Nostrum Oil and Gas (NOG) put itself up for sale in June. It did not see the valuation boost Amerisur Resources (AMER) got when it did the same thing in July, and has not announced any formal offers.
After the share price slide from over 100p at the start of the year to 30p, Nostrum is trading at a discount to its cash position of $120m (£99m).
The Kazakhstan-focused oil and gas producer is not just going for a sale – it is also working on adding to its own portfolio. Chief executive Kai-Uwe Kessel said in a statement his focus was on “trying to find ways to grow production in the near term”. In the first half, Nostrum produced an average of 31,096 barrels of oil equivalent per day (boepd), compared with 32,524 boepd a year ago.
Panmure Gordon analyst Colin Smith, who is bullish on the company, said investors had jumped ship based on Nostrum’s debt load and reservoir uncertainty. Net debt stands at just over $1bn. Nostrum said in its half-year results it was looking at three zones at Well 42, and none had commercial flow. Another well is more promising, according to Mr Smith’s analysis, but the company said longer-term testing was needed before it gets too excited.
