Nostrum Oil & Gas has taken steps to ensure that it has a stable financial base during “any prolonged downturn”, according to the company’s CEO Kai-Uwe Kessel.
In order to achieve its goal, Nostrum purchased a new hedge, delayed its GTU3 project to 2017 and reduced its drilling plans for this year. The company’s current cash operating break-even price is $20 per barrel, although it aims to reduce this figure even further by mid-2016.
Nostrum expects its 2015 revenue to be in excess of $445 million and stated that its cash position as at December 31, 2015 was in excess of $170 million. The energy firm’s total debt remains at $960 million, with net debt at approximately $790 million, and its 2016 drilling capex is scheduled to be reduced to $50 million from $100 million.
Nostrum’s average daily production reached 40,402 barrels of oil equivalent per day in 2015, however this number is predicted to rise to approximately 45,000 boepd in 2016, 45,000-60,000 boepd in 2017 and 60,000-100,000 boepd in 2018. Three new production wells will be drilled by the company this year.
Kai-Uwe Kessel, Chief Executive Officer of Nostrum Oil & Gas, commented in a company statement:
“With the continued fall in the oil price and the increased belief that the low oil prices will last beyond the first quarter of 2016, we have taken steps to ensure Nostrum is well positioned to prosper under any oil price environment through 2016 and 2017.
“These steps will ensure that Nostrum has a stable financial base during any prolonged downturn in oil prices. Furthermore we have ensured that Nostrum has the flexibility to react extremely quickly to any increase in the oil price whereby drilling can be increased to allow for a quicker ramp up in GTU3.”
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