Nostrum Oil & Gas - Full Year Results
23/04/2025 07:00
RNS Number : 8265F
Nostrum Oil & Gas PLC
23 April 2025
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FOR IMMEDIATE RELEASE
London, 23 April 2025
Full Year Results for the Year Ended 31 December 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, is pleased to announce its results for the twelve months ended 31 December 2024 ("FY 2024"), together with the publication of its 2024 Annual Report.
Nostrum's senior executives will present the FY 2024 results and will be available for a Q&A session with analysts and investors at 2pm UK, 23 April 2025. Anyone wishing to participate in this call should register using the following link: Results Call.
Arfan Khan, Chief Executive Officer of Nostrum Oil & Gas PLC, commented:
"In 2024 and early 2025, we continued driving value realisation by executing our mixed-asset energy strategy, achieving key milestones in upstream production growth, infrastructure utilisation, and financial stability. Key achievements included the successful ramp-up of raw gas feedstock from Ural Oil & Gas LLP ("Ural O&G"), additional production from our limited-scale Chinarevskoye drilling programme, as well as continuing production benefits from our 2023 gas lift expansion project at our Chinarevskoye field. Our operations delivered a 48% year-over-year increase in titled production volumes and nearly doubled our processed volumes, with processing facility availability averaging approximately 98% for the year.
Our financial performance was equally robust, with significant revenue and EBITDA growth and reduced operating expenses per barrel, reflecting enhanced processing efficiencies and disciplined cost management. We also maintained a strong liquidity position with net positive operating cashflows of US$33.1 million and unrestricted cash at year end of US$150.4 million (unrestricted cash at year end of US$178.1 million before one-off cashflow items).
The Stepnoy Leopard fields represent a transformative growth opportunity for Nostrum. In 2024, we reached a final investment decision for the first phase of the field's development, followed by an independent Competent Person's Report validating the commercial viability of a scalable full-field development plan, and in April 2025 the Ministry of Energy of the Republic of Kazakhstan approved a phased, full-field development plan which enables us to allocate capital efficiently while staying on track to achieve our target production start-up date between late 2026 and early 2027.
In March 2025, the Group extended its agreement with Ural O&G on new terms for processing third-party hydrocarbons until May 2031. The agreement extension is value-accretive and mutually beneficial for both parties. It provides for a fixed process fee structure across all the products that gives rise to sustainable cash-flows and plant operations. We appreciate the trust and confidence our partner Ural O&G and its shareholders place in us and take great responsibility in supporting the further cost-effective development of their strategic resource base at the Rozhkovskoye field.
Operational safety always remains our key focus, and we achieved a zero-fatality record during the year. We also met our ESG commitments by reducing emission intensity by 28%.
As we look ahead, Nostrum remains well-positioned to implement its mixed-asset strategy by taking the catalyst growth projects to the next level and building value for our investors and stakeholders."
FY 2024 Highlights:
Financial
· A 14.6% increase in revenue: US$137.1 million FY 2024 (FY 2023: US$119.6 million), resulting from increased processed volumes, titled production and sales volumes. Brent crude oil price decreased to an average of US$80.6/bbl for FY 2024 (FY 2023: average of US$82.2/bbl).
· A 16.2% increase in EBITDA1: US$48.9 million FY 2024 (FY 2023: US$42.1 million) and an EBITDA margin of 35.7% (FY 2023 35.2%). EBITDA improvement achieved from both increase in revenues and effective cost control despite inflationary pressures and operational demands.
· A 41% reduction in operating expenses per barrel of processed volumes: US$5.8 FY 2024 (FY 2023: US$9.8).
· A US$86.7 million non-current assets impairment reversal, primarily driven by the accretive value of growth catalysts such as Ural O&G processing and the Stepnoy Leopard fields development opportunity.
· US$33.1 million net positive operating cashflows for FY 2024, which funded most of the Chinarevskoye drilling and Stepnoy Leopard appraisal expenditures, as well as the semi-annual bond coupon payments in June and December 2024, with just US$11.3 million drawn from the Group's unrestricted cash reserves.
· Unrestricted cash balance of US$150.4 million as of 31 December 2024 (31 December 2023: US$161.7 million). The Group's restricted cash balance (debt service retention account and asset liquidation fund) was US$25.9 million as of 31 December 2024 (31 December 2023: US$25.2 million).
· Net debt2 of US$404.2 million as of 31 December 2024 (31 December 2023: US$293.5 million). The Group's net debt increased due to US$51.8 million capitalised SUN interest (FY 2023: US$41.1 million), a US$47.8 million fair value adjustment amortisation expense (FY 2023: US$28.9 million) and a net US$11.0 million reduction in cash and cash equivalents and DSRA.
Operational
· Production and Sales
· A 48% increase in average daily titled production volumes (i.e. final products processed and owned by Nostrum) to 14,935 boepd for FY 2024 (FY 2023: 10,091 boepd). A 94% increase in total processed volumes (including third party condensate tolling volumes) to 19,831 in FY 2024 (FY 2023: 10,216 boepd). These increases in production and processed volumes were mainly due to:
o Production from well No.301, commencing from May 2024;
o Full year contribution from:
o Processing of raw gas and condensate volumes from Ural O&G, commencing from December 2023;
o Gas-lift system expansion, which was successfully launched in July 2023 doubling its capacity and performing above management expectations; and
o Successful operation of GTU-3 from September 2023, resulting in additional 26% LPG yield.
· The titled production volume split was as follows:
| Products | FY 2024 volumes (boepd) | FY 2023 volumes (boepd) | Y-on-Y change (%) | FY 2024 product mix (%) | FY 2023 product mix (%) | |
| Crude Oil | 2,536 | 2,649 | (4.3)% | 17.0% | 26.3% | |
| Stabilised Condensate* | 1,897 | 1,979 | (4.1)% | 12.7% | 19.6% | |
| LPG (Liquid Petroleum Gas) | 2,537 | 1,291 | 96.5% | 17.0% | 12.8% | |
| Dry Gas | 7,965 | 4,172 | 90.9% | 53.3% | 41.3% | |
| Total | 14,935 | 10,091 | 48.0% | 100.0% | 100.0% |
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