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 May 2024
Financial Results for the
first quarter ended 31 March 2024
Nostrum Oil & Gas PLC (LSE: NOG)
("Nostrum", or the
"Company" and together with
its subsidiaries, the "Group"), an independent mixed-asset
energy company with world-class gas processing facilities and
export hub in north-west Kazakhstan, today announces
its unaudited financial results for the first
quarter ended 31 March 2024.
Arfan Khan, Chief Executive Officer of Nostrum Oil & Gas
PLC, commented:
"We are pleased to report an increase in revenues and overall
positive operational results this quarter. The improved
financial performance was underpinned by the lower upstream base
production decline owing to expansion of the gas-lift capacity, and
increasing midstream third-party production. To safeguard our
margins and cash balances, we are continuing to prioritise cost
optimisation and capital allocation that maximizes our ability to
further grow the midstream business and progress the upstream
Stepnoy Leopard development."
Q1
2024 Highlights:
Financial
· Revenues of
US$31.8m (Q1 2023 US$17.4m; Q4 2023 US$30.8m), including US$1.7m
for processing third-party hydrocarbons. The increase in revenues
compared to Q4 2023 was achieved as a result of additional sales
volumes from processing third-party Ural Oil & Gas
LLP ("Ural O&G") hydrocarbons, whilst average Brent oil
price remained at similar levels (average Brent oil price of
US$83.9/bbl for Q4 2023 vs US$82.9/bbl for Q1 2024).
· EBITDA[1] of US$10.6m (Q1 2023:
US$4.6m; Q4 2023: US$9.1m) with EBITDA margin of 33.3% (Q1 2023
26.4%; Q4 2023 29.5%).
· The Group's
unrestricted consolidated cash balance as at 31 March 2024 was
US$157.6m (31 December 2023 US$161.7m), including current
investments in term deposits and money market funds. Quarterly
reduction mainly due to investing activities related to
Chinarevskoye drilling programme and Stepnoy Leopard appraisal
programme. The restricted cash balance was US$25.2m 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.
Operational
· Production and
sales
· Daily
production, including third-party volumes acquired, 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 (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 processed volumes
Production and sales volumes were
improved in Q1 2024 by the following:
· Additional volumes
of dry gas and LPG produced from processing raw gas received from
Ural O&G Rozhkovskoye field U-21 well at Nostrum's gas
processing facilities.
·
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.
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.
Please note that the next investor
and analyst call will be held in August 2024 as part of Nostrum's
H1 2024 Results publication.
The Company's interim condensed
consolidated financial statements are available to download on
Nostrum's website:
Download: Q1-2024 Interim Condensed Consolidated Financial
Statements
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.