Nostrum looks for midstream salvation

Nostrum is in such strife because it combined a high debt load – net debt was flat at $1bn as of 31 December – with operational delays and disappointments. The massive write-down came from the removal of 272m barrels of oil equivalent from the reserves. The current oil and gas strife would result in another $256m impairment if the accounts were done today, the company said. 

The bond restructuring was announced at the end of March. Chief executive Kaat Van Hecke said the company sympathised with investors. “We recognise how challenging it has been for our shareholders and bondholders as the company has missed guidance, written down significant amount of reserves and had to stop drilling,” she said. 

Production in 2019 was down 9 per cent on the year before at 28,540 barrels of oil equivalent per day (boepd). This is secondary, now, as Nostrum moves towards being a midstream player, selling capacity at its gas processing plant in Kazakhstan. It has signed up one partner, Ural Oil & Gas, which last month delayed delivery of gas to the plant. Ural has until 2023 to deliver the gas, although a major delay would be a hit to the restructuring hopes.