REG - Nostrum O&G Finance - Parent Company H1 2020 Operational Update

PJT PartnersAnnouncement

30/07/2020 08:40

RNS Number : 5895U
  
Nostrum Oil & Gas Finance B.V.
  
30 July 2020
  
 

 
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
 
Nostrum Oil & Gas Finance B.V.
 
Parent Company Operational Update for the Second Quarter and the Six Months ending 30 June 2020
 
Amsterdam, 30 July 2020
 
Nostrum Oil & Gas Finance B.V. notes the announcement today of its parent company, Nostrum Oil & Gas PLC (LSE: NOG) ("Nostrum", or "the Company"), an independent oil and gas company engaging in the production, development and exploration of oil and gas in the pre-Caspian Basin, who today announces its operational update in respect of the six-month period ending 30 June 2020. This update is being issued in advance of the release of Nostrum's interim, condensed consolidated accounts for the same period. 
 
Highlights: 
 
Operational
·      H1 2020 average production after treatment 23,528 boepd with average sales volumes for the period of 22,624 boepd.
·      Drilling halted for 2020.  However, successful workover and well intervention activity is reducing the rate of decline previously expected in the field. 
·      Continuing focus on monetizing spare capacity by processing third party volumes.
·      Actions continue to be taken to protect the safety of all staff and mitigate any impact of COVID 19 on operations.  In particular, stringent testing and follow-up procedures are in place for all field personnel.
 
 
Financial
·      H1 2020 revenues expected to be in excess of US$92 million (H1 2019: US$174 million)
·      H1 2020 cash position in excess of US$75 million (H1 2019: US$120 million) 
·      Total debt1 expected not to exceed US$1,140 million and net debt expected not to exceed approximately US$1,065 million as at 31 March 2020.
·      Continued focus on cost optimization to help manage our liquidity.
 
1 Total debt does not include finance lease liabilities under IFRS16 Leases
 
Bond Restructuring
 
·      Rothschild & Cie appointed as financial advisers and White & Case as legal advisers to assist the Company in the restructuring of the 8.0% Senior Notes due 2022 and 7.0% Senior Notes due 2025 (together, the "Notes") issued by Nostrum Oil & Gas Finance B.V. 
 
·      PJT Partners (UK) Limited appointed as financial advisers and Akin Gump Strauss Hauer & Feld, as legal advisers to a steering committee of holders of the Notes.
 
·      On 24 July 2020, Nostrum announced that it planned to utilise the applicable grace periods for the interest payments due on 25 July 2020 and 16 August 2020 with respect to the Notes.  The 30-day grace period will allow the Company to continue active discussions with the financial and legal advisers to the steering committee of holders of the Notes with a view to entering into a forbearance agreement with the holders of the Notes in relation to those interest payments. The Company and its advisers believe that such an agreement is in the best interest of all stakeholders.
 
 
 
Kaat Van Hecke, Chief Executive Officer of Nostrum Oil & Gas, commented:
 
"The company continues to pursue its three strategic priorities: to commercialise its world class infrastructure, rationalise the cost base and understand and mitigate reservoir risk.  Discussions continue with third parties to secure additional volumes to fill the spare capacity at our gas treatment facility. Our cost reduction programme has enabled us to effectively manage our liquidity during H1 in the face of severe price volatility and I am grateful to our staff and contractors for their support.  As announced previously, we have suspended our drilling programme during 2020 however our targeted well intervention programme has demonstrated some success in reducing the expected rate of decline in production.  Whilst the potential impact of COVID 19 continues to be of concern, we have put in place stringent procedures to ensure the safety and wellbeing of our staff and minimize disruption to production and operations."
 
Sales volumes

The sales volumes split for H1 2020 was as follows:




Products


H1 2020 sales volumes
(boepd)


H1 2020 product mix (%)




Crude Oil & Stabilised Condensate 


8,991


39.7%




LPG (Liquid Petroleum Gas)


2,955


13.1%




Dry Gas


10,678


47.2%




Total


22,624


100.0%




The difference between production and sales volumes is primarily due to the internal consumption of gas
 
H1 2020 Well Stock 
·      As at 30 June 2020, the Company had 46 wells in production (21 oil wells and 25 gas-condensate wells).
 
2020 Drilling and sales volume guidance
·      The company has halted all drilling in 2020. 
·      2020 production forecast of 20,000 boepd, corresponding to sales volumes of 19,000 boepd. 
 
Release of Nostrum's H1 2020 Financial Results
Nostrum plans to release its condensed, consolidated interim accounts for H1 2020 on 18 August 2020.
 
LEI: 213800SGF6UKA42KSB50
 
Further information
For further information please visit www.nog.co.uk 
 
Further enquiries
Martin Cocker - Chief Financial Officer
ir@nog.co.uk                                                                                                     
 
Instinctif Partners - UK                                                                                        
Mark Garraway
Sarah Hourahane 
Dinara Shikhametova
+ 44 (0) 207 457 2020
nostrum@instinctif.com 
 
Promo Group Communications - Kazakhstan
Asel Karaulova
Irina Noskova    
+ 7 (727) 264 67 37                                                                                            
 
About Nostrum Oil & Gas 
Nostrum Oil & Gas Finance B.V. is the finance subsidiary of Nostrum Oil & Gas PLC, and the issuer of the Nostrum group's public debt, which is guaranteed, among other group entities, by Nostrum Oil & Gas PLC.  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). The principal producing asset of Nostrum Oil & Gas PLC is the Chinarevskoye field, in which it holds a 100% interest and is the operator through its wholly-owned subsidiary Zhaikmunai LLP. In addition, Nostrum Oil & Gas holds a 100% interest in and is the operator of the Rostoshinskoye, Darinskoye and Yuzhno-Gremyachenskoye oil and gas fields through the same subsidiary. Located in the pre-Caspian basin to the north-west of Uralsk, these exploration and development fields are situated between approximately 60 and 120 kilometres from the Chinarevskoye 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 or 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 Nostrum Oil & Gas Finance B.V., the Company or any other entity, and shareholders of the Company and bondholders of Nostrum Oil & Gas Finance B.V. are cautioned not to place undue reliance on the forward-looking statements. Save as required by the relevant listing rules and applicable law, neither Nostrum Oil & Gas Finance B.V. nor the Company undertakes to update or change any forward-looking statements to reflect events occurring after the date of this announcement.
 
 
 
 
 
This announcement has been issued through the Companies Announcement Service of Euronext Dublin.


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