**UPDATE: Nostrum Production To Stay Flat For Two Years**
LONDON (Alliance News) – Nostrum Oil and Gas PLC Wednesday said production will remain flat for the next two years due to the recent decline in oil prices, but said it is fully financed and protected from the low oil price after hedging a portion of its production.
For the year ended December 31, the FTSE-250 listed company is expecting revenue to be in excess of USD770 million. It reported a cash position of USD400 million, including short term deposits, and net debt of USD560 million.
Nostrum has hedged 32% of its liquids production until February 2016. Around 7,500 barrels of oil per day have been hedged at a price of USD85 per barrel, said the company.
Production averaged 44,400 barrels of oil equivalent per day during 2014. Production consisted of 42% crude oil and stabilised condensate, 48% dry gas and 10% liquefied petroleum gas.
The company said it is expecting production to remain fairly flat at around 45,000 barrels of oil equivalent per day during 2015 and 2016, rising to 70,000 barrels of oil equivalent per day in 2017, and 100,000 barrels of oil equivalent per day in 2018.
A spokesman from Nostrum said production was set to remain flat over the next two years due to the current oil price.
The company said its GTU3 gas treatment facility is on schedule to be completed in 2016, and on budget at under USD500 million, which is fully financed. In 2015, Nostrum will spend USD188 million on GTU3, with a further USD82 million in 2016.
Nostrum said its capital expenditure programme for 2015 and 2016 is fully funded, which will maintain current production levels and allow eight wells, of which six will be production and two will be appraisal wells during 2015. Nostrum will spend around USD90 million on the eight wells.
“I am pleased with Nostrum’s operational performance in 2014. The combination of our continued production performance, our hedge at USD85, strong cash balance and low operating costs have combined to ensure we can comfortably continue to deliver GTU3 in 2016 and maintain our existing production in the current oil price environment,” said Chief Executive Kai-Uwe Kessei.
Nostrum Oil shares were down 0.4% to 535.00 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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