REG - Nostrum Oil & Gas - Full Year Results

Nostrum Oil & GasAnnouncement

23/04/2025 07:00

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RNS Number : 8265F  Nostrum Oil & Gas PLC  23 April 2025

 

 

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FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF THAT JURISDICTION

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
(https://event.loopup.com/SelfRegistration/registration.aspx?booking=b7P4rcyyzaKjE0wO2wd91Ti5M7i9Ny3Yfz3r0PoyYYg=&b=2389e96d-457b-46a8-bebb-fec356d5b031)
.

 

 

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 EBITDA(1): 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 debt(2) 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   FY 2023   Y-on-Y change      FY 2024       FY 2023

                             volumes   volumes   (%)                product mix   product mix

                             (boepd)   (boepd)                       (%)           (%)
 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%

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

 

·      A 47% increase in average daily sales volumes to 13,038 boepd for
FY 2024 (FY 2023: 8,874 boepd). The difference between production and sales
volumes is primarily due to the internal consumption of dry gas produced and
timing of product deliveries, which leads to inventory increases or decreases
at period end.

 

·      Chinarevskoye Drilling Programme

The 2024 drilling programme was substantially completed adhering to planned
schedule and budget. As previously reported, the well No.301 has been
producing since end of May 2024 in line with the management's expectations.
The well was perforated in the lowest of the reservoirs with the plan underway
to perforate the Tournasian reservoir in Q2 2025. Well No.41 appraisal
sidetrack work carried a significant level of uncertainty and risk due to the
multiple exploration, appraisal, and development objectives. The well was
completed in September 2024, but the initial test missed the primary Devonian
target horizon. While secondary intervals with hydrocarbons were encountered,
they were deemed marginal. As a result, the well has been temporarily
suspended. However, the key (sonic) data gathered during drilling has greatly
enhanced understanding of the reservoir's spatial architecture, enabling more
confident planning for a future well.

 

·      Stepnoy Leopard Fields

Several key milestones were achieved in FY 2024. The successful completion of
a two-well appraisal programme supported the final investment decision for the
initial development phase, followed by a Competent Person's Report in July
2024, confirming 138 mmboe (including approximately 25% liquids) proved plus
probable (2P) gross reserves.

 

In April 2025, obtained approval from the Ministry of Energy of the
Republic of Kazakhstan for a phased, full-field development plan extending
until 2044 (the "FDP") for the Stepnoy Leopard fields. The FDP will allow
Nostrum to deploy optimum capital allocation, whilst meeting its target
production start-up date between late 2026 and early 2027. The Company
continues to progress design and engineering works.

·      Processing of Ural O&G Products

Throughout 2024, the Company continued processing raw gas and condensate
volumes from Ural O&G, significantly contributing to the year-over-year
increases in titled production and processed volumes and the reduction in
operating expenses and G&A per barrel.

 

HSE & ESG

·      Zero fatalities among employees and contractors during operations
in FY 2024 (FY 2023: one contractor fatality during operations).

·      Total Recordable Incidents Rate (incidents per million man-hours)
of 0.63 for FY 2024 (FY 2023: 0.75).

·      Zero Lost Time Injury Rate (incidents per million man-hours) for
FY 2024 (FY 2023: 0.37).

·      4,136 tonnes of air emissions emitted in 2024 against 5,995
tonnes permitted for FY 2024 under the Kazakhstan Environmental Code.

·      28% reduction in emission intensity: 35,282 tCO₂/mmboe of
processed volumes in FY 2024 (FY 2023: 48,913 tCO₂/mmboe).

·      In January 2025, Nostrum received an updated ESG Risk Rating of
31.0 based on the 2024 annual review from the international rating agency
Sustainalytics. The rating places the Company in the 11th percentile among
global Oil & Gas Producers in the Sustainalytics universe, reflecting our
focus on responsible operations.

 

2025 Production Guidance

2025 average daily production for the Chinarevskoye field is forecast at 5,500
- 6,500 boepd.

 

Results materials for FY 2024

The Company's results materials will be available to download on Nostrum's
website.

 

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

Download: FY 2024 Annual Report
(https://www.nostrumoilandgas.com/investors/reports-presentations/)

 

Notes to press release

(1) EBITDA is a non-IFRS measure and is defined as profit before tax and
before depreciation, depletion and amortisation, share-based compensation,
foreign exchange gains / losses, finance costs, interest income, other income,
other expenses, and one-off items.

 

(2) Net debt is defined as total debt (notes payable and accumulated
interest) minus cash and cash equivalents and DSRA.

 

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
 

Galyna Kulachek

Amelia Thorn

+ 44 (0) 207 457 2020

nostrum@instinctif.com (mailto:nostrum@instinctif.com)

 

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 Positiv
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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