Nostrum Oil & Gas PLC, an independent oil and gas company focused on the pre-Caspian Basin, has approved a limited-scale drilling program for its Chinarevskoye field, a 170.3-square-mile (274-square-kilometer) license located north of Uralsk, Kazakhstan.
Nostrum halted drilling activities at the Chinarevskoye field in early 2020 as it entered a financial restructuring process. The company continued to evaluate further exploration and production opportunities through subsurface studies, updating its geological and reservoir models, it said in a press release on Monday.
Nostrum’s subsequent work in the field and reprocessing of its 3D seismic allowed it to formulate a limited-scale two-well drilling program to be executed in 2023-2024, in line with subsidiary Zhaikmunai LLP’s commitments under the analysis of the field development plan. and obligations under its production sharing agreement for the field, the news release said.
The new program, estimated to cost about $26 million, will take advantage of existing wells to reduce costs, Nostrum said. The program also “carries a level of uncertainties and risks, as the planned subsurface targets contain multiple exploration, evaluation and development targets,” Nostrum noted.
The Chinarevskoye field has produced more than 100 million barrels of oil equivalent (MMboe) since 2004. The field is located in the Pre-Caspian Basin, home to numerous gas discoveries, including the Rozhkovskoye field and the three neighboring Nostrum licenses. Both national and regional pipelines pass close to Nostrum’s hub, allowing the company to transport all processed products safely and efficiently, according to the company’s website.
Meanwhile, Nostrum reported that its daily output after treatment averaged 10,048 barrels of oil equivalent per day (boepd) in the first half, down year-on-year from 14,167 boepd. The company’s daily sales volumes averaged 9,020 boepd during the period, compared to 13,102 boepd in the comparable period in 2022, according to an operational update.
Nostrum expects first-half revenue to exceed $52 million, compared to first-half 2022 revenue of $107 million, which is in line with its targets and expectations. The company attributed the decline in revenue to lower production and relatively lower average product prices.
During the period, Nostrum completed the acquisition of an 80 percent stake in Positiv Invest LLP, which holds the subsurface use right for the Stepnoy Leopard Fields, located approximately between 37.3 and 74.6 miles ( 60 to 120 kilometers) west of Nostrum’s Chinarevskoye field and nearby. its oil and condensate loading terminal in Beles. The company estimates that the Stepnoy Leopard fields contain between 50 and 150 MMboe of recoverable volumes that are considered contingent resources, with more than 20% estimated to be liquids. Nostrum said it plans to launch an appraisal program targeting a technical expert’s report that could allow certain hydrocarbon resources to be reclassified as reserves.
Nostrum also said it had successfully launched the expansion of its gas lift system at the Chinarevkoye field, with the new compressor doubling its capacity and helping to stem its production slump. Initial production gains beat the company’s expectations and further updates on production guidance for the next quarter, the company said.
“Following the successful completion of the Stepnoy Leopard Fields acquisition this month, we have already started an appraisal program to reclassify certain contingent resources into proved reserves which will help us determine commercially viable development schemes,” Arfan said Khan, CEO of Nostrum. is an attractive upstream anchor project for us that could bring additional material reserves to the group’s resource base.”
“We are also excited about the initial production gains following the recent launch of our gas lift system expansion and will provide further updates on our production guidance as part of our third quarter 2023 operational update. We will continue to execute on our mixed asset energy strategy launched this year to capitalize on the advantageous position of our existing infrastructure and attract third-party volumes,” added Khan.
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