29th Oct 2019 09:40
(Alliance News) - Nostrum Oil & Gas PLC on Tuesday cut its annual production guidance and said revenue is likely to have fallen in the first nine months of 2019, with declining sales volumes across all products.
The Kazakhstan-focused oil & gas firm said revenue for the nine months ended September 30 is likely to exceed USD250 million. While no precise figure was provided, this does suggest a drop in revenue from 2018's USD311.4 million nine month revenue.
Nine month sales volumes declined to 27,515 barrels of oil equivalent per day from 30,523 barrels the year before. This drop was mostly due to crude oil & stabilised condensate production falling 22% to 9,580 barrels per day from 12,217 barrels.
However, liquid petroleum gas volumes also dropped a less dramatic 5.4% to 3,680 barrels of oil equivalent per day from 3,891 boepd, while dry gas sales volumes fell 1.1% to 14,255 boepd from 14,415 boepd.
Given this less than stellar performance, Nostrum has cut its production forecast by 6.7% to 28,000 boepd from 30,000 boepd, which corresponds to a 3.6% sales volumes decline to 27,000 boepd versus 28,000 boepd previously.
Operationally, wells 42 and 41 were tested but did not produce commercial flows of hydrocarbons, while well 361 drilling is complete and testing has started.
At September 30, the company's cash was higher than USD91 million, down from USD120.8 million at the end of the first half of the year. Total debt was likely to be no higher than USD1.11 billion on September 30, with net debt likely no more than USD1.02 billion.
Chief Executive Kai-Uwe Kessel said: "I am pleased to confirm that during October we concluded the 72 hour test of GTU3 and as a result can confirm it is commissioned. I can also report that both Schlumberger and PM Lucas have delivered their analysis of the Biski North East & West and the Tournasian reservoirs to our technical team. We are reviewing the reports and will look to factor them in when determining the 2020 drilling programme and production guidance. Production declined faster than we had anticipated during Q3 resulting in a revision of our full year sales volumes guidance to 27,000 boepd from 28,000 boepd for 2019."
Shares in Nostrum were up 2.4% at 21.00 pence in London on Tuesday morning.
By Anna Farley; [email protected]
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