Nostrum Oil & Gas PLC (LON: NOG) have seen their shares crash on Monday following the immediate resignation of their CEO.
Nostrum Oil & Gas plc is an oil and gas exploration and production company operating in Kazakhstan.
Shares of Nostrum Oil & Gas crashed 8.31% to 15p on the announcement. 16/12/19 15:26BST.
Nostrum have seen a turbulent time of trading across 2019, with shares coming up and down.In July, the firm posted steady results for the first half of 2019 and notified investors of proposed acquisitions of sites in Kazakhstan.
The Company stated that production was in line with expectations and that the first half was financially positive. Despite this, revenues are expected to finish at US $174 million for H1 2019, down from $191 million for H1 2018, which caused shares to dip.
Later in the year, the firm saw their shares crash once again as nine month revenues shrunk, which caught shareholders attention.
Nine month volume sales decreased to 27,515 barrels of oil equivalent per day from 30,523 barrels the year before, showing a significant slow down in production.
Additionally, the firm also faced production cuts in liquid petroleum. In this market gas volumes also dropped a less dramatic 5.4% to 3,680 barrels of oil equivalent per day from 3,891 boepd. While dry gas sales volumes fell 1.1% to 14,255 boepd from 14,415 boepd.
Following the poor performance by the firm, CEO Kai-Uwe Kessel announced his resignation on Monday whilst a strategic review of the company is ongoing.
Independent Non-Executive Director Kaat Van Hecke will takeover as CEO from Monday.
Van Hecke has been a Nostrum board member since the end of 2016. She has been a managing director at (OMV VIE: OMV) and had held executive positions at ExxonMobil Corp (executive positions at ExxonMobil Corp and Royal Dutch Shell PLC.) and Royal Dutch Shell PLC (LON: RDSB).
“On behalf of the board and management of Nostrum, I would like to thank Kai for his contributions over the last 15 years. I am delighted that Kaat, during this period of strategic review, is stepping up to take the executive role at Nostrum,” Chair Atul Gupta said.
The firm began a strategic review of operations which a sale of the firm was questioned, which worried shareholders.
“The first nine months of 2019 have been very challenging. We have seen quicker than expected decline in our core producing reservoirs resulting in a reduction in our sales guidance for 2019 by 1,000 barrels per day,” said Kessel said at the time.
The firm firm reported sales volumes of 27,515 barrels of oil equivalent per day for the quarter, down 9.9% from 30,523 barrels a year before.
The fall in production was due to quicker-than-expected field declines, which led to a reduction in 2019 output guidance from Nostrum at the end of October.
This morning, rival PetroTal Corp (LON: PTAL) saw their shares rally as it boasted a new production record.
Certainly a huge change is needed and the senior board will have to make more changes to turnaround fortunes in a period of tough trading for Nostrum Oil & Gas.
