Nostrum Oil & Gas first-quarter earnings and revenue drop on weaker oil price

Nostrum Oil & Gas said on Tuesday that earnings before interest, tax, depreciation and amortisation fell 39.2% to $49.6m, on revenue of $100.3m, down nearly 38% from $161.6m, as the weak oil price offset a rise in production.

Chief executive Kai-Uwe Kessel said: “Q1 has been a challenging quarter financially as we have experienced far lower prices for our products as compared to Q1 2014.”

“However, the lower liquids price has been partially offset by our improved gas sales revenues as a result of a new contract to export the majority of our dry gas. This is the first year we are exporting our dry gas. I believe that the ability to do so will allow Nostrum to realise a higher dry gas price on an annual basis than we have been able to achieve in 2014. From an operational perspective I am very pleased,” he added.

Total average daily production rose 8.3% from 2014 to 45,479 barrels of oil equivalent per day (boepd). Te oil and gas explorer has stuck to its 2015 production guidance of 45,000 boepd.

“Nostrum's operational results reflect another successful first quarter. The performance was underpinned by continued steady production at the Chinarevskoye field and the consistent performance of the existing gas treatment facility,” said the company.
Total transport costs were down 34% at $5.2 per barrel of oil equivalent, from $7.9.

Nostrum also said that its Board had recommended that shareholders approve the final payment of $0.27 per ordinary share for the year ended 31 December, 2014.