Nostrum to drill more in Kazakhstan in 2014

February 5, 2014

Nostrum Oil & Gas LP (LSE: NOG) (“Nostrum”, or the "Partnership"), the oil and gas exploration and production partnership with assets in north-western Kazakhstan said on February 3 that in 2013 it continued to deliver against its financial, and operational milestones, with steady production, strong cash flows and, in parallel, good progress in infrastructure and exploration work towards the strategic goal of doubling production by 2016.

The 2014 drilling programme is on track, targeting 12 new wells, of which two are planned in H2 2014 at one of the recently acquired licence areas.

Kai-Uwe Kessel, Chief Executive Officer of Nostrum Oil & Gas, commented: “2013 was another record year for the partnership, bringing us a step closer to delivering on our strategy to more than double 2013 production by the end 2016. The Chinarevskoye Field continued to perform strongly, delivering a further increase in production to a record annual total and generating the cash flows and strong balance sheet that provide the basis for our growth. Our focus as we enter 2014 remains on generating growth. We expect our current production to now remain stable and in line with our targets, whilst we increase our reserves through an intensive appraisal programme and work to deliver the key third train of our GTF facility on time and on budget.”

Nostrum’s initial results reflect an extremely successful twelve months of operations, with strong revenues, increased cash flows and a strengthened balance sheet.  Full year revenues are expected to be US$895m compared to US$737m in the equivalent period in 2012, and EBITDA is expected to be above U$500m compared to US$460m in the equivalent period in 2012. This performance was underpinned by increased average production of 48,458 boepd in Q4, resulting in a record annual average of 46,178 boepd, a 25% increase on 2012.

Nostrum continued to progress towards the target to more than double 2013 production by the end of 2016.  Infrastructure expansion remains key to supporting this growth, and the focus in 2014 and 2015 will be on the on-going work at the third train of the GTF.

Nostrum will continue its focus on appraisal drilling during 2014 in two main areas:

1)     In line with its exploration period extension, it will target the unaudited exploration area with one exploration well.

2)     The Partnership will continue to target transferring more Probable Reserves into the Proven category. This Probable to Proven transfer will largely be focused at the Chinarevskoye Field. Nostrum plans to drill approximately 5-6 appraisal wells during 2014, of which two will be in the recently acquired fields and are anticipated to be drilled in the second half of 2014.

The Partnership plans to drill 4-5 production wells during 2014 to maintain production above the 45,000 boepd target.

Copyright: Nostrum, 2014