TIDMNOG
RNS Number : 0902P
Nostrum Oil & Gas PLC
29 August 2017
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT
JURISDICTION
Amsterdam, 29 August 2017
Half Year 2017 Financial Results
Nostrum Oil & Gas PLC (LSE: NOG) ("Nostrum", or "the
Company"), an independent oil and gas company engaging in the
production, development and exploration of oil and gas in the
pre-Caspian Basin, today announces its financial results in respect
of the six-month period ending 30 June 2017.
Highlights from the six months to 30 June 2017:
Financial
-- Revenue of US$210.0 million (H1 2016: US$163.5 million)
-- Net operating cash flows1 of US$118.5 million (H1 2016: US$78.9 million)
-- EBITDA2 of US$119.8 million (H1 2016: US$100.9 million)
-- EBITDA margin of 57.0% (H1 2016: 61.7%)
-- Transport/boe cost reduced to US$5.0/bbl (H1 2016: US$5.3/bbl)
-- Net income of US$14.0 million (H1 2016: US$(55.7 million))
-- Closing cash3 for the period of US$97.5 million
-- Post half-year successful new bond issuance of US$725 million 8% senior notes due 2022 with proceeds used in part
to refinance US$606.8 million of existing notes due 2019
-- Pro forma debt of US$1,042.2 million and pro forma net debt of US$867.7 million as at 30 June 2017
Operational
-- Average daily production for the six-month period ending 30 June 2017 was 46,685 boepd
-- Average daily sales volumes for the six-month period ending 30 June 2017 was 41,107 boepd
-- Sales and production volumes impacted by one week of maintenance shut in
-- 44 wells currently producing at the Chinarevskoye field - 23 oil wells and 21 gas condensate wells
-- Construction of the third Gas Treatment Unit ("GTU3") continues in line with guidance and completion is expected
before the end of 2017 at a total cost of US$532 million
-- The KazTransOil ("KTO") pipeline connection was finalised in June 2017 at a cost of less than US$7 million,
substantially reducing crude oil transportation costs (previous guidance was less than US$10 million)
Kai-Uwe Kessel, Chief Executive Officer of Nostrum Oil &
Gas, commented:
Nostrum had a solid first half of 2017. Production was stable
and our sales prices were significantly higher than our internal
forecast of US$45 oil price. We maintained a steady control on
costs keeping them in line with H1 2016 while having slightly
higher production and sales volumes. In addition, the completion of
the KTO pipeline connection in June 2017 below budget will
contribute to a reduction in our crude oil transportation costs in
H2 2017. Importantly, the Company achieved a key strategic
objective in July by re-entering the bond market with a US$725
million 5 year new issue. The proceeds will go towards repaying
US$607 million of existing bonds maturing in 2019, moving close to
two-thirds of the Company's debt maturity profile from 2019 to
2022. With a lessening of its repayment risk, Nostrum continues to
be well positioned to deliver its next phase of growth. I look
forward to the commissioning of GTU3 before the end of the year and
the value creation this project will bring for our shareholders,
alongside the planned ramp up of the drilling programme in
2018.
Other News
Progress on development of GTU3
Progress on the GTU3 project continues and completion remains
scheduled before the end of 2017 with total capex guidance
remaining at US$532 million.
GTU3 Cash Spent (excl VAT) As at 30 June 2017
---------------------------- -------------------
Expenditure to date US$429 million
---------------------------- -------------------
Expenditure pre-completion US$55 million
---------------------------- -------------------
Expenditure post-completion US$48 million
---------------------------- -------------------
Total: US$532 million
---------------------------- -------------------
Significant news after reporting period
On 29 June 2017 the Company commenced a Tender Offer and Consent
Solicitation for Zhaikmunai's 6.375% Senior Notes - due February
2019, and 7.125% Senior Notes - due November 2019 ("Existing
Notes"). Following this announcement, management participated in a
series of fixed income meetings with global investors during a
two-week roadshow.
On 31 July 2017 the Company announced a final successful tender
acceptance result for US$606.8 million of Zhaikmunai's Existing
Notes using the proceeds of a US$725 million new issue. The new
issue has a coupon of 8.00% and is non-callable for a period of two
years with a tenor of five years, maturing in July 2022. The new
issue was oversubscribed by 1.5x and saw significant demand from a
wide variety of institutional investors. Proceeds from the new
issue will be used to fund the Tender Offer for the Existing Notes,
fees and expenses associated with the transaction and general
corporate purposes. For more information please see Regulatory
News.
Conference call
Nostrum's management team will present the H1 2017 Financial
Results and will be available for a Q&A session with analysts
and investors today at 14.00 pm BST, 29 August 2017.
If you would like to participate in this call, please register
by clicking on the following link and following instructions:
Results Call
Download: H1 2017 Results Presentation
Download: H1 2017 Interim Management Report and Reviewed
Financial Statements
Download: Q2 2017 Interim Management Report and Unreviewed
Financial Statements
Further information
For further information please visit www.nog.co.uk
Further enquiries
Nostrum Oil & Gas PLC - Investor Relations
Kirsty Hamilton-Smith
Amy Barlow
+44 203 740 7433
ir@nog.co.uk
Instinctif Partners - UK
David Simonson
George Yeomans
+ 44 (0) 207 457 2020
Promo Group Communications - Kazakhstan
Asel Karaulova
Irina Noskova
+ 7 (727) 264 67 37
About Nostrum Oil & Gas
Nostrum Oil & Gas PLC is an independent oil and gas company
currently engaging in the production, development and exploration
of oil and gas in the pre-Caspian Basin. Its shares are listed on
the London Stock Exchange (ticker symbol: NOG). The principal
producing asset of Nostrum Oil & Gas PLC is the Chinarevskoye
field, in which it holds a 100% interest and is the operator
through its wholly-owned subsidiary Zhaikmunai LLP. In addition,
Nostrum Oil & Gas holds a 100% interest in and is the operator
of the Rostoshinskoye, Darinskoye and Yuzhno-Gremyachenskoye oil
and gas fields through the same subsidiary. Located in the
pre-Caspian basin to the north-west of Uralsk, these exploration
and development fields are situated approximately 60 and 120
kilometres respectively from the Chinarevskoye field.
Forward-Looking Statements
Some of the statements in this document are forward-looking.
Forward-looking statements include statements regarding the intent,
belief and current expectations of the Partnership or its officers
with respect to various matters. When used in this document, the
words "expects," "believes," "anticipates," "plans," "may," "will,"
"should" and similar expressions, and the negatives thereof, are
intended to identify forward-looking statements. Such statements
are not promises or guarantees, and are subject to risks and
uncertainties that could cause actual outcomes to differ materially
from those suggested by any such statements.
No part of this announcement constitutes, or shall be taken to
constitute, an invitation or inducement to invest in the Company or
any other entity, and shareholders of the Company are cautioned not
to place undue reliance on the forward-looking statements. Save as
required by the Listing Rules and applicable law, the Company does
not undertake to update or change any forward-looking statements to
reflect events occurring after the date of this announcement.
H1 2017: Nostrum Financial Results
In millions of US$ (unless mentioned otherwise) H1 2016 H1 2017 Variance Variance in %
------------------------------------------------- -------- -------- --------- --------------
Revenue 163.5 210.0 46.5 28.4
------------------------------------------------- -------- -------- --------- --------------
EBITDA 100.9 119.8 18.9 18.7
------------------------------------------------- -------- -------- --------- --------------
EBITDA margin 61.7% 57.0% - (4.7)
------------------------------------------------- -------- -------- --------- --------------
In millions of US$ (unless mentioned otherwise) YE 2016 H1 2017 Variance Variance in %
------------------------------------------------- -------- -------- --------- --------------
Cash Position 101.1 97.5 (3.6) (3.5)%
------------------------------------------------- -------- -------- --------- --------------
Net Debt 857.9 864.3 6.4 0.7%
------------------------------------------------- -------- -------- --------- --------------
Revenue, EBITDA and Profit for the Period
Revenue from sales of crude oil, stabilised condensate, LPG and
dry gas over the period amounted to $US210.0 million, up 28.4% on
the same period last year. EBIDTA was US$119.8 million with an
EBIDTA margin of 57.0%, with a net income of US$14.0 million also
recorded compared to a loss of US$(55.7 million) for H1 2016.
Cost of sales
The cost of sales was US$98.5 million, an increase from the H1
2016 figure of US$94.5 million. This is a result of increased
royalties and government profit share due to higher revenues and
payroll expenses.
Cash resources and Net debt
The Group ended the period with US$97.5 million in cash and cash
equivalents (YE 2016: US$101.1 million). Net debt at the end of the
period was US$864.3 million (YE 2016: US$857.9 million).
Hedging
In December 2015, Nostrum rolled its pre-existing hedge into a
new hedge of 15,000 boepd with a strike price of US$49.16 per
barrel. The cost of the hedge was paid entirely from the sale of
the Company's previous hedge for US$92m. The new hedge has a
24-month tenor, maturing in December 2017, with cash settlements on
a quarterly basis. No cash was received from the hedge for the
six-month period ending 30 June 2017.
Sales volumes
The sales volumes split for H1 2017 was as follows:
Products H1 2017 sales H1 2017 Product
volumes Mix
(boepd) (%)
---------------------------------- ------------- ---------------
Crude Oil & Stabilised Condensate 16,547 40
---------------------------------- ------------- ---------------
LPG (Liquid Petroleum Gas) 4,949 12
---------------------------------- ------------- ---------------
Dry Gas 19,611 48
---------------------------------- ------------- ---------------
Total 41,107 100
---------------------------------- ------------- ---------------
The difference between true production and the sales volumes are
as a result from part of the dry gas being used for internal
consumption (power generation), gas lift and some losses during raw
gas treatment.
Drilling
-- 44 wells currently producing at the Chinarevskoye field - 23 oil wells and 21 gas condensate wells
-- An appraisal well at the Rostoshinskoye field is pending a flaring permit before testing can start and an
extension to the exploration license has been submitted for this field
-- 3 wells are currently being completed, with a further 4 wells planned for H2. Out of our 7 well programme at
least 2 will be appraisal wells and the remainder will be production wells
Sales volume schedule
-- 2017: average sales volumes revised to 40,000 - 44,000 boepd. Full year sales volumes will vary depending on the
amount of downtime required to tie in GTU3 to GTU1&2 during Q4. Following a recent detailed assessment for the
commissioning phase, downtime is currently estimated at three weeks in Q4 2017 but options to reduce this are
being considered
-- 2018: 50,000 - 80,000 boepd
-- 2019: 80,000 - 100,000 boepd
Should oil prices deviate materially the production guidance
will be updated accordingly.
(1) IFRS term based on indirect cash flow method (2) Defined as profit before tax net of finance costs, foreign exchange loss/gain, ESOP, depreciation, interest income, other income and expenses.
(3) Defined as cash and cash equivalents including current and
non-current investments and excluding restricted cash
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAXPPASNXEFF
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