Nostrum Sees Output, Revenues Dip

Kazakhstan-focused Nostrum Oil & Gas saw further declines in revenues and output in the first half of the year, as global oil prices fell year on year.

The London-listed company is not scheduled to release its complete financial results until August 20. But in an operational update on July 30, it said it anticipated revenues of $174mn in January through June, down from $191mn a year earlier. Oil and gas output averaged 31,096 boe/day in the period, down from 32,524 boe/day.

Company CEO Kai-Uwe Kessel set an upbeat tone, describing the results as “in line with expectations.”

“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 revenues and operating cash flow,” he said.

He noted that well testing in the northern section of the company’s main Chinarevskoye field was yet to be finalised because of “technical issues.”

“Our focus remains on trying to find ways to grow production in the near term, and we are working to complete our own analysis alongside the studies with PM Lucas and Schlumberger,” he said.

Meanwhile, Nostrum’s long-delayed third gas treatment unit at Chinarevskoye is now undergoing hot commissioning, with its launch now slated for the end of the third quarter. The company initially intended to complete the unit in 2017.

Nostrum, which is the sole owner of Chinarevskoye and several other deposits in western Kazakhstan’s Pre-Caspian basin, had ambitious plans several years ago to grow production to 100,000 boe/day by 2020. But since then it has been beset by a series of operational setbacks, as well as difficult market conditions.

The company said in June it had launched a strategic review of its business and was considering a sale of its equity among other options to improve its shareholder value. It also struck a deal to buy a 50% in a local company operating the Stepnoy Leopard licences, also in western Kazakhstan.