Nostrum Oil & Gas FY 2025 results: resilient cash generation, but the pressure points are clear
Nostrum’s full-year 2025 results are a mixed bag, leaning slightly better than they might first appear. The headline numbers went backwards – revenue, EBITDA and cash flow all fell – but that was hardly a surprise given lower oil prices and a 21% production decline at its core Chinarevskoye field.
The more interesting bit is what kept the business steady. Nostrum’s third-party processing work with Ural Oil & Gas helped offset some of the weakness in its own field output, which is exactly why investors should pay attention to the processing side of the story rather than just the production decline.
Key Nostrum Oil & Gas FY 2025 figures investors need to know
| Metric | FY 2025 | FY 2024 | Change |
|---|---|---|---|
| Revenue | US$118.0 million | US$137.1 million | Down 13.9% |
| EBITDA | US$37.6 million | US$48.9 million | Down 23.1% |
| EBITDA margin | 31.9% | 35.7% | Down 3.8 percentage points |
| Operating cash flow before one-off items | US$29.9 million | US$33.1 million | Down 9.7% |
| Unrestricted cash | US$143.3 million | US$150.4 million | Down US$7.1 million |
| Restricted cash | US$26.6 million | US$25.9 million | Up US$0.7 million |
| Net debt | US$541.5 million | US$404.4 million | Up US$137.1 million |
For newer investors, EBITDA is a profit measure before interest, tax, depreciation and some other items. It is useful for judging underlying operating performance, and here it shows Nostrum stayed profitable at an operating level, even though performance softened.
Production decline at Chinarevskoye hurt, but processing volumes moved the other way
The biggest operational challenge remains the natural decline at the Chinarevskoye field. That decline fed directly into lower revenue, especially with the average Brent oil price also dropping 14.3% to US$69.1 per barrel from US$80.6 per barrel.
Against that, Nostrum did a decent job increasing throughput. Average daily processed volumes rose 23.3% to 24,431 boepd, with boepd meaning barrels of oil equivalent per day. Average daily titled production volumes – the volumes Nostrum actually books as its own production, including dry gas and LPG from Ural O&G feedstock – rose 12.9% to 16,867 boepd.
That matters because it shows the company is becoming more than just a declining single-field producer. Its infrastructure is doing more work, and that can support cash flow even when the legacy field is fading.
Nostrum product mix shifted further towards gas in FY 2025
| Product | FY 2025 volumes | FY 2024 volumes | Y-on-Y change |
|---|---|---|---|
| Crude oil | 2,343 boepd | 2,536 boepd | Down 7.6% |
| Stabilised condensate | 1,664 boepd | 1,897 boepd | Down 12.3% |
| LPG | 3,162 boepd | 2,537 boepd | Up 24.6% |
| Dry gas | 9,698 boepd | 7,965 boepd | Up 21.8% |
Dry gas made up 57.5% of titled production in 2025, up from 53.3% in 2024. In simple terms, Nostrum is becoming more gas-heavy, which fits with its processing infrastructure model.
The Ural O&G agreement looks like the most important positive in this update
The standout strategic positive is the continued processing of Ural O&G volumes and the new agreement extending those terms through May 2031. That gives Nostrum longer visibility on third-party processing revenues and better utilisation of its facilities.
This is important because it helps answer a key investor worry: what happens as Chinarevskoye declines? The company is clearly trying to squeeze more value out of its existing infrastructure rather than relying solely on fresh drilling. That is a sensible approach when capital allocation is tight and debt is still a serious issue.
It also reduces the all-eggs-in-one-basket problem a bit. Not completely, but enough to matter.
Net debt jumped sharply – and that is the main reason to stay cautious
The weak spot in these results is the balance sheet. Net debt rose to US$541.5 million from US$404.4 million, which is a big move in the wrong direction.
Nostrum says this was mainly driven by US$57.5 million of payment-in-kind interest capitalised on its Senior Unsecured Notes, US$16.8 million of accrued cash coupon, and a US$66.0 million amortisation of the fair value adjustment. In plain English, debt-related costs kept building even though the company cancelled some notes in April 2025.
That debt increase matters more than the drop in revenue. A business can survive a softer commodity year if it has financial flexibility. That flexibility is narrower when net debt keeps climbing.
The unpaid note coupons are awkward, even if management says cash is available
Nostrum also says accrued interest due on 30 June 2025 and 31 December 2025 remains outstanding because of a payment administration issue through the clearing systems. The company says this is not a solvency or liquidity problem, and that the money is available and secured.
That is reassuring as far as it goes, but investors should not shrug it off. Even if the issue is administrative rather than financial, delayed bond coupon payments are never a great look. Until the regulatory licences are obtained and payments are made, this will remain an overhang.
Operationally, Nostrum is doing the sensible things
Management appears to be playing the hand it has. The company completed drilling on well 116_1 in October 2025, brought it into production on 21 November 2025, and says initial production rates were in line with expectations. It also carried out targeted workovers to slow decline and support efficiency.
That is encouraging, but there is no sign here of a dramatic production turnaround. A comprehensive review of workovers and new drilling prospects is underway, and the Stepnoy Leopard fields are still under strategic review. Investors looking for a major growth catalyst will not find one in this release.
Safety, ESG and operational discipline remain a quiet positive
There were zero fatalities and zero lost time injuries in 2025, which is genuinely important in this industry. Total Recordable Incidents Rate rose to 0.92 from 0.63, so it was not a perfect year on safety, but keeping lost time injuries at zero is a solid outcome.
Air emissions were 4,047 tonnes against a permitted 5,200 tonnes. That will not move the share price on its own, but it supports the broader message that operations stayed under control.
Nostrum 2026 outlook: stable enough, but not yet exciting
For 2026, Nostrum expects average daily production from the Chinarevskoye field to be in the range of 5,000 boepd to 6,000 boepd. That guidance underlines the basic issue: the legacy asset is still declining, and the company needs processing income, cost control and careful capital allocation to carry more of the load.
My view is that this was a respectable update, not a breakthrough one. The positives are clear – resilient cash generation, strong facility utilisation, a long-dated Ural O&G processing agreement, and good operational discipline. The negatives are just as clear – lower revenue, weaker EBITDA, rising net debt, and unresolved note payment administration issues.
For retail investors, the investment case looks increasingly tied to Nostrum’s infrastructure value and ability to preserve liquidity, rather than any near-term production growth story. If management can keep processing volumes strong and sort the bond payment issues cleanly, that would help confidence. Until then, this looks like a company managing decline intelligently rather than one yet moving into a fresh growth phase.
