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
THIS ANNOUNCEMENT CONTAINS INSIDE
INFORMATION
London, 19 April 2024
Full Year Results for the
Year Ended 31 December 2023
Delivering our mixed-asset
energy strategy
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, is pleased to announce its
consolidated full year financial results for the twelve months
ended 31 December 2023 ("FY 2023"), together with the
publication of its 2023 Annual Report.
Nostrum's management team will
present the FY 2023 Results and will be available for a Q&A
session with analysts and investors at 2pm UK time, 22 April 2024.
If you would like to participate in this call, please register by
clicking on the following link and following instructions:
Results Call
Arfan Khan, Chief Executive Officer of Nostrum Oil &
Gas, commented:
"2023 has been a transformative year for Nostrum, as it
commenced execution of its mixed-asset energy strategy by
implementing key catalyst projects.
We
successfully completed the restructuring of our bonds, leading to a
strengthened balance sheet and helping to safeguard our cash
reserves. This financial stability enabled us to expand our
upstream portfolio, notably through the acquisition of the Stepnoy
Leopard fields and commencement of a limited-scale drilling program
at the Chinarevskoye field. In our midstream business, we achieved
a major milestone by starting to process third-party feedstock from
Ural Oil & Gas ("Ural O&G") in our gas treatment
facility.
The financial performance of the Group in 2023 was helped by
the improved production performance from the gas-lift expansion and
improved netbacks under new off-take agreements. However, revenues
decreased year-on-year by 40% due to the continued high production
declines of the mature Chinarevskoye field, in combination with
lower average Brent prices of $82/bbl compared with $101/bbl for
2022. Consequently, our EBITDA was reduced to US$42 million, with
an EBITDA margin of 35.2%, reflecting the impact of reduced
revenues against a largely fixed operating cost
base.
In
2023, we further strengthened our ESG task force. As evaluated by
Sustainalytics, our ESG Risk Rating improved to 30.1 from 40.1 in
2022, transitioning Nostrum to within 0.1 point of the "Medium
Risk" categoryand ranking Nostrum among the top 10% best ESG
performing companies in the Oil & Gas Exploration and
Production sector according to Sustainalytics
ranking.
As
we transition into 2024, I am enthusiastic about the future and the
forthcoming commercial opportunities. Nostrum is poised to advance
its strategic objectives, contributing to regional development,
supporting Kazakhstan's energy transition, and enhancing value for
our investors and stakeholders."
2023 Highlights
Financial
· Revenues of US$119.6m with average 2023 Brent prices of
US$82/bbl (FY2022: revenues of US$199.7m, average Brent price of
US$101/bbl). From 2023, the Company negated
the adverse impact of Urals-Brent spread on oil and gas condensate
exports, by using alternative delivery routes and destinations
which resulted in improved netbacks in 2023 vs 2022.
· EBITDA1 of US$42.1m (2022: US$115.7m) and
EBITDA1 margin of 35.2% (FY2022: 57.9%).
· Unrestricted cash position at 31 December 2023 of US$161.7m
(31 December 2022: US$233.6m). US$25.2m remained as restricted cash
at 31 December 2023 (31 December 2022: US$31.0m), including
US$16.5m held in a debt service retention account under the terms
of the bond trust deeds (31 December 2022: US$22.8m in escrow
account under the forbearance agreement).
· The
Group continued focusing on cost optimisation to help manage
liquidity, with increases necessary to support the growth projects
such as Ural O&G processing and Stepnoy Leopard appraisal and
project development.
Operational
Chinarevskoye Field
· Daily
production after treatment averaged 10,091 boepd (2022: 13,200
boepd).
· Daily
sales volumes averaged 8,874 boepd (2022: 12,524 boepd).
·
Two-well drilling programme commenced to keep the
balance between investment in risk-based opportunities and
maintaining our license commitments for the Chinarevskoye
field.
·
Successfully launched the expansion of Gas lift
system, almost doubling thew total field gas lift capacity and
helped to slow down the production decline from the Chinarevskoye
field.
· Total
Proven plus Probable ("2P") reserves of 23.2 million barrels of oil
equivalent ("mmboe") and together with 8.2 mmboe of Possible
reserves a total "3P" reserves of 31.4 mmboe, based on the
management's estimates updated from the annual reserves audit
conducted by Ryder Scott as of 31 December 2022.
Stepnoy Leopard Fields
· Acquisition of 80% stake in Positiv Invest LLP for a cost of
US$20 million, commencing the transition to a multi-asset
company.
· 2-well
appraisal programme close to completion.
· Final
Investment Decision approved for the initial field development
phase of the Stepnoy Leopard fields, budgeted at US$100 million
gross and planned to be financed from the Company's own cash
reserves and forecast project cashflows.
Ural Oil & Gas Processing
The tie-back project commenced with
300 th.m3 of raw gas per day from U-21 well in December
2023 and continues to ramp-up. Ural O&G plan to connect an
additional four wells during H2 2024 with an estimated 1.5mn
m3 of raw gas per day from these four wells.
This collaboration with Ural O&G
represents a pivotal moment for us as we expand the utilisation of
our world-class treatment facilities and position ourselves as a
preferred partner for handling and processing third-party gas in
Western Kazakhstan. Our state-of-the-art infrastructure is designed
to process up to 4.2 bcm per annum or more of third-party gas,
offering faster processing solutions at significantly reduced costs
compared to other alternatives. The realisation of the Ural O&G
tie-back project is a proof-of- concept for commercialisation of
the stranded gas-fields in West Kazakhstan that would otherwise not
be economic as stand-alone developments.
GTU-3 Gas Plant Re-start
The Company successfully re-started
its c.$750 million state-of-the-art GTU-3 gas plant, with an
additional 2.5 billion cubic metres per annum gas processing
capacity and resulting in improved efficiency in the extraction of
LPG by 15%-20%.
ESG
· Total
Recordable Incidents Rate ("TRIR") of 0.75 for 2023
(2022:1.56).
· Lost
Time Injury Rate ("LTIR") of 0.37 for 2023 (2022: zero).
· Road
Traffic Incidents Rate ("RTI") rate of zero.
· One
contractor fatality in a height-related incident. The Company
undertook a comprehensive investigation and implemented measures to
avoid such incidents in the future.
· ESG
Risk Rating, from the from the
international rating agency Sustainalytics, improved to 30.1 from 40.1 in 2022, transitioning Nostrum to
within 0.1 point of the "Medium Risk" category and ranking Nostrum
among the top 10% best ESG performing companies in the Oil &
Gas Exploration and Production sector according to Sustainalytics
ranking.
· Nostrum joined the National ESG-Club in 2023 which unites
companies that are leaders in ESG transformation in their
industries and who actively promote the principles of sustainable
development in Kazakhstan.
· Nostrum obtained "B-" score for the climate change module and
"B-" for water security module (according to CPD score
reports).
2024 Q1 results
· The
Company plans to release its unaudited and unreviewed interim
condensed consolidated accounts for the three months ending 31
March 2024 on or around 31 May 2024.
The Company's results materials will
be available to download on Nostrum's website.
Notes to press release
1
EBITDA is defined as profit before
tax + non-recurring expenses + finance costs + foreign exchange
loss/(gain) + employee share-option adjustments + depreciation -
interest income + other expenses/(income).
LEI: 2138007VWEP4MM3J8B29
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
Notifying person
Thomas Hartnett
Company Secretary
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, 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.