REG - Nostrum Oil & Gas - Financial Results for 2Q and 6M ended 30 June 2023

Nostrum Oil & GasAnnouncement

22/08/2023 07:00

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RNS Number : 0546K  Nostrum Oil & Gas PLC  22 August 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, 22 August 2023

 

 

Financial Results 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 financial results in respect of the
second quarter and six months ended 30 June 2023.

 

Nostrum's management team will present the H1 2023 Results and will be
available for a Q&A session with analysts and investors today, 22 August
2023, at 2pm UK time. If you would like to participate in this call, please
register by clicking on the following link and following instructions:
 Results Call
(https://event.loopup.com/SelfRegistration/registration.aspx?booking=9YaVdIfcz1JyLTFouyjCa4FtXcrJFOYlTPtl70rCviE=&b=2389e96d-457b-46a8-bebb-fec356d5b031)

 

 

H1 2023 Highlights:

 

Financial

·    Revenues of US$52.8m (H1 2022: US$107.8m) against average realised
Brent oil price of US$79.9/bbl (H1 2022: US$104.7/bbl). Decrease in revenues
compared to H1 2022 resulted from declining production and relatively lower
average product prices.

 

·     EBITDA(1) of US$15.5m (H1 2022: US$68.8m) with EBITDA(1) margin of
29.4% (H1 2022: 63.8%).

 

·    The Group's unrestricted cash position as at 30 June 2023 was US$192m
(31 March 2023: US$191m). Restricted cash balance was US$16.3m as at 30 June
2023 (31 March 2023: US$22.6m), which decreased due to US$6.2m interests
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.

 

 

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 launched 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.

 

·   Following the end of the reporting period, 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 the Q3 2023 operational update.

 

·     The GTU-3 restart is progressing according to the 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.

 

·   Following the end of the reporting period, the Board of Directors
approved a limited-scale drilling programme for the Chinarevskoye field to be
executed over 2023-2024, which is in line with the commitments of the
Company's subsidiary Zhaikmunai LLP under its production sharing agreement.
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. The total cost of
the programme is estimated at around US$26 million.

 

·    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.

 

 

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 Incident ("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 continuing with the execution of our operational programme and pleased
with the milestones we have achieved during this reporting period.

 

The second half of 2023 has already started with the busy schedule with the
launch of an appraisal programme at the Stepnoy Leopard Fields, the initial
production gains following the recent launch of our Gas lift system expansion
as well as the approval of the limited-scale drilling programme at our
Chinarevskoye Field.

 

Our focus will remain on our cost optimisation to help manage liquidity while
progressing with the execution of our mixed-asset energy strategy and
realising value for all our stakeholders."

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.

 

Notes to press release

(1) EBITDA is defined as profit before tax net of finance costs, impairment,
foreign exchange loss/gain, ESOP, depreciation, interest income, other income
and expenses.

 

 

LEI: 2138007VWEP4MM3J8B29

 

Further information

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

 

Further enquiries

Nostrum Oil & Gas Plc

Ulugbek Makhmadiyarov - Head of Finance

ir@nog.co.uk (mailto: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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