Nostrum Oil to restart drilling at Chinarev field

Nostrum Oil & Gas PLC announced the restart of drilling at the Chinarevskoye oil field. The company has already allocated $26 million for the project.

«Nostrum Oil & Gas PLC, an independent oil and gas company engaging in the production, development and exploration of oil and gas in the Pre-Caspian Basin, announces that the Nostrum Board of Directors has approved a limited-scale drilling program for the Chinarevskoye field,» the London Stock Exchange (LSE) said on its website.

The company stopped drilling activities in the field in early 2020 as it entered into the process which resulted in its financial restructuring. However, it continued evaluating further exploration and production opportunities through subsurface studies, updating its geologic and reservoir models. Completion of this work and re-processing of the 3D seismic study has allowed the company to formulate a limited-scale two-well drilling program to be executed over 2023-2024, which is in line with the commitments of the company’s subsidiary Zhaikmunai LLP under the analysis of the Field Development Plan and obligations under its production sharing agreement for the field.

The program will leverage existing wellbores to reduce costs and carries a level of uncertainties and risks. The total cost of the program is estimated at $26 million.

The production sharing agreement for the Chinarevskoye field is going to last until 2032. Proven and potential reserves within the field were estimated at 294 million barrels of oil equivalent. Over the period from 2004 to 2018, the company drilled 100 wells at the Chinarevskoye field.

In August, the company’s subsidiary Zhaikmunai LLP announced the launch of prospecting and evaluation work at Stepnoy Leopard, a group of oil fields. On July 31, the Zhaikmunay board of directors approved the corresponding appraisal program, which is going to cost $6 million. The appraisal program would allow the re-classification of certain contingent resources to proven reserves and help determine commercially viable development schemes, the company said.

Zhaikmunai will re-enter two wells in the Teplovskoye reservoir, take representative samples, and conduct extended production well testing in both wells. Rig operations are expected to start in the middle of September 2023.

Stepnoy Leopard licenses are located approximately 60-120km west of Nostrum’s Chinarevskoye field, 20km from its Rostoshinskoye field and within 10km of its oil and condensate loading terminal at Beles. Stepnoy Leopard consists of two licenses with eight fields shown to contain hydrocarbons. Of the eight fields, four fields are gas condensate fields and four are gas condensate fields with oil rims.

In July, the British Nostrum Oil & Gas, which controls Zhaikmunai, announced the acquisition of an 80% share in Positive Invest  LLP, which held the subsoil use rights to the Stepnoy Leopard licenses in Northwestern Kazakhstan. Initially, Nostrum planned to acquire just 50% of the company for $500,000. However, it has bought 80% for $20 million.

In the first quarter of 2023, Zhaikmunai cut its output from 14,700 barrels of oil equivalent to 10,500 barrels.

The biggest shareholders of Nostrum Oil & Gas are ICU Holdings Limited (19.10%), EMOV Caspin Holdings Limited (18.88%) and Amundi (9.74%). Although Nostrum Oil is registered in the U.K. and listed on the London Stock Exchange, it mainly operates in Kazakhstan. The company’s core activities are happening at the Kamenskoye and Kamensko-Teplovskoye-Tokarevskoye fields with extractable reserves of 42.3 billion cubic meters of gas.