Nostrum Oil & Gas plc’s first quarter financials are “broadly in line and operations are on track”, according to a brief research note from FirstEnergy.
The company’s revenue in the three months ended March 31 was $73 million and its gross profit for the period was $27 million. Excluding changes in working capital elevates that number to $38.3 million, which is “not very far” from FirstEnergy’s forecast of $43 million.
Average daily production for Nostrum in 1Q was 38,754 barrels of oil equivalent per day, including one week of scheduled maintenance at the end of March. The company stated in its 1Q results that it remained on track to fulfil its 2016 drilling program of three production wells and one appraisal well and revealed that its production guidance for the full year was still approximately 40,000 boepd. Nostrum also stated that it has a fully funded capex program to maintain current production in 2016 and 2017.
“We have made a steady start to the year both financially and operationally. Operating costs have been reduced to $3.5 per barrel of oil equivalent, from $4.5 per boe last year, and we look forward to completing negotiations to open up the possibility of transporting our crude oil through the KTO pipeline, thereby further reducing our crude oil transport costs,” said Kai-Uwe Kessel, Nostrum CEO, in a company statement.
“Whilst the oil price continues to be volatile, our hedge provides us with security against any falling oil price and allows us to focus on the completion of GTU3 in 2017, and subsequent ramp-up of production to 100,000 boepd. With our significant reserve base, low cash operating costs and prudent approach to balance sheet management I remain confident Nostrum is well placed to deliver on its growth strategy in the current environment,” he added.
“Among the larger UK listed E&Ps, Nostrum is one of the few names still offering upside on our commodity price deck,” said FirstEnergy in a statement sent to Rigzone, following Nostrum’s 1Q results update.
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