25th Mar 2015 08:06
(A story published at 0800GMT mis-stated the company's dividend for the year. The correct version follows)
LONDON (Alliance News) - Nostrum Oil and Gas PLC Wednesday said its pretax profit fell in 2014 due to a slight fall in production combined with the fall in oil prices toward the end of the year.
The FTSE 250 listed oil and gas company operating in Kazakhstan reported a pretax profit of USD311.7 million for the year ended December 31, down from USD362.0 million in 2013 as revenue declined on lower oil prices in the second half.
Revenue for the year fell by 13% to USD782.0 million from USD895.0 million due to a slight fall in production and lower achieved oil prices, which fell 8.1% year-on-year. Production in 2014 fell to 16.2 million barrels of oil equivalent at an average price of USD100 per barrel from 16.9 million barrels of oil equivalent at an average price of USD108 per barrel in 2013.
"For most of the year we had a strong oil price environment. However this rapidly changed in the fourth quarter, and we need to be prudent as we enter 2015 to ensure we are ready for a sustained period of low oil prices," said Chairman Frank Monstrey.
Nostrum recorded a USD111.9 million charge related to depreciation, depletion and amortisation for the year, lower than the USD120.4 million it recorded a year earlier.
Earnings before interest, tax, depreciation and amortisation fell by over 10% to USD495 million from USD551 million.
The company proposed a final dividend for the year of USD0.27 per share, making for a full-year dividend of USD0.35 per share, up from USD0.34 per share paid in 2013.
"Nostrum continued to perform well in 2014 despite the year ending with a challenging oil price environment. We consistently delivered production of approximately 45,000 barrels of oil equivalent per day and started the appraisal programme on our 3 additional fields," said Monstrey.
Cash at the end of December totalled USD400.0 million, but net debt increased by over 40% to USD545.0 million from USD389.0 million.
The company is currently focused on bringing the GTU3 gas plant into production in 2016. The company said it has spent around USD150 million on GTU3 so far, and expects the total cost of the project to be less than USD500 million.
In 2015, Nostrum will drill eight wells at a total cost of USD90 million, three of which are already being drilled. Three production wells and one appraisal well will be drilled on the Chinarevskoye field and a further appraisal well will be drilled on the Rostoshinskoye field.
It said the drilling programme is flexible dependent on oil prices, but said based on the current programme it is expecting production in 2015 and 2016 to total 45,000 barrels of oil equivalent per day, flat from 2014 and then rise to 70,000 barrels per day in 2017 and 100,000 barrels per day in 2018.
By Joshua Warner; [email protected]; @JoshAlliance
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