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 its Board has commenced a strategic review to optimise its value and that of its assets, together with the consideration of appropriate sources of finance required to pursue the range of growth opportunities available to it.
The Company has also announced today that it has entered in to an agreement to acquire 50% of Positive Invest LLP, the owner of the Stepnoy Leopard licences. Management estimates that the Stepnoy Leopard licences could hold up to 452 mmboe of in place volumes, and up to 200 mmboe of Contingent Resources of which over 20% are estimated to be liquids. The licences are located within 60km-120km of the Company’s infrastructure. Nostrum has the right to acquire a further 50% of Positive Invest LLP subject to certain conditions being met by the sellers. This acquisition secures additional undeveloped, material gas condensate resource that can be processed through Nostrum’s infrastructure in the future.
Over the past 12 months, Nostrum has achieved a number of additional significant milestones. These include the mechanical completion of the GTU3 gas treatment unit, the agreement of a gas tolling contract with Ural Oil and Gas LLP, and recent exploration success in the northern part of the Chinarevskoye licence area.
Following the successful completion of these milestones, the Company has identified a broad range of operational and strategic opportunities for the business to deliver shareholder value, some of which require the investment of further capital in the business. These options include (but are not limited to) further throughput agreements with third party gas suppliers, bolt-on acquisitions in existing and adjacent fields, farming down stakes in some assets to expedite their development, and a corporate transaction. The Company therefore announces that it is launching a process to review these operational and strategic options for Nostrum and its shareholders. No decision has been taken yet, and there can be no certainty that this review of options will result in any agreement(s) or transaction(s) being concluded.
Formal Sale Process
One of the options that will be considered by Nostrum is a sale of the Company. The Takeover Panel has agreed that any discussions with third parties may be conducted within the context of a “formal sale process” (as defined in the City Code on Takeovers and Mergers (the “Takeover Code”)) to enable conversations with parties interested in making a proposal to take place on a confidential basis.
The Company is not in receipt of any approaches at the time of this announcement.
Parties with a potential interest in making a proposal should contact Goldman Sachs International.
It is currently expected that any party interested in participating in the formal sale process will, at the appropriate time, enter into a non-disclosure agreement and standstill arrangement with Nostrum on terms satisfactory to the Board of the Company and on the same terms, in all material respects, as other interested parties. The Company then intends to provide such interested parties with certain information on the Group’s business, following which interested parties shall be invited to submit their proposals to Goldman Sachs International. Further announcements regarding timings for the formal sale process will be made when appropriate.
There can be no certainty that an offer will be made, nor as to the terms on which any offer will be made.
The Board of Nostrum reserves the right to alter or terminate the process at any time and in such cases will make an announcement as appropriate. The Board of Nostrum also reserves the right to reject any approach or terminate discussions with any interested party at any time.