TIDMNOG
RNS Number : 1887D
Nostrum Oil & Gas PLC
25 April 2017
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
Amsterdam, 25 April 2017
Operational Update for the First Quarter ending 31 March
2017
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, today announces its operational update for the
three month period ending 31 March 2017. This update is being
issued in advance of the release of Nostrum's consolidated accounts
for the same period. The information contained in this update
remains subject to review by the independent auditors.
Highlights:
Operational
-- Q1 2017 total production of 4.4 mmboe; average daily production of 48,743 boepd
-- The construction of the third Gas Treatment Unit ("GTU3") continues in line with guidance to be completed before
the end of 2017
-- KazTransOil ("KTO") pipeline connection has been completed by Nostrum and is awaiting finalisation of the tie to
the KTO pipeline. This work is carried out by KTO and is expected to be completed in the coming weeks.
Financial
-- Revenues expected to be in excess of US$110 million (Q1 2016: US$73.9 million)
-- Cash position in excess of $120 million (Q1 2016: US$137.1 million)
-- Total debt of US$964.1 million and net debt of approximately US$840.0 million
Kai-Uwe Kessel, Chief Executive Officer of Nostrum Oil &
Gas, commented:
The first quarter of 2017 has started strongly with average
daily production at over 48,000 boepd and oil prices averaging
above US$50. Our 2017 drilling programme is under way and the KTO
pipeline connection is almost complete such that we look forward to
significantly reducing our exported crude oil transportation costs
in the coming weeks.
We are pleased to report that steady progress continues on GTU3,
with completion continuing to be expected before the end of 2017.
As we get close to the completion date we are pushing hard to
ensure that we have all the man-power necessary to avoid any
delays. Now that the winter months are behind us we can focus on
getting everything ready for commissioning towards the end of the
year. We are keeping a close eye on the weekly performance and will
take all necessary action to ensure the plant is complete as
quickly as possible in order to benefit from the additional cash
flows it will generate. We expect remaining payments on GTU3 to be
between US$100m and US$130m to be paid depending on the speed of
completion.
The strengthening oil price environment and continued efficiency
measures being undertaken throughout the company allow us to be
optimistic that 2017 can be a good year for the company both
operationally and financially.
Sales volumes
The sales volumes split for Q1 2017 was as follows:
Products Q1 2017 sales volumes Q1 2017 Product Mix (%)
(boepd)
---------------------------------- --------------------- -----------------------
Crude Oil & Stabilised Condensate 17,180 40
---------------------------------- --------------------- -----------------------
LPG (Liquid Petroleum Gas) 5,350 12
---------------------------------- --------------------- -----------------------
Dry Gas 20,749 48
---------------------------------- --------------------- -----------------------
Total 43,279* 100
---------------------------------- --------------------- -----------------------
*The difference between true production and the sales volumes
are as a result from part of the dry gas being used for internal
consumption (power generation), gas lift and some losses during raw
gas treatment.
Current product destinations
Nostrum's primary export destinations remain as follows:
-- Crude oil - A combination between Finland, Belarus and Azerbaijan. 85% is exported and 15% is sold domestically
-- Condensate - Russian Black Sea port of Taman, 100% is exported
-- LPG - Russian Black Sea ports, Central Asia and Eastern Europe
-- Dry gas - All gas is sold at the connection point to the Intergas Central Asia pipeline
Drilling
-- 43 wells currently producing at the Chinarevskoye field - 22 oil wells and 21 gas condensate wells
-- An extension to the exploration license has been submitted for the Rostoshinskoye field and an appraisal well at
Rostoshinskoye is pending a flaring permit before testing can start
Production schedule
-- 2017: average above 44,000 boepd; exit rate between 50,000 and 60,000 boepd
-- 2018: 50,000 - 80,000 boepd
-- 2019: 80,000 - 100,000 boepd
Should oil prices deviate materially the production guidance
will be updated accordingly.
Progress on development of GTU3
Steady progress continues to be made on GTU3 and completion
remains scheduled for 2017. Nostrum responded to a period of
decline in the oil price from H2 2015 by phasing GTU3 payments over
2016 and 2017 in order to match the payment profile of the hedge
put in place in December 2015. The phasing of payments at no
additional cost allowed for a continued preservation of cash on the
balance sheet during this period of low oil prices. We remain
vigilant to ensure that costs are kept to a minimum but also ensure
that we have sufficient man-power available to complete the plant
in 2017.
Board changes
Mr Frank Monstrey resigned from his position as Nostrum Chairman
and member of the Board of Directors effective from 17 April 2017.
Mr Monstrey took the decision to step down from the Board at this
time to ensure that a court order affecting certain other companies
that he controls does not indirectly further affect Nostrum or any
of its strategic initiatives.
Mr Mark Martin has been appointed by the Board as its Chairman
from 18 April 2017 after having previously served as Nostrum's
Senior Independent Director. For further information please see:
Board Changes.
Further information
For further information please visit www.nog.co.uk
Further enquiries
Nostrum Oil & Gas PLC - Investor Relations
Kirsty Hamilton-Smith
Amy Barlow
+44 203 740 7433
ir@nog.co.uk
Instinctif Partners - UK
David Simonson
George Yeomans
+ 44 (0) 207 457 2020
Promo Group Communications - Kazakhstan
Asel Karaulova
Irina Noskova
+ 7 (727) 264 67 37
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). 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 approximately 60 and 120
kilometres respectively 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 Partnership 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 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 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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