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London, 29 January 2024
Operational Update for the year ended 31 December 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 operational update in respect of the year ended 31 December 2023 and provides production guidance for 2024. This update is being issued in advance of the release of Nostrum's consolidated accounts for the same period and is therefore, at this stage, unaudited.
Arfan Khan, Chief Executive Officer of Nostrum Oil & Gas PLC, commented:
"During the 2023 reporting period, we were delighted to achieve several significant operational milestones across all our assets as part of the implementation of our mixed-asset energy strategy. In particular, the launch of the appraisal campaign at our newly acquired Stepnoy Leopard fields, the flawless re-start of our state-of-the-art GTU-3 gas plant, the receipt of the first ever third-party feedstock into our gas treatment facility, the expansion of the Gaslift system to reduce the production decline from our maturing field, as well as the approval of the limited-scale drilling programme for our maturing Chinarevskoye field.
We will continue building on this momentum in 2024 to expand and unlock further opportunities for all our stakeholders."
FY2023 Highlights:
Operational
· Chinarevskoye field
· Daily production averaged 10,091 boepd (2022: 13,200 boepd).
· Daily sales volumes averaged 8,874 boepd (2022: 12,524 boepd). The sales volume split was as follows:
| Products | 2023 volumes (boepd) | 2023 product mix (%) | 2022 volumes (boepd) | 2022 product mix (%) |
| Crude Oil | 2,702 | 30.4% | 3,127 | 25.0% |
| Stabilised Condensate | 1,969 | 22.2% | 3,045 | 24.3% |
| LPG (Liquid Petroleum Gas) | 1,259 | 14.2% | 1,665 | 13.3% |
| Dry Gas | 2,944 | 33.2% | 4,687 | 37.4% |
| Total | 8,874 | 100.0% | 12,524 | 100.0% |
The difference between production and sales volumes is primarily due to the internal consumption of gas.
On 23 July: successfully launched the expansion of Gas lift system which doubled its capacity and helped to slow down the production decline from the maturing Chinarevskoye field.
On 19 December: commenced re-entry drilling operations, in line with the licence commitments and field development plan of the Company's subsidiary Zhaikmunai LLP. 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.
· Stepnoy Leopard fields
On 17 July: completed the acquisition of an 80% interest in Positiv Invest LLP, which holds the subsoil use right for the Stepnoy Leopard fields.
On 29 September: launched the Stepnoy Leopard fields appraisal programme to confirm the commercial potential, support future field development decision making and the reclassification of certain of the hydrocarbon resources into reserves.
· Ural OG processing
On 21 December: successfully received first gas from the Ural Oil & Gas LLP ("Ural OG") Rozhkovskoye field U-21 well for treatment into Nostrum's gas processing facility, with the remaining planned four wells to commence in late 2024. A further update will be provided in the Company's Q1 2024 results.
· GTU-3 re-start
On 4 September: successfully re-started Nostrum's c.$750 million state-of-the-art GTU-3 gas plant, with 2.5 billion cubic metres per annum gas processing capacity. The Company completed the modifications and other works on GTU-3 subsequent to its commissioning and start-up in 2019.
Financial
· Full year revenues, in line with expectations, to be in excess of US$118m (2022: US$199.7m), lower year on year by virtue of anticipated declining production and relatively lower average product prices (Brent price averaged US$82/bbl in 2023 vs US$101/bbl in 2022).
· The Group's unrestricted consolidated cash balance as at 31 December 2023 was in excess of US$161m (31 December 2022: US$233.6m), annual reduction due to payment of 2022 coupon on completion of Restructuring, payment for acquisition of Stepnoy Leopard fields, and payments arising from 2016-2021 tax audit. The Group's restricted cash balance as at 31 December 2023 was in excess of US$25m (31 December 2022: US$31.0m), comprised of the debt-service retention account and liquidation fund deposits.
· On 9 February 2023, the Group completed the bond restructuring initially announced on 23 December 2021 (the "Restructuring") and the related lock-up and forbearance arrangements were terminated.
· The Group continues to focus on cost optimisation to help manage liquidity.
Sustainability, HSE
· One contractor fatality during operations for 2023 (2022: zero).
· One Lost Time Injury ("LTI") for 2023 (2022: zero)
· Two Total Recordable Incidents ("TRI") for 2023 (2022: four).
· 4,987 tonnes of air emissions emitted for 2023 against 6,309 tonnes permitted for 2023 under the Kazakhstan Environmental Code.
· Safety of all staff and contractors as well as focus on conducting sustainable operations remain the Group's priority.
2024 production guidance
· Chinarevskoye field average daily production forecast for 2024 is in the range of 7,000-8,000 boepd.
Release of Nostrum's 2023 Financial Results
Nostrum plans to release its annual report and audited financial statements in respect of the financial year ended 31 December 2023 on or around 26 March 2024.
LEI: 2138007VWEP4MM3J8B29
Further information
For further information please visit www.nostrumoilandgas.com
Further enquiries
Nostrum Oil & Gas PLC
Petro Mychalkiw
Chief Financial Officer
Instinctif Partners - UK
Guy Scarborough
Vivian Lai
+ 44 (0) 207 457 2020
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 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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