REG - Nostrum Oil & Gas - Operational Update for Q4 and FY2024

Nostrum Oil & GasAnnouncement

31/01/2025 07:00

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RNS Number : 3581V  Nostrum Oil & Gas PLC  31 January 2025

 

 

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, 31 January 2025

 

Operational Update for the fourth quarter and 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, today announces its operational update for the year ended 31
December 2024, and provides production guidance for 2025. This update is being
issued in advance of the release of Nostrum's audited consolidated accounts
for the same period. All financial information disclosed remains draft subject
to the finalization of Nostrum's year-end external audit.

 

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

 

"I am pleased to share the Group's key operational results for the full-year
2024, reflecting the continued progress in delivering of our mixed-asset
energy strategy, whilst maintaining strong operational and financial
discipline.

 

We have been able to increase topline revenues by over 14% year-on-year
despite the production decline from our mature Chinarevskoye field. We
generated healthier operating cash inflows and further underpinned our cash
reserves notwithstanding capital expenditures on growth activities such as
Chinarevskoye drilling and Stepnoy Leopard field development. Nostrum almost
doubled its total processed volumes year-on-year, thanks to the operational
excellence in handling and processing of raw gas from Ural O&G, new
production from well No.301, enhancements to our facilities including the
doubling of the Gaslift capacity and the restart of our state-of-the-art 2.5
bcma GTU-3.

 

We remain committed to driving sustainable growth and delivering on our
strategic objectives that maximize value for our investors, and we look
forward to delivering our final audited full year results in April 2025."

 

FY 2024 Highlights:

 

Operational

·      Production and sales

·      A 48% increase in average daily title production volumes (i.e.
final products owned by Nostrum) to 14,935 boepd in 2024 (10,091 boepd in
2023). A 97% increase in total processed volumes (including third party
condensate tolling volumes) in 2024, compared to 2023. These increases in
production and processed volumes were mainly due to:

o  Processing of raw gas received from Ural Oil & Gas LLP ("Ural
O&G"), commencing from December 2023;

 

o  Production from well No.301 which was completed and put into production in
May 2024;

 

o  Full year contribution from:

 

o  Gas-lift system expansion, which was successfully launched in July 2023
doubling its capacity and continued to perform above management expectations;

 

o  Additional 26% LPG yield from GTU-3, which has been in operation since
September 2023.

 

·      The title production volume split was as follows:

 Products                    2024      2023      Y-on-Y change      2024          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 in
2024 (8,874 boepd in 2023). 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

Most of the scope planned under the drilling programme was executed on time
and within budget in 2024. 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 early 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 and a first test provided non-commercial inflow
rates in the Devonian target horizon. Evaluation of other perforation targets
is underway.

 

·      Stepnoy Leopard Fields

Several key milestones were achieved in relation to the Stepnoy Leopard Fields
in 2024. In early 2024, successful completion of the two-well appraisal
programme supported the final investment decision for the initial development
phase. This was followed by the Competent Person's Report in July 2024,
confirming 138 mmboe (including approximately 25% liquids) proved plus
probable (2P) gross reserves. The Company continues to refine the field
development project schedule and progress the design and engineering works.

 

·      Processing of Ural O&G products

Throughout 2024 the Company continued processing Ural O&G raw gas. As
announced by KazMunayGas on 26 December 2024, Ural O&G production from the
beginning of 2024 reached 215 thousand tonnes of condensate and 290 million
cubic meters of gas, and the launch of all wells will facilitate daily
production of 1.5 million cubic meters of gas, which annualizes to more than
500 million cubic meters per year.

Financial (unaudited)

Successful execution of the Group's new mixed-asset energy strategy resulting
in:

·      Over 14% expected increase in revenue, exceeding US$137 million
for 2024 (2023: US$119.6 million). This is due to increased processing,
production and sales volumes. Brent crude oil price slightly decreased from an
average of US$82.5/bbl in 2023 to an average of US$80.6/bbl in 2024.

 

·      Unrestricted cash balance at 31 December 2024 in excess of US$150
million (31 December 2023: US$161.7 million). The restricted cash balance
(DSRA and asset liquidation fund) was in excess of US$25 million at 31
December 2024 (31 December 2023: US$25.2 million).

 

·      A healthy net positive operating cashflow generated in 2024,
before non-recurring items. However, capital expenditures on the Chinarevskoye
drilling programme and Stepnoy Leopard appraisal works, as well as the
semi-annual bond coupon payments in June and December 2024, led to an
approximate US$11 million reduction in the Group's unrestricted cash balance
during 2024.

 

·      Continued focus on maximising facility uptime, controlling costs
where possible and improving efficiencies across all facets of our business,
while allocating and efficiently utilising resources on growth projects.

 

Sustainability and HSE

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

 

·      Total Recordable Incidents Rate (incidents per million man-hours)
of 0.63 for 2024 (2023: 0.80).

 

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

 

·      4,141 tonnes of air emissions emitted in 2024 against 5,983
tonnes permitted for 2024 under the Kazakhstan Environmental Code.

 

2025 production guidance

 

·      Chinarevskoye field average daily production 2025 forecast is in
the range of 5,500 - 6,500 boepd.

 

Release of Nostrum's 2024 Financial Results

 

Nostrum plans to release its annual report and audited financial statements in
respect of the financial year ended 31 December 2024 on or around 22 April
2025.

 

 

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)

 

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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