REG - Nostrum Oil & Gas - Operational Update for Q1 2024

Nostrum Oil & GasAnnouncement

30/04/2024 07:00

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RNS Number : 4883M  Nostrum Oil & Gas PLC  30 April 2024

 

 

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FOR IMMEDIATE RELEASE

 

London, 30 April 2024

 

 

Operational Update for the quarter ended 31 March 2024

 

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
quarter ended 31 March 2024. This update is being issued in advance of the
release of Nostrum's unaudited interim condensed consolidated accounts for the
same period.

 

 

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

 

"Nostrum's Q1 highlights demonstrate the positive results of the strategic
initiatives taken by the management, which are reflected in increased
revenues, production and sales volumes.

 

We continued our appraisal of the Stepnoy Leopard fields as well as the
limited-scale drilling programme at our Chinarevskoye field.

 

In our midstream activities, the processing of Ural Oil & Gas ("Ural
O&G") raw gas is ongoing. Ural O&G plan to connect additional four
wells during H2 2024 with an estimated 1.5mn m3 of raw gas per day from these
four wells, as per the guidance provided by Ural O&G.

 

Moving forward we will continue to execute the strategic catalysts and
priorities with razor-sharp focus on controlling costs, maintaining
operational liquidity, and judicious allocation of capital to progress
value-accreting growth opportunities across our upstream and midstream
portfolios."

 

 

Q1 2024 Highlights:

 

Operational

·      Production and sales

 

·      Daily production including volumes acquired through third-party
processing 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 including volumes produced from third-party
processing (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 processing volumes

 

Production and sales volumes were improved as a result of the following
initiatives implemented by the management during 2023:

 

·    Additional volumes of dry gas and LPG produced from processing raw
gas received from Ural Oil & Gas LLP ("Ural OG) Rozhkovskoye field U-21
well at Nostrum's gas processing facility.

 

·    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.

 

 

Financial

·    Q1 2024 revenues are in excess of US$31m (Q1 2023: US$17.4m; Q4 2023:
US$30.8m), including US$1.7m for processing third-party hydrocarbons. Slight
increase in revenues compared to Q4 2023 was achieved as a result of
additional volumes from processing third-party hydrocarbons and related sales
volumes, while average product prices remained around the same level (average
Brent oil price of US$83.9/bbl for Q4 2023 vs US$82.9/bbl for Q1 2024).

 

·   The Group's unrestricted consolidated cash balance as at 31 March 2024
was in excess of US$157m (31 December 2023: US$161.7m), quarterly reduction
mainly due to investing activities related to Chinarevskoye drilling programme
and Stepnoy Leopard appraisal programme. The restricted cash balance was in
excess of US$25m 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.

 

 

 

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.

 

Release of Nostrum's Q1 2024 Financial Results

Nostrum plans to release its unaudited interim condensed consolidated
financial statements in respect of the quarter ended 31 March 2024 on or
around 30 May 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). 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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