REG - Nostrum Oil & Gas - Financial Results for Q1 ended 31 March 2024

Nostrum Oil & GasAnnouncement

30/05/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240530:nRSd3598Qa&default-theme=true

RNS Number : 3598Q  Nostrum Oil & Gas PLC  30 May 2024

 

 

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   Q1 2024       Q1 2023   Q1 2023

                             volumes   product mix   volumes   product mix

                             (boepd)    (%)          (boepd)    (%)
 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
(https://www.nostrumoilandgas.com/investors/summary-financials/#quarterly)

 

LEI: 2138007VWEP4MM3J8B29

 

Further information

For further information please visit www.nostrumoilandgas.com
(http://www.nostrumoilandgas.com)

 

Further enquiries

Nostrum Oil & Gas PLC

 

Petro Mychalkiw

Chief Financial Officer

ir@nog.co.uk (mailto:ir@nog.co.uk)
 
 

 

Instinctif Partners -
UK
 

Guy Scarborough

Vivian Lai

+ 44 (0) 207 457 2020

nostrum@instinctif.com (mailto: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.

 1  EBITDA is defined as profit before tax + non-recurring expenses + finance
costs + foreign exchange loss/(gain) + employee share-option adjustments +
depreciation - interest income + other expenses/(income).

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  QRFUKURRSRUVUUR