TIDMNOG
RNS Number : 0466U
Nostrum Oil & Gas PLC
21 November 2023
FOR IMMEDIATE RELEASE
London, 21 November 2023
Financial Results for the third quarter and nine months ended 30
September 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 for the third quarter
and nine months ended 30 September 2023 (the "Results").
Nostrum management will present the Results and be available for
a Q&A session with analysts and investors today, 21 November
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
9M 2023 Highlights:
Financial
-- Revenue of US$88.8m (9M 2022: US$155.6m), a 43% decrease
reflecting production decline in line with management expectations
and relatively lower average product prices (average Brent oil
price of US$81.9/bbl for 9M 2023 vs US$102.5/bbl for 9M 2022).
-- EBITDA(1) of US$33.0m (9M 2022: US$94.9m) and an EBITDA
margin of 37.1% (9M 2022: 61.0%), both decreasing as a result of
lower revenues and a largely fixed operating cost base.
-- The Group's unrestricted cash balance as at 30 September 2023
was US$171.7m (30 June 2023: US$192.0m), the quarterly reduction
due primarily to the US$19.3m acquisition payment for the Company's
80% interest in Positive Invest LLP. The Group's restricted cash
balance as at 30 September 2023 was US$24.6m (30 June 2023:
US$16.3m).
-- While the Group is focused on future growth opportunities to
fill the spare capacity of its gas processing infrastructure, the
management also continues to focus on cost optimisation to help
maintain its liquidity and cash reserves.
Operational
-- Daily production after treatment averaged 10,288 boepd (9M
2022: 13,684 boepd). The 2023 forecast average daily production
remains in the range of 9,000-10,000 boepd.
-- Average daily sales of 9,096 boepd (9M 2022: 12,780 boepd).
-- In September 2023, the Company commenced appraisal campaign
at the Stepnoy Leopard fields (2) to re-enter two existing wells in
the Teplovskoye reservoir to take representative fluid samples and
conduct Extended Well Testing. The data will help to confirm the
commercial potential of the field and support the future decision
related to the selection of a phased field development concept in
2024.
-- In September 2023, Nostrum successfully completed the
re-start of its c.$750 million state-of-the-art GTU-3 gas plant
with a processing capacity of 2.5 billion cubic meters per annum.
Subsequent to commissioning and start-up of the plant in 2019, the
Company completed the modifications and other works on GTU-3, which
also reduced the plant operating turndown capacity. GTU-3 employs
cutting-edge turbo-expander technology enabling improved efficiency
in the extraction of LPG, and it is operating as designed
delivering dry gas, LPG, and condensate to sales
specifications.
-- In August 2023, the Company's 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 the analysis of the
Field Development Plan and obligations under its production sharing
agreement for the field. 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.
-- In July 2023, the Group successfully launched its Gaslift
system expansion with the new compressor, doubling its capacity and
helping to partially offset production decline from its maturing
Chinarevkoye field. The production gains to date exceed the
management's expectations and are reflected in Q3-2023 production
volumes.
-- The Group continues its well and reservoir management
strategy through well workovers and rigless well intervention in
2023.
-- 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.
-- 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, entities and products
that are subject to sanctions to ensure compliance by the Group
with all applicable sanctions and to ensure 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 for the 9M 2023 (9M 2022: zero).
-- Zero Lost Time Injury for the 9M 2023 (9M 2022: zero).
-- One Total Recordable Incident for the 9M 2023 (9M 2022: four).
-- 3,347 tonnes of GHG and non-GHG air emissions for the 9M 2023
against 6,309 tonnes permitted for 2023 under the Kazakhstan
Environmental Code.
-- As part of the Company's Environment Protection Plan and in
support of the Republic of Kazakhstan's ecology improvement
objectives, over 400 trees have been planted in October in
Beles.
Arfan Khan, Chief Executive Officer of Nostrum Oil & Gas,
commented:
"During this reporting period, we completed several significant
milestones which will contribute to ramping up our future
production, including the re-start of our state-of-the-art GTU-3
gas plant, expansion of the Gaslift system, launch of the appraisal
campaign at our newly acquired Stepnoy Leopard fields as well as
the approval of the limited-scale drilling programme for the
Chinarevskoye field.
We continue with the implementation of our growth strategy and
our plans to further improve our liquidity position by taking
advantage of our world-class infrastructure, and ultimately
bringing our potentials to fruition for our stakeholders."
Sales volumes
The sales volume split for the 9M 2023 was as follows:
Products 9M 2023 9M 2023 9M 2022 9M 2022
volumes product mix volumes product mix
(boepd) (%) (boepd) (%)
Crude Oil 2,731 30.0% 2,926 22.9%
-------- ------------ -------- ------------
Stabilised Condensate 1,963 21.6% 3,080 24.1%
-------- ------------ -------- ------------
LPG (Liquid Petroleum
Gas) 1,325 14.6% 1,778 13.9%
-------- ------------ -------- ------------
Dry Gas 3,077 33.8% 4,996 39.1%
-------- ------------ -------- ------------
Total 9,096 100.0% 12,780 100.0%
-------- ------------ -------- ------------
The difference between production and sales volumes is primarily
due to the internal consumption of gas.
The Company's results materials are available to download on
Nostrum's website:
Download: 9M 2023 Results Presentation
Download: 9M 2023 Interim Condensed Consolidated Financial
Statements
Notes to press release
(1) EBITDA is a non-IFRS measure that the Company uses to
measure and monitor performance defined as profit before tax net of
finance costs, impairment, foreign exchange loss/gain, ESOP,
depreciation, interest income, other income and expenses.
(2) Positive Invest LLP holds the subsoil use right to the
contract No. 25 for estimation, development and production of
hydrocarbons for the area "Kamenskoe" and the development area
"Kamensko-Teplovsko-Tokarevskoe" (the "Stepnoy Leopard Fields") in
the West Kazakhstan region of the Republic of Kazakhstan dated 3
March 1995.
LEI: 2138007VWEP4MM3J8B29
Further information
For further information please visit
www.nostrumoilandgas.com
Further enquiries
Nostrum Oil & Gas Plc
Petro Mychalkiw
Chief Financial Officer
ir@nog.co.uk
Instinctif Partners - UK
Guy Scarborough
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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