REG - Nostrum Oil & Gas - Financial Results for 2Q and 6M ended 30 June 2024

Nostrum Oil & GasAnnouncement

20/08/2024 07:00

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RNS Number : 9878A  Nostrum Oil & Gas PLC  20 August 2024

 

 

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, 20 August 2024

 

 

Financial Results for the second quarter and six months ended 30 June 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, today announces its financial results for the second quarter and
six months ended 30 June 2024 ("H1 2024").

 

Nostrum's management team will present the H1 2024 results and will be
available for a Q&A session with analysts and investors today, 20 August
2024, at 2pm UK time. If you would like to participate in this call, please
register by following the instructions provided in this link: Results Call
(https://event.loopup.com/SelfRegistration/registration.aspx?booking=XOMb0fLX6vCraTmHfikryYbqlfzSwPDlYCsyqUheca0=&b=2389e96d-457b-46a8-bebb-fec356d5b031)

 

 

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

 

"I am pleased to share the Group's results for H1 2024. We delivered solid
operational and financial performance during this period, while also reaching
key milestones that are strategically important for the Company's
transformation into a mixed-asset energy company.

 

An increase of 44% in EBITDA for the first half of 2024, compared to the same
period last year, along with a net positive operating cash flow during this
period, highlights the successful initial results of the Company's new
strategy, which includes processing third-party hydrocarbons from neighbouring
Ural Oil & Gas LLP.

 

In April we announced our final investment decision for the initial
development phase of the Stepnoy Leopard Fields, followed by the release of
the Stepnoy Leopard Competent Person's Report in July, which added 110 mmboe
net to Nostrum's 2P reserves base, at an estimated NPV10 of approximately
US$220 million.

 

As always, health and safety remain our priority, as we focus on operational
excellence and continue managing our liquidity to maximise value for all our
investors and stakeholders."

 

 

H1 2024 Highlights:

 

Financial

 ·             Revenues of US$65.3 million, a 23.7% increase compared to US$52.8 million in
               H1 2023, resulting from additional sales volumes of dry gas and LPG produced
               from Ural Oil & Gas LLP ("Ural O&G") and US$3.9 million of condensate
               tolling revenue. Brent crude oil price increased from an average of
               US$79.7/bbl in H1 2023 to an average of US$83.7/bbl in H1 2024.

 ·             44% increase in EBITDA(1) of US$22.3m (H1 2023: US$15.5m) with EBITDA margin
               of 34.2% (H1 2023: 29.4%). The increase is primarily driven by increased
               production and revenues as well as prudent cost management.

 ·             The Group's unrestricted cash balance as at 30 June 2024 was US$142.5 million,
               including current investments in fixed term deposits and liquid money market
               funds. Excluding one-off items, our closing unrestricted cash position at the
               end of June would have been US$158.4m, a slight decrease from the 2023
               year-end cash balance of US$161.7m.

 ·             The restricted cash balance (DSRA and asset liquidation fund) was US$25.5
               million as at 30 June 2024 (31 March 2024: US$25.2 million).

 ·             The Group continues to focus on maximising facility uptime, controlling costs
               and improving efficiencies across all facets of our business, while allocating
               and efficiently utilising existing resources on growth projects.

 

Operational

·      Production and sales

·      Daily production averaged 12,220 boepd (H1 2023: 10,048 boepd),
a 22% increase driven by:

o  Additional volumes of dry gas and LPG produced from processing raw gas
received from Ural O&G at Nostrum's gas processing facilities.

 

o  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.

 

o  Additional LPG production from GTU-3 owing to improved yield by around
20%.

 

·      The production volume split for H1 2024 was as follows:

 Products                    H1 2024   H1 2024       H1 2023   H1 2023

                             volumes   product mix   volumes   product mix

                             (boepd)    (%)          (boepd)    (%)
 Crude Oil                   2,393     19.6%         2,723     27.1%
 Stabilised Condensate*      1,850     15.1%         1,898     18.9%
 LPG (Liquid Petroleum Gas)  1,983     16.2%         1,258     12.5%
 Dry Gas                     5,994     49.1%         4,169     41.5%
 Total                       12,220    100.0%        10,048    100.0%

*Stabilised condensate volumes exclude Ural O&G processed volumes for
which Nostrum receives a tolling fee

 

·      Daily sales volumes averaged 10,475 boepd for H1 2024 (H1 2023:
9,020 boepd). The difference between production and sales volumes is
primarily due to the internal consumption of dry gas produced and may also
include inventory increases or decreases at period end.

 

 

·      Chinarevskoye drilling programme

The well No.301 was put into production in May 2024, with initial flow rates
in line with the management's expectations. The sidetrack well No.41
completion is expected in Q3 2024.

 

·      Stepnoy Leopard Fields

Following the final investment decision for the initial development phase of
the Stepnoy Leopard Fields in March 2024, Nostrum released the full-field
development Stepnoy Leopard CPR, an evaluation of reserves and resources as
of 1 January 2024 prepared by Xodus Group Limited. The full-field
development Stepnoy Leopard CPR resulted in addition of 110 mmboe (80% working
interest) net 2P reserves with US$220m after-tax net (80% working interest)
NPV10 and 34% IRR.

 

·      Ural O&G third-party processing

Throughout H1 2024 the Company continued processing Ural O&G raw gas from
the U-21 well in the Rozhkovskoye field. The tie-back of an additional four
wells during 2024 is expected to increase processing to 1.5 Mm(3)/day of raw
gas (Ural O&G (MOL) guidance).

 

 

Sustainability and HSE

·      Zero fatalities among employees and contractors during
operations in H1 2024 (H1 2023: zero).

·      Total Recordable Incidents Rate (incidents per million man-hours)
of 0.64 for H1 2024 (H1 2023:1.0).

·      Zero Lost Time Injury Rate (incidents per million man-hours) for
H1 2024 (H1 2023: zero).

·      2,590 tonnes of air emissions emitted in H1 2024 against 5,983
tonnes permitted for 2024 under the Kazakhstan Environmental Code.

·      Improved independent ESG Risk Rating of 29.2 (end of 2023: 30.1),
moving Nostrum to Medium risk category.

 

 

Notes to press release

(1) EBITDA is a non-IFRS measure and is defined as profit before tax net of
depreciation, depletion and amortisation, share-based compensation, foreign
exchange losses, finance costs, finance income, non-core income or expenses
and taxes.

 

 

The Company's results materials are available to download from Nostrum's
website:

 

Download: H1 2024 Results Presentation
(https://www.nostrumoilandgas.com/investors/reports-presentations/#presentations)

Download: H1 2024 Interim Financial Report
(https://www.nostrumoilandgas.com/investors/summary-financials/#quarterly)

 

 

LEI: 2138007VWEP4MM3J8B29

 

Further information

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

 

Notifying person

Thomas Hartnett

Company Secretary

 

 

 

 

 

 

 

About Nostrum Oil & Gas

Nostrum Oil & Gas PLC is an independent mixed-asset energy company with
world-class gas processing facilities and export hub in north-west Kazakhstan.
Its shares are listed on the London Stock Exchange (ticker symbol: NOG). The
principal producing asset of Nostrum Oil & Gas PLC is the Chinarevskoye
field which is operated by its wholly-owned subsidiary Zhaikmunai LLP, which
is the sole holder of the subsoil use rights with respect to the development
of the Chinarevskoye field. The Company also owns an 80% interest in Positive
Invest LLP, which holds the subsoil use rights for the "Kamenskoe" and
"Kamensko-Teplovsko-Tokarevskoe" areas in the West Kazakhstan region (the
Stepnoy Leopard Fields).

 

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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