For a company that has seen 90 per cent of its market capitalisation wiped out already this year, there didn’t seem much more to lose. But Nostrum Oil and Gas (NOG) announced today its Well 41 is noncommercial, and its share price fell 40 per cent to 6.2p.
The company had hoped the well in the Chinarevskoye field in Kazakhstan would be as promising as Well 40, which was tested successfully last year. “Nostrum has so far been unable to sustain a commercial flow of hydrocarbons from the well,” the company said.
The failure comes at the same time Nostrum is looking for a buyer. It announced in June it would begin a strategic review to work out how to “maximise value for all stakeholders”. This continues, with no update. Nostrum said it recognised the “extreme” share price weakness and was looking for a solution through the Goldman Sachs-run review. The company’s market capitalisation of £19.7m is now well below its June 30 cash position of $120m (£97m), although its debt stands at $1bn.
The company had set a September target for commissioning the GTU3 gas plant, but has not confirmed this has taken place.
