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(Alliance News) - Nostrum Oil & Gas PLC said Tuesday it has decided to halt all drilling operations in 2020 and expects a decline in sales and production volumes as a result.
Nostrum shares were trading 9.4% lower in London at 9.80 pence each on Tuesday.
Kazakhstan-focused energy firm said for 2019, its revenue is expected to be above USD322 million, down from USD389.9 million in 2018.
Meanwhile 2019 average production was 28,589 barrels of oil equivalent per day, while sales volume was 26,617 barrels of oil equivalent per day.
In 2018, Nostrum produced on average 31,254 barrels of oil equivalent per day, while daily sales volumes was 29,516 barrels per day.
After reviewing results, the company said it has concluded that "whilst significant discovered resources exist within its reservoirs, well productivity in certain areas remains challenging."
Therefore Nostrum decided to "halt all drilling in 2020 whilst it carries out further analysis to identify viable technologies to mitigate sub-surface risk."
The company had 46 wells in production as at 31 December.
As a result, the company forecasts average production of 20,000 barrels of oil equivalent per day for 2020 and sales volume of 19,000 barrels.
Nostrum said it expects to spend a limited amount on capital expenditure during 2020 ensuring that it can still end the year with over USD75 million of cash on its balance sheet.
Kaat Van Hecke, chief executive officer, said: "2019 has been a challenging year operationally. With the halt in drilling for 2020 we are still working on finalizing the 2020 budget and will communicate further on the anticipated capex for 2020 at the full year results."
The company in June began a strategic review, which could include a sale of the firm.
By Loreta Juodagalvyte; loretajuodagalvyte@alliancenews.com
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