Nostrum Oil & Gas (NOG) H1 2024 earnings summary

Executive summary

• Final investment decision made for Stepnoy Leopard initial development phase with a $100 million capital budget, following positive appraisal results and significant reserve upgrades.

• Stepnoy Leopard reserves increased fivefold to 133 million barrels of oil equivalent, with after-tax NPV10 of $220 million at a 34% rate of return.

• Average daily production volumes rose 22% year-over-year to 12,220 boepd; sales volumes up 16% to 10,475 boepd, driven by new wells and third-party gas processing.

• Improved ESG risk rating to 29.2, moving to medium risk category per Sustainalytics.

• No fatalities, zero lost time injury rate, and low total recordable incident rate in H1 2024.

Financial highlights

• H1 2024 revenues rose 23.7% year-on-year to $65.3 million, up from $52.8 million, supported by higher production, sales, and Brent prices.

• EBITDA increased 44% year-on-year to $22.3 million from $15.5 million, with margin improving to 34.2% from 29.4%.

• Gross profit increased to $30.5 million from $13.5 million year-over-year.

• Ural Oil and Gas condensate tolling revenues contributed $3.9 million in H1 2024.

• Unrestricted cash balance at June 30, 2024 was $142.5 million, adjusted for one-off items to $158.4 million.

Outlook and guidance

• Chinarevskoye field production guidance for 2024 is 7,000–8,000 barrels of oil equivalent per day, with new wells factored in.

• Production expected to be at the higher end of guidance, despite a 20–25% decline versus last year.

• Ural Oil and Gas tie-in of four additional wells expected in H2 2024, targeting total flow rates of 1.5 million cubic meters per day of raw gas.

• Stepnoy Leopard initial development phase CapEx is $100 million, internally funded; full field development would require more capital.

• Approximately $0.4 million and $13 million in remaining capital expenditures for Stepnoy Leopard appraisal and Chinarevskoye drilling, respectively, to be paid in H2 2024.