REG - Nostrum Oil & Gas - Operational Update for FY 2023

Nostrum Oil & GasAnnouncement

29/01/2024 07:00

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RNS Number : 1327B  Nostrum Oil & Gas PLC  29 January 2024

 

 

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FOR IMMEDIATE RELEASE

 

London, 29 January 2024

 

 

Operational Update for the year ended 31 December 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
year ended 31 December 2023 and provides production guidance for 2024. This
update is being issued in advance of the release of Nostrum's consolidated
accounts for the same period and is therefore, at this stage, unaudited.

 

 

Arfan Khan, Chief Executive Officer of Nostrum Oil & Gas PLC, commented:

 

"During the 2023 reporting period, we were delighted to achieve several
significant operational milestones across all our assets as part of the
implementation of our mixed-asset energy strategy. In particular, the launch
of the appraisal campaign at our newly acquired Stepnoy Leopard fields, the
flawless re-start of our state-of-the-art GTU-3 gas plant, the receipt of the
first ever third-party feedstock into our gas treatment facility, the
expansion of the Gaslift system to reduce the production decline from our
maturing field, as well as the approval of the limited-scale drilling
programme for our maturing Chinarevskoye field.

 

We will continue building on this momentum in 2024 to expand and unlock
further opportunities for all our stakeholders."

 

 

FY2023 Highlights:

 

Operational

·      Chinarevskoye field

 

·      Daily production averaged 10,091 boepd (2022: 13,200 boepd).

 

·      Daily sales volumes averaged 8,874 boepd (2022: 12,524 boepd).
The sales volume split was as follows:

 

 Products                    2023      2023          2022      2022

                             volumes   product mix   volumes   product mix

                             (boepd)    (%)          (boepd)    (%)
 Crude Oil                   2,702     30.4%         3,127     25.0%
 Stabilised Condensate       1,969     22.2%         3,045     24.3%
 LPG (Liquid Petroleum Gas)  1,259     14.2%         1,665     13.3%
 Dry Gas                     2,944     33.2%         4,687     37.4%
 Total                       8,874     100.0%        12,524    100.0%

 

The difference between production and sales volumes is primarily due to the
internal consumption of gas.

 

 

On 23 July: successfully launched the expansion of Gas lift system which
doubled its capacity and helped to slow down the production decline from the
maturing Chinarevskoye field.

 

On 19 December: commenced re-entry drilling operations, in line with the
licence commitments and field development plan of the Company's
subsidiary Zhaikmunai LLP. 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.

 

 

·      Stepnoy Leopard fields

 

On 17 July: completed the acquisition of an 80% interest in Positiv Invest
LLP, which holds the subsoil use right for the Stepnoy Leopard fields.

 

On 29 September: launched the Stepnoy Leopard fields appraisal programme to
confirm the commercial potential, support future field development decision
making and the reclassification of certain of the hydrocarbon resources into
reserves.

 

 

·      Ural OG processing

 

On 21 December: successfully received first gas from the Ural Oil & Gas
LLP ("Ural OG") Rozhkovskoye field U-21 well for treatment into Nostrum's gas
processing facility, with the remaining planned four wells to commence in late
2024. A further update will be provided in the Company's Q1 2024 results.

 

 

·      GTU-3 re-start

 

On 4 September: successfully re-started Nostrum's c.$750
million state-of-the-art GTU-3 gas plant, with 2.5 billion cubic metres per
annum gas processing capacity. The Company completed the modifications and
other works on GTU-3 subsequent to its commissioning and start-up in 2019.

 

 

Financial

·     Full year revenues, in line with expectations, to be in excess of
US$118m (2022: US$199.7m), lower year on year by virtue of anticipated
declining production and relatively lower average product prices (Brent price
averaged US$82/bbl in 2023 vs US$101/bbl in 2022).

 

·     The Group's unrestricted consolidated cash balance as at 31
December 2023 was in excess of US$161m (31 December 2022: US$233.6m), annual
reduction due to payment of 2022 coupon on completion of Restructuring,
payment for acquisition of Stepnoy Leopard fields, and payments arising from
2016-2021 tax audit. The Group's restricted cash balance as at 31 December
2023 was in excess of US$25m (31 December 2022: US$31.0m), comprised of the
debt-service retention account and liquidation fund deposits.

 

·    On 9 February 2023, the Group completed the bond restructuring
initially announced on 23 December 2021 (the "Restructuring") and the related
lock-up and forbearance arrangements were terminated.

 

·      The Group continues to focus on cost optimisation to help manage
liquidity.

 

 

Sustainability, HSE

·      One contractor fatality during operations for 2023 (2022: zero).

 

·      One Lost Time Injury ("LTI") for 2023 (2022: zero)

 

·      Two Total Recordable Incidents ("TRI") for 2023 (2022: four).

 

·     4,987 tonnes of air emissions emitted for 2023 against 6,309 tonnes
permitted for 2023 under the Kazakhstan Environmental Code.

 

·    Safety of all staff and contractors as well as focus on conducting
sustainable operations remain the Group's priority.

 

2024 production guidance

 

·      Chinarevskoye field average daily production forecast for 2024 is
in the range of 7,000-8,000 boepd.

 

Release of Nostrum's 2023 Financial Results

Nostrum plans to release its annual report and audited financial statements in
respect of the financial year ended 31 December 2023 on or around 26 March
2024.

 

 

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) and the Astana International 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.

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