30th Jul 2019 10:11
(Alliance News) - Nostrum Oil & Gas PLC is continuing to work on its strategic review, it said on Tuesday, following a first-half production performance in line with expectations.
Nostrum, which operates in Kazakhstan's pre-Caspian basin, at the end of June said it was considering a sale of the company, as it looks to best develop its assets and deliver growth.
"Following the successful completion of these milestones, the company has identified a broad range of operational and strategic opportunities for the business to deliver shareholder value, some of which require the investment of further capital in the business," said Nostrum.
"These options include further throughput agreements with third party gas suppliers, bolt-on acquisitions in existing and adjacent fields, farming down stakes in some assets to expedite their development, and a corporate transaction."
On the operational front, Nostrum's average production for the six months to June was 31,096 barrels of oil equivalent per day, with average sales volume of 29,210 barrels.
A year prior, average production was 32,524 barrels and average sales volume was 29,886 barrels.
As a result, Nostrum's interim revenue is expected to fall 8.9% to USD174 million, but its cash position should improve by at least 59% from March-end to USD120 million.
Nostrum held production guidance for 2019 at 30,000 barrels of oil equivalent per day, with sales at 28,000 barrels. Average output in 2018 was 31,254 barrels of oil equivalent a day.
Elsewhere, Nostrum is progressing with commissioning of the gas treatment unit, with full commissioning to be completed by the end of the third quarter of 2019.
Chief Executive Kai-Uwe Kessel said: "First half production was in line with expectations. Gas treatment unit three continues to progress with hot commissioning now underway and final commissioning targeted for the end of third quarter 2019.
"Financially the first half was positive as production was in line with expectations and product prices were higher than our budget leading to higher than forecast revenue and operating cash flow."
Nostrum shares were 0.9% lower on Tuesday at a price of 45.23 pence each.
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