TIDMNOG
RNS Number : 0546K
Nostrum Oil & Gas PLC
22 August 2023
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, 22 August 2023
Financial Results for the second quarter and six months ended 30
June 2023
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 financial results in respect of the
second quarter and six months ended 30 June 2023.
Nostrum's management team will present the H1 2023 Results and
will be available for a Q&A session with analysts and investors
today, 22 August 2023, at 2pm UK time. If you would like to
participate in this call, please
register by clicking on the following link and following instructions: Results Call
H1 2023 Highlights:
Financial
-- Revenues of US$52.8m (H1 2022: US$107.8m) against average
realised Brent oil price of US$79.9/bbl (H1 2022: US$104.7/bbl).
Decrease in revenues compared to H1 2022 resulted from declining
production and relatively lower average product prices.
-- EBITDA(1) of US$15.5m (H1 2022: US$68.8m) with EBITDA(1) margin of 29.4% (H1 2022: 63.8%).
-- The Group's unrestricted cash position as at 30 June 2023 was
US$192m (31 March 2023: US$191m). Restricted cash balance was
US$16.3m as at 30 June 2023 (31 March 2023: US$22.6m), which
decreased due to US$6.2m interests payments for the period from 9
February 2023 to 29 June 2023, and was replenished subsequently to
cover the next two interest payments. The next semi-annual cash
interest payment is scheduled for December 2023.
-- Pursuant to the terms of the Restructuring, the interest
accrued on the SSNs and the SUNs from 1 January 2022. Accordingly,
cash interest accrued to 9 February 2023 in the amount of US$17.5
million was paid in cash to the Noteholders upon the issuance of
the SSNs and the SUNs.
-- The Group continues to focus on cost optimisation to help manage liquidity.
Operational
-- Daily production after treatment averaged 10,048 boepd (H1 2022: 14,167 boepd).
-- Daily sales volumes averaged 9,020 boepd (H1 2022: 13,102 boepd).
-- Following the end of the reporting period, the Group
completed the acquisition of an 80% interest in Positiv Invest LLP,
which holds the subsoil use right for the Stepnoy Leopard fields.
Management estimates that the Stepnoy Leopard fields hold between
50 mmboe and 150 mmboe of recoverable volumes which are considered
contingent resources, with over 20% estimated to be liquids. The
Company launched an appraisal programme with the intention of
preparing a technical expert's report which could allow
re-classification of certain of the hydrocarbon resources into
reserves.
-- Following the end of the reporting period, the Group
successfully launched the expansion of its Gas lift system with the
new compressor doubling its capacity and helping to slow down
production decline from its maturing Chinarevkoye field. The
initial production gains exceed management's expectations and
further updates on production guidance will be provided as part of
the Q3 2023 operational update.
-- The GTU-3 restart is progressing according to the plan with
wet gas introduction expected during H2 2023, following which all
gas is planned to be processed through the 3(rd) train of the gas
treatment unit to assess its efficiency.
-- The Group continues its well and reservoir management
strategy through well workovers and rigless well intervention in
2023.
-- Following the end of the reporting period, the Board of
Directors approved a limited-scale drilling programme for the
Chinarevskoye field to be executed over 2023-2024, which is in line
with the commitments of the Company's subsidiary Zhaikmunai LLP
under its production sharing agreement. The programme will leverage
existing wellbores to reduce costs and carries a level of
uncertainties and risks as the planned subsurface targets contain
multiple exploration, appraisal, and development objectives. The
total cost of the programme is estimated at around US$26
million.
-- The Group is progressing with a tie-back project, budgeted
for c.US$5m of capital expenditures. It will allow for the first
ever third-party feedstock from Ural Oil & Gas LLP ("Ural OG")
to be received for treatment in the Group's facilities with an
expected start in Q4 2023.
-- Whilst not itself a target of sanctions imposed in connection
with the conflict in Ukraine, Nostrum continues to monitor the
current and evolving lists of individuals and entities who are
subject to sanctions with a view to compliance by the Group with
all applicable sanctions and to ensuring that the Group's ongoing
activities are not materially affected by such sanctions.
-- Safety of all staff and contractors as well as focus on
conducting sustainable operations remain the Group's priority.
Sustainability
-- Zero fatalities among employees and contractors during
operations in H1 2023 (H1 2022: zero).
-- Zero Lost Time Injury ("LTI") in H1 2023 (H1 2022: zero).
-- One Total Recordable Incident ("TRI") in H1 2023 (H1 2022: two).
-- 2,277 tonnes of air emissions emitted in H1 2023 against
6,309 tonnes permitted for 2023 under the Kazakhstan Environmental
Code.
Arfan Khan, Chief Executive Officer of Nostrum Oil & Gas,
commented:
"We are continuing with the execution of our operational
programme and pleased with the milestones we have achieved during
this reporting period.
The second half of 2023 has already started with the busy
schedule with the launch of an appraisal programme at the Stepnoy
Leopard Fields, the initial production gains following the recent
launch of our Gas lift system expansion as well as the approval of
the limited-scale drilling programme at our Chinarevskoye
Field.
Our focus will remain on our cost optimisation to help manage
liquidity while progressing with the execution of our mixed-asset
energy strategy and realising value for all our stakeholders."
Sales volumes
The sales volume split for H1 2023 was as follows:
Products H1 2023 H1 2023 H1 2022 H1 2022
volumes product mix volumes product mix
(boepd) (%) (boepd) (%)
Crude Oil 2,713 30.1% 2,858 21.8%
-------- ------------ -------- ------------
Stabilised Condensate 2,006 22.2% 3,100 23.7%
-------- ------------ -------- ------------
LPG (Liquid Petroleum
Gas) 1,270 14.1% 1,836 14.0%
-------- ------------ -------- ------------
Dry Gas 3,031 33.6% 5,308 40.5%
-------- ------------ -------- ------------
Total 9,020 100.0% 13,102 100.0%
-------- ------------ -------- ------------
The difference between production and sales volumes is primarily
due to the internal consumption of gas.
Notes to press release
(1) EBITDA is defined as profit before tax net of finance costs,
impairment, foreign exchange loss/gain, ESOP, depreciation,
interest income, other income and expenses.
LEI: 2138007VWEP4MM3J8B29
Further information
For further information please visit
www.nostrumoilandgas.com
Further enquiries
Nostrum Oil & Gas Plc
Ulugbek Makhmadiyarov - Head of Finance
ir@nog.co.uk
Instinctif Partners - UK
Tim McCall
Galyna Kulachek
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) and the Astana
International Exchange (ticker symbol: NOG). The principal
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.
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END
IR MZGZRKZNGFZG
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