TIDMNOG
RNS Number : 4809M
Nostrum Oil & Gas PLC
30 April 2018
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
London, 30 April 2018
Operational Update for the First Quarter ending 31 March
2018
Nostrum Oil & Gas PLC (LSE: NOG) ("Nostrum", or "the
Company"), 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 three-month period ending 31 March 2018. This update
is being issued in advance of the release of Nostrum's consolidated
accounts for the same period. The information contained in this
update remains subject to review by the Company's independent
auditors.
Highlights:
Operational
-- Q1 2018 average production after treatment of 32,946 boepd
-- Q1 2018 average sales volumes of 30,874 boepd
Financial
-- Revenues expected to be in excess of US$94 million (Q1 2017: US$111.9 million)
-- Cash position in excess of US$130 million (FY 2017: US$127 million)
-- Total debt expected not to exceed US$1,125 million and net debt expected not to exceed approximately US$995
million as at 31 March 2018
Kai-Uwe Kessel, Chief Executive Officer of Nostrum Oil &
Gas, commented:
"The focus for 2018 is on stabilising our production decline and
starting to grow production in the second half of the year. During
Q1 we carried out work in three main areas. Firstly, we have been
trying to establish the source of the water that led to us losing
two significant production wells during 2017. The results we have
obtained show that the water is likely reservoir water but
contained to the flanks on the Biski North East reservoir. One of
our production wells has encountered this water on the flanks as we
drilled through it, after which we stopped drilling on the well.
Further analysis will be carried out but our initial conclusion is
that the likely impact on our reserves is limited and that the
central part of the Biski North East reservoir remains a source for
future production wells to be drilled.
The second focus for 2018 is on drilling production wells. We
are approaching completion of the first well that has encountered
hydrocarbons and will bring that well online as soon as it is
completed. Currently we have a rig working to remove the drill
pipes from the well which were stacked after cementation. Finally,
we are looking to open up the Northern Area's proven and probable
reserves for future production. A well in the Northern Area of the
field has been deepened using a workover rig and we are waiting to
compete an open hole test in the coming days."
Sales volumes
The sales volumes split for Q1 2018 was as follows:
Products Q1 2018 sales volumes Q1 2018 Product
(boepd) Mix (%)
Crude Oil & Stabilised Condensate 12,080 39
--------------------- ---------------
LPG (Liquid Petroleum Gas) 3,978 13
--------------------- ---------------
Dry Gas 14,816 48
--------------------- ---------------
Total 30,874 100
--------------------- ---------------
The difference between production after treatment and sales
volumes is due to part of the dry gas being used for internal
consumption (power generation), gas lift and some losses during
transportation.
Drilling
-- 43 wells currently producing at the Chinarevskoye Field - 23
oil wells and 20 gas condensate wells
-- In Q1 2018 drilling of our first production well that
encountered hydrocarbons is almost complete
-- Drilling of the well that encountered water in the flanks of
the Biski North East has been stopped
-- The appraisal of the Northern Area has continued with the
deepening of an old well with a workover rig, two core samples have
been taken and an open hole test will be completed in the coming
days
-- Completion and stimulation activity finished on one oil
development well which was successfully brought online
-- Preparations were made to recommence the technical appraisal
of one well in the Western area of the Chinarevskoye field
-- Wellsite preparation commenced on two further gas condensate
development wells to be completed later in the year
-- Currently there are two drilling rigs on the field with a
third rig due to arrive and be operational in Q2 to allow for up to
eight wells to be drilled during 2018
Production guidance
-- Whilst the analysis carried out on the Biski reservoir
doesn't impact the reserves in the field, we had anticipated
production from one well in the flanks during 2018 and thus
production guidance in the short term may be at risk of a slight
reduction from 37,000 boepd. An update will be provided at the Q1
financial results release.
-- For guidance beyond 2018 we rely on Ryder Scott figures which
are shown below. If we alter the drilling schedule during 2018 such
that production wells are running behind schedule then this will
have some impact on the ability to meet the Ryder Scott numbers in
the future. Currently we do not see material changes but we are
running behind our forecast plan as a result of the analysis of the
issues on the water encountered in the Biski reservoir:
- 2019 - Ryder Scott guidance assumes average production of 56,087 boepd
- 2020 - Ryder Scott guidance assumes average production of 68,211 boepd
- 2021 - Increasing the rig count to six at the field site to
build production towards filling capacity beyond 2021
Progress on the development of GTU3
In Q1 2018 the construction of GTU3 entered into its final
construction phase. The tie-in of GTU3 into existing infrastructure
at field site started on April 26, 2018 during the scheduled
shut-down of GTU1&2. We expect the tie-in to take three weeks
and pre-commissioning activities will then start along with the
complete hydro-testing of all the tie-ins.
The below figures reflect all future cash payments to be made
excluding VAT on GTU3.
GTU3 Cash Spent (excl VAT) as at 31 March 2018
Expenditure remaining in 2018 US$45.9 million
--------------------
Release of Nostrum's Q1 2018 Financial Results
Nostrum plans to release its audited consolidated accounts for
Q1 2018 ending 31 March 2018 on 22 May 2018.
LEI: 2138007VWEP4MM3J8B29
Further information
For further information please visit www.nog.co.uk
Further enquiries
Nostrum Oil & Gas PLC - Investor Relations
Kirsty Hamilton-Smith
Amy Barlow
+44 203 740 7433
ir@nog.co.uk
Instinctif Partners - UK
David Simonson
Laura Syrett
George Yeomans
+ 44 (0) 207 457 2020
Promo Group Communications - Kazakhstan
Asel Karaulova
Irina Noskova
+ 7 (727) 264 67 37
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 principal
producing asset of Nostrum Oil & Gas PLC is the Chinarevskoye
field, in which it holds a 100% interest and is the operator
through its wholly-owned subsidiary Zhaikmunai LLP. In addition,
Nostrum Oil & Gas holds a 100% interest in and is the operator
of the Rostoshinskoye, Darinskoye and Yuzhno-Gremyachinskoye oil
and gas fields through the same subsidiary. Located in the
pre-Caspian basin to the north-west of Uralsk, these exploration
and development fields are situated approximately 60 and 120
kilometres respectively from the Chinarevskoye 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 Partnership 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 or 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 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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