For a company that wants to more than double daily production to 100,000 barrels, Nostrum Oil & Gas (NOG) is heading in the wrong direction. This year, the Kazakhstan-based explorer now expects to replicate the 40,391 barrels of oil a day (bopd) pumped in 2015, and could do so again in 2017 if it sticks to the lower end of guidance, revised down in full-year results.
While 15,000 bopd has been hedged at $49 (£38) a barrel over that period, concerns over the low oil price environment has effectively translated to a one-year delay to volume targets. The oil price has had further negative impacts. The type of wells to be drilled at the Biski-Afioninski and Mulinski reservoirs between 2018 and 2021 will now be slanted rather than horizontal, in an effort to bring down costs and preserve operational margins. That decision, which could be reversed if oil prices improve, means less oil can be recovered, and contributed to the majority of the 18 per cent downgrade in proven and probable (2P) reserves to 470m barrels. The remaining decrease was caused by the 14.7m of production and the remapping of the Bashkirian West reservoir.
Prior to these results, Numis Securities was forecasting pre-tax profit of $154.2m and diluted EPS of 50¢ a share in 2016, against $94.7m and 20¢ last year.
NOSTRUM OIL & GAS (NOG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 251p | MARKET VALUE: | £472m | |
| TOUCH: | 251-253p | 12-MONTH HIGH: | 633p | LOW: 240p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 411¢ | NET DEBT: | 101% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 301 | 149 | 44.0 | 32† |
| 2012 | 737 | 282 | 87.0 | 34† |
| 2013 | 895 | 362 | 118 | 35† |
| 2014 | 782 | 312 | 79.0 | 27 |
| 2015 | 449 | 72.3 | -51.0 | nil |
| % change | -43 | -77 | - | - |
Ex-div: na Payment: na £1=$1.44 †Pro-forma rate on depositary receipts | ||||
