27th Apr 2016 07:13
LONDON (Alliance News) - Nostrum Oil & Gas PLC Wednesday said production in the first quarter of 2016 was lower than a year earlier, partly due to some scheduled maintenance work, which led to a fall in revenue.
The producer of oil, condensate, dry gas and liquid petroleum gas said overall production in the first quarter of 2016 averaged 38,754 barrels of oil equivalent per day, down from 45,479 barrels a day in the first quarter of 2015.
Scheduled maintenance which took one week to carry out in the first quarter of 2016 contributed to the fall in production. Nostrum said it expects revenue in the quarter to be in excess of USD70.0 million, which would be down from around USD100.0 million a year earlier.
Production in the first quarter of 2016 was also lower than the average production rate over the whole of 2015 of 40,391 barrels of oil equivalent per day and below the company's full year target for 2016 of 40,000 barrels per day.
"It has been a steady start to the first quarter with production broadly in line with expectations taking into account the first part of the annual maintenance," said Chief Executive Kai-Uwe Kessel.
The company said it has secured a USD19.0 million payment in the first quarter from the hedging programme that it entered in December 2015, which covers 15,000 barrels a day at USD49.16 per barrel up until December 2017.
Nostrum said its cash position, including short-term deposits, stood at USD140.0 million at the end of March whilst net debt totalled USD820.0 million.
All of Nostrum's production currently comes from the Chinarevskoye licence in Kazakhstan but the company's major GTU3, or gas treatment unit project remains on track to be completed in 2017, it said.
"Whilst the oil price continues to be volatile our hedge provides us with security against any falling price and allows us to focus on the operational side of the business and completing GTU3 during 2017," said Kessel.
"We look forward to bringing on the new production wells during the second quarter and completing the negotiations to open up the possibility to transport our crude oil through the KTO pipeline and reduce further our crude oil transport costs. We continue to focus on reducing our operating costs internally and I am pleased with the progress we are making," he added.
Nostrum shares were trading up 1.3% to 285.0 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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