NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY
JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF THAT JURISDICTION
FOR
IMMEDIATE RELEASE
London, 30 April 2024
Operational Update for the
quarter ended 31 March 2024
Nostrum Oil & Gas PLC (LSE: NOG)
("Nostrum", or the
"Company" and together with
its subsidiaries, the "Group"), an independent oil and gas
company engaging in the production, development and exploration of
oil and gas in the pre-Caspian Basin, today announces its
operational update in respect of the quarter ended 31 March
2024. This update is being issued in advance of the release of
Nostrum's unaudited interim condensed consolidated accounts for the same
period.
Arfan Khan, Chief Executive Officer of Nostrum Oil & Gas
PLC, commented:
"Nostrum's Q1 highlights demonstrate the positive results of
the strategic initiatives taken by the management, which are
reflected in increased revenues, production and sales
volumes.
We
continued our appraisal of the Stepnoy Leopard fields as well as
the limited-scale drilling programme at our Chinarevskoye
field.
In
our midstream activities, the processing of Ural Oil & Gas
("Ural O&G") raw gas is ongoing. Ural O&G plan to connect
additional four wells during H2 2024 with an estimated 1.5mn
m3 of raw gas per day from these four wells, as per the
guidance provided by Ural O&G.
Moving forward we will continue to execute the strategic
catalysts and priorities with razor-sharp focus on controlling
costs, maintaining operational liquidity, and judicious allocation
of capital to progress value-accreting growth opportunities across
our upstream and midstream portfolios."
Q1
2024 Highlights:
Operational
· Production and
sales
· Daily
production including volumes acquired through third-party
processing averaged 11,943 boepd (Q1 2023: 10,479 boepd without third-party
volumes; Q4 2023: 9,527 boepd with nominal third-party volumes).
Daily sales volumes averaged 10,022 boepd including volumes
produced from third-party processing (Q1 2023: 7,276 boepd, Q4 2023: 8,215 boepd).
The difference between production and sales volumes is primarily
due to the internal consumption of gas and may also include
inventory stock build-up around period end.
· The
production volume split was as follows:
|
Products
|
Q1
2024
volumes
(boepd)
|
Q1
2024
product
mix
(%)
|
Q1
2023
volumes
(boepd)
|
Q1
2023
product
mix
(%)
|
|
Crude Oil
|
2,382
|
19.9%
|
2,948
|
28.1%
|
|
Stabilised Condensate*
|
1,934
|
16.2%
|
1,955
|
18.7%
|
|
LPG (Liquid Petroleum
Gas)
|
1,858
|
15.6%
|
1,318
|
12.6%
|
|
Dry Gas
|
5,769
|
48.3%
|
4,259
|
40.6%
|
|
Total Processed
|
11,943
|
100.0%
|
10,479
|
100.0%
|
*Condensate volumes exclude
third-party processing volumes
Production and sales volumes were
improved as a result of the following initiatives implemented by
the management during 2023:
· Additional
volumes of dry gas and LPG produced from processing raw gas
received from Ural Oil & Gas LLP ("Ural OG) Rozhkovskoye
field U-21 well at Nostrum's gas processing facility.
·
Successful launch of the Gas
lift system expansion in July 2023, which doubled its capacity and
helped to slow down the production decline from the maturing
Chinarevskoye field.
· Additional LPG production from GTU-3 owing to improved yield
by 15% to 20%.
· Chinarevskoye drilling
programme
During Q1 2024, CHN 301 has been
drilled on time and on budget, reaching a total depth of 4,980
meters. The well objective had multiple in-fill targets across
the Carboniferous and Devonian reservoirs. Hydrocarbons (oil,
gas-condensate) have been encountered across all 3 key intervals.
The results are in line with the Company's expectations of initial
well rates of 400 to 700 boepd, expected to startup mid-year. The
drilling rig is being moved to the next well, CNH 41 for an
appraisal sidetrack, with expected start of operations Q3
2024.
· Stepnoy Leopard
fields
During Q1 2024 the two-well
appraisal operations on the Stepnoy Leopard Fields were
largely complete and significant data has been collected, which
provided positive results to date and confirmed the commercial
potential of the field. Based on these results the Company made a
final investment decision ("FID") for the initial field development
phase of the fields that includes drilling of four development
wells across the key reservoirs, targeting recoverable resource
potential between 30 mmboe and 50 mmboe. The forecast total capital
budget for this initial field development phase is US$100
million gross. The project related capital expenditures and
contractual commitments will commence later in 2024 and ramp-up
gradually over the 3-year execution period prior to startup at the
end of 2026. Early cash generation will also strengthen the
self-financing capacity and help spur further development of the
remaining resource base.
Financial
·
Q1 2024 revenues are in excess
of US$31m (Q1 2023: US$17.4m; Q4 2023: US$30.8m), including US$1.7m
for processing third-party hydrocarbons. Slight increase in
revenues compared to Q4 2023 was achieved as a result of additional
volumes from processing third-party hydrocarbons and related sales
volumes, while average product prices remained around the same
level (average Brent oil price of US$83.9/bbl for Q4 2023 vs
US$82.9/bbl for Q1 2024).
· The Group's unrestricted consolidated cash balance as at 31
March 2024 was in excess of US$157m (31 December 2023: US$161.7m),
quarterly reduction mainly due to investing activities related to
Chinarevskoye drilling programme and Stepnoy Leopard appraisal
programme. The restricted cash balance was in excess of US$25m as
at 31 March 2024 (31 December 2023: US$25.2m), comprised of the
debt-service retention account and liquidation fund
deposits.
· The Group continues
to focus on cost optimisation to help preserving cash balances and
enabling growth projects such as Ural O&G third-party
processing and Stepnoy Leopard appraisal and project
development.
Sustainability, HSE
· Zero
fatalities during operations for Q1 2024 (Q1 2023:
zero).
· Zero
Lost Time Injury ("LTI") for Q1 2024 (Q1 2023: zero)
· Zero
Total Recordable Incidents ("TRI") for Q1 2024 (Q1 2023:
zero).
· 1,094 tonnes of air emissions emitted for Q1 2024 against
5,983 tonnes permitted for 2024 under the Kazakhstan Environmental
Code.
·
Safety of all staff and
contractors as well as focus on conducting sustainable operations
remain the Group's priority.
Release of Nostrum's Q1 2024 Financial
Results
Nostrum plans to release its
unaudited interim condensed consolidated financial statements in
respect of the quarter ended 31 March 2024 on or around 30 May
2024.
LEI: 2138007VWEP4MM3J8B29
Further information
For further information please
visit www.nostrumoilandgas.com
Further enquiries
Nostrum Oil & Gas PLC
Petro Mychalkiw
Chief Financial Officer
ir@nog.co.uk
Instinctif Partners -
UK
Guy Scarborough
Vivian Lai
+ 44 (0) 207 457 2020
nostrum@instinctif.com
About Nostrum Oil &
Gas
Nostrum Oil & Gas PLC is an
independent oil and gas company currently engaging in the
production, development and exploration of oil and gas in the
pre-Caspian Basin. Its shares are listed on the London Stock
Exchange (ticker symbol: NOG). The producing asset of Nostrum Oil
& Gas PLC is the Chinarevskoye field, which is operated by
Zhaikmunai LLP, a wholly-owned subsidiary of Nostrum Oil & Gas
PLC and the sole holder of the subsoil use rights with respect to
the development of the field.
Forward-Looking
Statements
Some of the statements in this
document are forward-looking. Forward-looking statements include
statements regarding the intent, belief and current expectations of
the Company or its officers with respect to various matters. When
used in this document, the words "expects", "believes",
"anticipates", "plans", "may", "will", "should" and similar
expressions, and the negatives thereof, are intended to identify
forward-looking statements. Such statements are not promises nor
guarantees and are subject to risks and uncertainties that could
cause actual outcomes to differ materially from those suggested by
any such statements.
No part of this announcement
constitutes, or shall be taken to constitute, an invitation or
inducement to invest in the Company or any other entity, and
shareholders of the Company are cautioned not to place undue
reliance on the forward-looking statements. Save as required by the
relevant listing rules and applicable law, the Company does not
undertake to update or change any forward-looking statements to
reflect events occurring after the date of this
announcement.