LONDON, UK: Nostrum Oil & Gas Plc (LSE: NOG) has agreed to acquire 80% of Positive Invest LLC, which holds the subsoil use right to the contract No. 25 for estimation, development and production of hydrocarbons for the area “Kamenskoe” and the development area “Kamensko-Teplovsko-Tokarevskoe” (Stepnoy Leopard Fields) in the West Kazakhstan region of the Republic of Kazakhstan for $20 million (less a modest amount of  debt owed to Nostrum Oil & Gas Coöperatief U.A).

Management estimates that the Stepnoy Leopard Fields hold between 50 mmboe and 150 mmboe of recoverable volumes which are considered contingent resources, with over 20% estimated to be liquids. There are eight fields within the licences with over 100 wells drilled in the Soviet era which have confirmed hydrocarbons to be present.

The resources are considered by management to be contingent due to the appraisal and development risks, noting the fields have not previously been developed in part due to the lack of related infrastructure. If the Proposed Acquisition completes, Nostrum plans to implement an appraisal programme in 2023, with the intention of preparing a technical expert’s report which could allow re-classification of certain of the hydrocarbon resources into reserves.

The Proposed Acquisition will enable Nostrum to tie-in further resources in the region that can be processed at the Company’s gas treatment facilities. An affiliate of the Company shall be appointed as the operator of the Positive Invest Contract.

Key Highlights of the Stepnoy Leopard Fields

• The Stepnoy Leopard Fields are located approximately 60-120km west of Nostrum’s Chinarevskoye field and within 10km of its oil and condensate loading terminal at Beles;
• The Fields consist of two licences with eight fields shown to contain hydrocarbons;
• In excess of 100 wells across the eight fields were drilled during the Soviet era, confirming the existence of hydrocarbons at the Stepnoy Leopard fields at a depth of around 3,000 metres. The fields were not previously developed with their own standalone infrastructure;
• Nostrum will work with Positive Invest to determine the field development plans for each of the eight fields under the Positive Invest Contract and submit them to the Republic of Kazakhstan’s Ministry of Energy (the “Ministry of Energy”) for approval for tieback to Nostrum’s existing infrastructure, thereby improving the fields’ economic viability; and
• The Positive Invest Contract is currently due to expire in December 2044.

Arfan Khan, Chief Executive Officer of Nostrum, commented: “We are pleased to announce the proposed acquisition of a majority interest in Positive Invest, whose assets are complementary to our own and which we know well. We look forward to working with the relevant stakeholders to appraise the known potential and develop additional resources which can be part of the continuing expansion of operations at our world-class gas treatment facility in Kazakhstan.”