Nostrum Cuts Output Guidance

Kazakhstan-focused Nostrum Oil & Gas has slashed its annual projection for sales, while reporting a slump in revenues for the first nine months of the year.

In an operational update on October 29, the London-listed operator said it had cut its full-year sales guidance from 28,000 barrels of oil equivalent/day to 27,000 boe/day, after a faster-than-anticipated decline in output in the third quarter.

Nostrum, whose core asset is the Chinarevskoye field in western Kazakhstan, produced 28,877 boe/day of oil and gas in the nine months ending September 30, down from 31,757 boe/day a year earlier.

The company will publish its full nine-month financial results on November 19. But it has given a preliminary estimate for revenues of $250mn, down from $311.4mn in the same period in 2018. Its cash position at the end of September was $91mn, versus $120.8mn three months earlier.

Nostrum once aspired to expand production to 100,000 boe/day by 2020, but it has been beset in recent years by operational difficulties, including the delayed launch of a third gas treatment unit (GTU3), originally due on stream in 2016.

"I am pleased to confirm that during October we concluded the 72hr test of GTU3 and as a result can confirm it is commissioned,” CEO Kai-Uwe Kessel said in a statement.

Kessel added that Nostrum’s technical team had received analysis from engineering firms Schlumberger and PM Lucas on the Biski North East & West and Tournasian reservoirs.

“We are reviewing the reports and will look to factor them in when determining the 2020 drilling programme and production guidance,” he said.

Nostrum's management launched a strategic review of its business in June to deliver greater shareholder value. One of the options being considered in the review is a sale of the company.