos Creek. In 2021, because of the strengthening oil price, we adjusted our strategy to one of realising the value from our existing assets while continuing to assess new opportunities. We are now seeing the fruits of these actions.

January 2021 saw the Cypress well (Fouke 1) at Pine Mills successfully completed and put into production with a low lifting cost per barrel. The same month Nostra Terra became cashflow positive at the corporate level.

During 2021, workovers on existing wells and other operational improvements led to an increase in average net daily production from 84 bbl/day in H1 2021 to 100 bbl/day in September 2021. By the end of May 2022 this had increased to circa 140 bbl/day (see below).

Net proven reserves attributable to Nostra Terra increased substantially during 2021, from 763,760 in 2020 to 973,180 bbl in late September and continued to rise to 1,073,960 bbl after year end.

These positive developments have led to a considerable increase in our revenue stream and to the size of our borrowing base: from $1.55 million in early 2021 to $2.35 million in later September 2021. After the end of the reporting year, (as announced on 28 March 2022), this currently stands at $3.35 million.

As well as working over existing wells in 2021, the Company prepared for the drilling of two new wells - Fouke 2 (32.5% Nostra Terra working interest) at Pine Mills, East Texas and the Grant East 1 well (100% Nostra Terra working interest) in the Permian Basin, West Texas.

After the year end of 31^st December 2021, these wells both spudded and were drilled successfully. The Fouke #2 well flowed 145 bbl/day with no water cut; this is a 77% higher flow rate than that from the Fouke #1 well. The Grant East #1 reached TD in early May 2022 and as I write the results of fracture stimulation are awaited.

In early February 2022 Paul Welch was appointed as a non-executive director of the Company. Paul brings a wealth of experience to Nostra Terra and his positive contribution is already being felt.

The optimism your Board felt at the start of 2021 has been vindicated: Nostra Terra has taken advantage of the strengthening oil price and its acreage position to put it in a much stronger financial position. This will allow the Company to continue to expand its operations in a carefully planned manner.

I would like to thank shareholders for their continued support.

Dr Stephen Staley

Non-Executive Chairman

7 June 2022

Chief Executive Officer's Report

2021 marked the beginning of a turnaround for Nostra Terra. The Company fought through the tough times of 2020, but then started to return to growth in 2021. The 2021 focus for the Company was on increasing cashflow while minimising dilution and positioning the Company for larger growth ahead.

At the beginning of the year, we conducted a small, oversubscribed fundraise of £500,000 from institutional and professional investors, used for potential new opportunities. We brought on a new well at the beginning of the year as a non-operated, but significant working interest, asset while working on new opportunities to expand where we would operate and have a larger working interest ("WI"). This was accomplished while maintaining low overheads (16% lower than 2020).

Revenues for the year were $2,282,000 an increase of 123% from $1,025,000 in 2020, reflecting a combination of a 26% increase in production sales and an improving commodity price environment (average $61.42 per barrel sold in 2021 compared to $34.17 in 2020). Gross profit before non-cash items (depreciation, depletion, and amortization) was $574,000, significantly improved from a loss of $85,000 in 2020.

The Board continues to focus on its stated aim of increasing cashflow and reserves for the year ended 2022.

United States

All of Nostra Terra's operations in the US target conventional reservoirs (i.e., not shale), typically with lower lifting costs and long-life reserves than unconventional ones.

East Texas (33- 100% WI)

Nostra Terra's core asset is Pine Mills (100% WI) providing secure production. Production remained stable for the year from the core producing wells, while the focus was on growing production significantly in the new farmout area.

During 2020 Nostra Terra farmed out an undrilled portion of the acreage to Cypress LLC, retaining a 32.5% WI, where a 25% WI was carried in the first well. In January 2021 drilling was finished on the new Fouke 1 well and it was put into production. The well was very successful, reaching payback in 5 months and continued producing throughout the year with no decline in production. Following this success, planning was undertaken for the next well, including increasing the acreage position in the farmout area. The Fouke 2 was drilled and put on production in the first half of 2022 (post-period). The well on test flowed at a rate of 145 bopd over a 24-hour period with a 0% watercut and was subsequently placed into production. This production rate exceeds that of the offset Fouke 1 well by 77%; Fouke 1 had been limited by field rules (allowable) to 82 bopd per well. As a result of the past performance of the Fouke 1 and the test rate of the Fouke 2, the operator plans to request a substantial increase in the field allowable rate so that both wells can be produced at much higher and more efficient rates. A decision is anticipated later in the year. During the interim period the operator plans to produce each well at circa 140 bopd, which is above the current allowable cap, to obtain sufficient technical information to support the increased field allowable. Further drilling is anticipated in this acreage.

West Texas (50 - 100% WI)

In 2021 production from the area accounted for 11% of the Company's sales (50-75% WI). Management targeted this prolific area as a place to grow production in 2022. In January 2022 (post-period) the Company announced growth plans, including this area. In April 2022 the company announced the new Grant East lease acquisition (100% WI) with up to 16 potential drilling locations.

South Texas (100% WI)

In 2020 the Company acquired the Caballos Creek asset, comprising two leases. There are no current plans for expansion in this area. Production during 2021 accounted for 10% of Company sales.

Senior Lending Facility

In September 2021 the Company renewed its Senior Lending Facility, resulting in a significant increase in Facility size and available Borrowing Base. The Facility has an initial nominal amount of U$10,000,000, double the previous US$5,000,000. The Borrowing Base has been increased to US$2,350,000 based on improved production and cashflow during the first half of 2021. The size of the Facility and Borrowing Base is reassessed at least twice yearly. The Board anticipates the Borrowing Base will increase substantially in the upcoming redetermination as the Company's production and reserves have since increased significantly. The current interest rate applied to use of the Facility is 4.40%

The Facility is not restricted to geographical region. Nostra Terra can deploy funds from the Facility for operational purposes and acquisitions in its current areas of operation in the USA, or in other areas of the world, should the opportunity arise.

Outlook
The global events this year have put a spotlight on the energy industry and the continued need for oil and gas in the world. The outlook for the industry is strong, as can be seen through robust commodity prices. In 2021 Company revenue more than doubled over the prior year and cashflow has also increased substantially. It was a year of strong growth and 2022 is on track to be an even better year. Having free cashflow puts the Company in a very strong position and we remain focused and disciplined on growing that further.

We're grateful for the support of our shareholders throughout the year. On behalf of the entire team at Nostra Terra we thank you and look forward to continued growth going forward.

Matt Lofgran

Chief Executive Officer

7 June 2022

Consolidated Income Statement

For the year ended 31 December 2021