LONDON (ShareCast) - (ShareCast News) - Pre-Caspian Basin-focussed independent oil and gas company Nostrum Oil & Gas released its operational update for the three month period to 31 March on Tuesday, ahead of the release of Nostrum's consolidated accounts for the same period.
The FTSE 250 firm said total production in the first quarter was of 4.4 million barrels of oil equivalent, with an average daily production of 48,743 barrels of oil equivalent per day.

It said the construction of the third gas treatment unit (GTU3) continued in line with guidance to be completed before the end of 2017.

The KazTransOil (KTO) pipeline connection had been completed by Nostrum, the board confirmed, and was awaiting finalisation of the tie to the KTO pipeline.

That work was being carried out by KTO and was expected to be completed in the coming weeks.

On the financial side, Nostrum said revenues were expected to be in excess of $110m, up from $73.9m in the same period of last year.

Its cash position was in excess of $120m, down from $137.1m, and total debt was $964.1m with net debt of approximately $840m.

"The first quarter of 2017 has started strongly with average daily production at over 48,000 boepd and oil prices averaging above $50," said chief executive Kai-Uwe Kessel.

"Our 2017 drilling programme is under way and the KTO pipeline connection is almost complete such that we look forward to significantly reducing our exported crude oil transportation costs in the coming weeks."

Kessel said the board was "pleased" to report "steady progress" continuing on GTU3, with completion continuing to be expected before the end of 2017.

"As we get close to the completion date we are pushing hard to ensure that we have all the manpower necessary to avoid any delays.

"Now that the winter months are behind us we can focus on getting everything ready for commissioning towards the end of the year."

The company was keeping a close eye on the weekly performance and would take all necessary action to ensure the plant was complete as quickly as possible in order to benefit from the additional cash flows it should generate, Kessel explained.

"We expect remaining payments on GTU3 to be between $100m and $130m to be paid depending on the speed of completion.

"The strengthening oil price environment and continued efficiency measures being undertaken throughout the company allow us to be optimistic that 2017 can be a good year for the company both operationally and financially."

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