TIDMNOG
RNS Number : 5454H
Nostrum Oil & Gas PLC
28 July 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, 28 July 2023
Operational Update 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 operational update in respect of the
second quarter and six months ended 30 June 2023.
H1 2023 Highlights:
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 will launch 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.
-- 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
Q3 2023 operational update.
-- The GTU-3 restart is progressing as per 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.
-- The Group is continuing to study opportunities for limited-scale drilling operations in the Chinarevskoye field with a plan to finalise its conclusions in the near term.
-- 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.
Financial
-- H1 2023 revenues expected to be in excess of US$52m (H1 2022:
US$107m). H1 and FY sales and revenues remain in line with
management's targets and expectations. Decrease in revenues
compared to H1 2022 resulted from declining production and
relatively lower average product prices.
-- The Group's unrestricted cash position as at 30 June 2023 was
in excess of US$192m (31 March 2023: US$191m). Restricted cash
balance was in excess of US16m as at 30 June 2023 (31 March 2023:
US$22.6m), which decreased due to US$6.2m interest 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.
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 Incidents ("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 pleased with the significant operational milestones we
have achieved during the H1 2023.
Following the successful completion of the Stepnoy Leopard
Fields acquisition this month, we have already commenced an
appraisal programme to reclassify certain contingent resources into
proven reserves which will help us to determine the commercially
viable development schemes. This is an attractive upstream tie-back
project for us that could deliver material reserves addition to the
Group's resource base.
We are also excited with the initial production gains following
the recent launch of our Gas lift system expansion and will provide
further updates on our production guidance as part of our Q3 2023
operational update.
We will continue with the execution of our mixed-asset energy
strategy launched this year to capitalise on the advantaged
position of our existing infrastructure and attract third party
volumes."
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.
Release of Nostrum's H1 2023 Financial Results
Nostrum plans to release its H1 2023 interim financial report
including unaudited and unreviewed interim condensed consolidated
accounts for the period ending 30 June 2023 on 22 August 2023.
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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