January 28, 2020 / 9:19 AM / 21 days ago

UPDATE 1-Nostrum expects lower annual revenue, shares down 10%

(Adds 2019 revenue outlook, shares)

Jan 28 (Reuters) - Kazakhstan-focussed Nostrum Oil & Gas said on Tuesday it expects lower revenue for 2019 and will operate with one workover rig this year after studies showed production from some of its wells would remain challenging.

Shares of Nostrum were down 7.7% to 9.95 pence at 0913 GMT.

After reviewing the results of various third-party studies, including that of Schlumberger, the company said it found that whilst significant discovered resources exist within its reservoirs, well productivity in certain areas remains challenging.

It had said last week it would halt drilling in 2020. The oil and gas explorer had 46 wells in production at the end of last year.

“2019 has been a challenging year operationally,” Chief Executive Officer Kaat Van Hecke said, adding that the company would work to commercialise its existing infrastructure.

The oil and gas explorer expects revenue in excess of $322 million for the 12 months ended Dec. 31, lower than $389.9 million a year earlier.

Nostrum, which announced a strategic review on its assets and operations in June, said earlier this month that it had not received any binding offer.

It expects average sales volumes of 19,000 barrels of oil equivalent per day (boepd) and production of 20,000 boepd for 2020, lower than its 2019 sales volumes of 26,617 boepd and production of 28,587 boepd. (Reporting by Shanima A in Bengaluru; Editing by Subhranshu Sahu)

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