NOG Nostrum Oil & Gas Plc

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 October 2024

Operational Update for the third quarter and nine months ended 30 September 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 third quarter and nine months ended 30 September 2024.

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

"Our positive results for the third quarter and first nine month of 2024 were driven by strong operational performance and continued progress in delivering of our new mixed-asset energy strategy. We are pleased with the 34% increase in our average daily production and over 70% increase in the total processed volumes compared to the same period last year. These were achieved thanks to enhancements to our facilities including the Gaslift expansion and GTU3 restart, additional product volumes from the new well (301), as well as processing of raw gas from Ural O&G.

These improvements in production and processing volumes resulted in revenues of approximately US$101 million for the first nine month of 2024, which together with our tight cost control, maintained EBITDA at almost the same level as the same period last year despite the continuing production decline of our mature Chinarevskoye field. These positive operating results also generated healthy net operating cash inflows, which helped to preserve cash reserves, notwithstanding investments in the drilling operations.

We continued progressing our upstream activities by further refining the field development project schedule and advancing the design and engineering works on Stepnoy Leopard Fields, and by completing the drilling of the second well at the Chinarevskoye field.

We remain committed to delivering on our strategic objectives that maximize value for our shareholders."

9M 2024 Highlights:

Operational

·      Production and sales

·      Average daily production increased by 34% to 13,758 boepd (9M 2023: 10,288 boepd), and the total processed volumes (including condensate tolling volumes) increased by over 70% compared to 9M 2023. Such increase in production and processed volumes was mainly due to:

o  Additional product volumes from processing raw gas received from Ural Oil & Gas LLP ("Ural O&G");

o  Production from well No.301 from end of May 2024;

o  Gas-lift system expansion continues to perform above management expectations. It was successfully launched in July 2023 doubling its capacity and continues to help to slow down the production decline from the maturing Chinarevskoye field;

o  Continuing operation of GTU-3 yielding additional 20% LPG owing to its cutting-edge turbo- expander technology.

·      The title production volume split for 9M 2024 was as follows:

*Stabilised condensate volumes exclude Ural O&G processed volumes for which Nostrum receives a tolling fee

·      Daily sales volumes averaged 11,956 boepd for 9M 2024 (9M 2023: 9,096 boepd). The difference between production and sales volumes is primarily due to the internal consumption of dry gas produced and may also include inventory increases or decreases at period end.

·      Chinarevskoye drilling programme

Well No.301 was drilled on time and within budget, and put into production in May 2024 with initial flow rates in line with the management's expectations. The well targeted multiple in-fill zones across the Carboniferous and Devonian reservoirs and encountered hydrocarbons (oil, gas-condensate) in all three key intervals reaching a total depth of 4,980 meters. The well was perforated in the lowest of these reservoirs with the plan to perforate the Tournasian reservoir in early 2025.

Well No.41 appraisal sidetrack work, which carried a significant level of uncertainty and risk as the subsurface targets contained multiple exploration, appraisal, and development objectives, was completed in September 2024. It did not encounter the primary Devonian target horizon. However, it discovered a new Devonian hydrocarbon-bearing horizon which is planned to be perforated in Q4 2024.

·      Stepnoy Leopard Fields

Following the final investment decision for the initial development phase of the Stepnoy Leopard Fields in early 2024, in July 2024 Nostrum released the Competent Person's Report on Stepnoy Leopard Fields, an independent evaluation of reserves and resources as of 1 January 2024 prepared by Xodus Group Limited, 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.

·      Ural O&G volumes

Throughout 9M 2024 the Company continued processing Ural O&G raw gas, initially from one  well in their Rozhkovskoye field. According to Ural O&G, with the tie-back of additional wells the total production volumes are expected to reach 1.5 million cubic meters of raw gas per day by the end of 2024.

Financial

·      9M 2024 revenues are estimated to be approximately US$101 million, a 14% increase compared to US$88.8 million in 9M 2023, resulting from increased production and sales volumes. Brent crude oil price slightly increased from an average of US$81.9/bbl in 9M 2023 to an average of US$82.6/bbl in 9M 2024.

·      The Group's EBITDA continues to improve despite the continuing decline of the mature Chinarevskoye field aided by third-party processing and prudent cost management. EBITDA increased by approximately 3% from $33.0 million in 9M 2023 to approximately $34 million in 9M 2024.

·      The Group's unrestricted cash balance as at 30 September 2024 was in excess of US$155 million, which includes the impact of non-recurring items (30 June 2024 US$142 million; 31 December 2023 US$161.7 million). The restricted cash balance (DSRA and asset liquidation fund) was in excess of US$25 million as at 30 September 2024 (30 June 2024 US$25 million).

·      During 9M 2024 the Group continued to generate net positive operating cashflows. However, committed capital expenditures on Chinarevskoye drilling programme and Stepnoy Leopard appraisal works, as well as the semi-annual bond coupon payment in June 2024, led to an approximate $6 million reduction in the Group's unrestricted cash balance during 9M 2024.

·      The Group continues to 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 9M 2024 (9M 2023: zero).

·      Total Recordable Incidents Rate (incidents per million man-hours) of 0.84 for 9M 2024 (9M 2023:1.0).

·      Zero Lost Time Injury Rate (incidents per million man-hours) for 9M 2024 (9M 2023: zero).

·      3,222 tonnes of air emissions emitted in 9M 2024 against 5,983 tonnes permitted for 2024 under the Kazakhstan Environmental Code.

Release of Nostrum's 9M 2024 Financial Results

Nostrum plans to release its unaudited interim condensed consolidated accounts for the period ending 30 September 2024 on or around 19 November 2024.

LEI: 2138007VWEP4MM3J8B29

Further information

For further information please visit https://www.nostrumoilandgas.com/

Further enquiries

Nostrum Oil & Gas PLC                                                

Petro Mychalkiw

Chief Financial Officer

ir@nog.co.uk                                                                                                     

Instinctif Partners - UK                                                                                        

Galyna Kulachek

+ 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 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.