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LONDON (Alliance News) - A fall in oil sales volumes for Nostrum Oil & Gas PLC led to a decline in revenue, the company reported on Tuesday, while it has swung to a loss after an impairment.
Kazakhstan-focused Nostrum produced on average 31,254 barrels of oil equivalent per day in 2018, down from 39,199 barrels a day in 2017.
This led to a fall in average daily sales volumes to 29,516 barrels per day from 37,844 barrels the prior year.
Nostrum has reiterated its 2019 production guidance, seeing an average of 30,000 barrels of oil equivalent per day, while also guiding sales volumes of 28,000 barrels per day.
Nostrum said it was a "tough" year on the production front, after some setbacks in drilling production wells, but things did improve in the second half.
One of the main disappointments was the Biyski West asset in the pre-Caspian basin, where a well bore collapsed in well 234, meaning drilling has now been halted.
Nostrum's revenue fell 3.8% to USD389.9 million, with earnings before interest, tax, depreciation, and amortisation declining by 0.3% to USD231.2 million.
Nostrum has swung to a pretax loss of USD92.2 million, after a USD49.8 million pretax profit in 2017, due to a USD150 million impairment of 78 million barrels worth of proven and probable reserves because of the drilling problems.
However, net operating cash flow rose to USD214.0 million from USD182.6 million, and operating costs fell 12% to USD49.9 million. General and administrative costs were down 30% to USD20.3 million.
Chief Executive Kai-Uwe Kessel commented: "Looking forward to 2019, I want to ensure we continue the positive trend we set in the fourth quarter of stabilising production combined with some of the lowest drilling costs we have ever achieved.
"I am optimistic we can grow production based on the lessons we have learnt and the results of the Schlumberger study due in the third quarter of 2019. We currently have two rigs drilling in the North and have access to more rigs when the time comes to accelerate drilling."
Shares were 2.2% higher early on Tuesday at 98.10 pence each.
