30th Mar 2016 06:51
LONDON (Alliance News) - Nostrum Oil & Gas PLC Wednesday said its pretax profit dropped by almost 77% in 2015 following a steep decline in revenue, driven by a fall in production and lower oil prices.
The company, which operates in Kazakhstan, said its pretax profit dropped to USD72.3 million in 2015 from the USD311.7 million profit booked in 2014 as its revenue fell 43% to USD448.9 million from USD781.9 million due to the fall in oil prices.
The severe drop in revenue led its gross profit to more than halve to USD262.3 million from USD560.0 million, as the average oil price achieved by the company fell 46% year-on-year.
Except for the loss on foreign exchange widening in the year, other costs were generally lower year-on-year.
Earnings before interest, tax, depreciation and amortisation fell to USD229.0 million from USD495.0 million as its Ebitda margin fell to 51% from 63% in 2014.
"2015 was a challenging year for Nostrum as we adapted to the falling oil price. We reacted quickly in cutting costs and took steps to protect the financial stability of the company whilst not deviating from our strategy to double our processing capacity and reach a production level in excess of 100,000 barrels of oil equivalent per day in the near future," said Chairman Frank Monstrey.
"In 2016 we need to remain vigilant on cost cutting and ensure that each dollar we invest will deliver future returns for shareholders in the new oil price environment," he added.
Sales in 2015 were 13% lower year-on-year at 14.1 million barrels of oil equivalent from the 16.2 million barrels of oil equivalent in 2014.
Production in 2015 averaged 40,391 barrels of oil equivalent per day, and is aiming to maintain that production level above 40,000 barrels a day in 2016 before rising to 40,000 to 60,000 barrels a day in 2017.
Nostrum said it reduced its operating costs to only USD4.3 per barrel in 2015 from USD5.0 per barrel in 2014, and has plans to reduce this further in 2016.
By Joshua Warner; [email protected]; @JoshAlliance
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