**Nostrum Oil Beats Production Target, Increases Cash Position **
LONDON (Alliance News) – Nostrum Oil and Gas PLC Friday said production during the first nine months of the year was above its guidance and reported an increase in its cash position despite weak oil prices.
For the first three quarters ended September 30, the exploration and production company operating in Kazakhstan said it is expecting revenue to be in excess of USD620 million, but said this has not been confirmed. It reported a cash position of USD516 million with a net debt of USD463 million at the end of September.
“During the period, we have increased our cash position by approximately USD58 million despite a declining oil price,” said Chief Executive Kai-Uwe Kessel.
For the nine months ended September 30, Nostrum’s average daily production totalled 45,2014 barrels of oil equivalent, higher than its target of 45,000 barrels of oil equivalent per day.
Of the average daily production, oil and condensate contributed 42%, averaging 19,038 barrels of oil equivalent per day during the first three quarters. Liquid petroleum gas production averaged 4,553 barrels equivalent per day and dry gas production averaged 21,613 barrels equivalent per day.
“I am very pleased with the strong performance of the company during the third quarter. While we have seen a significant decline in the oil price, which has naturally impacted revenue, our low cost base has allowed us to maintain healthy margins at current oil price levels,” added Kessel.
The company is focusing on adding its third gas treatment facility, GTU3, which is on schedule and aimed at doubling production to 100,000 barrels of oil equivalent per day, it said in a statement. The facility is to be constructed by the middle of 2016 and the company has spent around USD78 million on the project so far, with an estimated total cost of around USD500 million.
“We remain fully funded for the construction of the GTU3 over the next 24 months and this project remains on track to achieve a doubling of production to 100,000 barrels of oil equivalent per day by the end of 2016,” said Kessel.
Nostrum are waiting to complete the final preparations for two new wells at its Chinarevskoye field in Kazakhstan for frack treatment in 2015. By the end of 2014, Nostrum expects to complete drilling on two additional new wells at the site.
Nostrum shares were trading flat at 670.00 pence per share Friday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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