Nostrum Oil & Gas Reports Q3 2025 Financial Results with Strong Production Growth

Nostrum Oil & Gas Q3 and 9M 2025: Production Up, Costs Down, Debt Still Heavy

Here is my plain-English read of Nostrum Oil & Gas’s third quarter and nine months to 30 September 2025. The headline: operations are humming with higher processed volumes and leaner costs, but revenue and EBITDA are lower on weaker oil prices and the underlying decline of the Chinarevskoye field. Liquidity looks solid, while net debt continues to creep up due to interest accruals.

Key takeaways investors should note

• Revenue fell to US$85.5 million (9M 2024: US$101.4 million) as Brent averaged US$70.95/bbl, down 14% year-on-year.
• EBITDA of US$26.8 million with a 31.3% margin (9M 2024: US$34.7 million, 34.2%).
• Average operating expenses per barrel processed dropped 28% to US$4.7.
• Net positive operating cash flow of US$21.6 million before one-off items; unrestricted cash at period end was US$147.3 million.
• Net debt rose to US$501.3 million, driven by payment-in-kind interest and other non-cash items, partly offset by note cancellations.
• Processed volumes up 33% to 23,596 boepd, with titled production up 18.5% to 16,300 boepd, helped by Ural O&G feedstock.
• Safety performance remained strong with zero fatalities and zero lost time injuries.

Revenue, EBITDA and margins – what changed and why

Nostrum delivered US$85.5 million of revenue for the first nine months of 2025, down from US$101.4 million. Management points to two opposing forces: more volumes processed and owned product from Ural O&G and workovers, versus the natural decline at Chinarevskoye and a 14% fall in the average Brent price to US$70.95/bbl.

EBITDA came in at US$26.8 million with a 31.3% margin, both lower than last year. The bright spot is cost control: operating expenses per processed barrel fell 28% to US$4.7, reflecting better processing efficiencies and the benefit of higher throughput. That cost progress cushions the top-line headwind from lower oil prices.

Cash, debt and liquidity – the balance sheet picture

Cash generation held up. Operating cash flow was US$21.6 million before one-off items over 9M 2025. After limited capital spend on Chinarevskoye and Stepnoy Leopard and one-off payments under the management incentive plan, unrestricted cash dipped by only US$3.1 million over the period to US$147.3 million at 30 September 2025. Restricted cash, including the debt service retention account and asset liquidation fund, was US$26.3 million.

The challenge remains leverage. Net debt increased to US$501.3 million at 30 September 2025 (30 June 2025: US$473.1 million; 31 December 2024: US$404.2 million). The step-up mainly reflects US$42.7 million of payment-in-kind interest capitalised on Senior Unsecured Notes, US$14.2 million of accrued cash interest, and a US$50.1 million amortisation of the fair value adjustment. This was partially offset by the cancellation of US$5,628,000 Senior Secured Notes and US$9,629,836 Senior Unsecured Notes in April 2025. The Company also flags an US$8.3 million delayed coupon on the SSNs and SUNs, with references to prior press releases.

My take: liquidity looks adequate for near-term operations, but the trajectory of net debt is a key risk lever. The accrual of PIK interest increases the liability without cash leaving the door, which helps liquidity now but raises the future refinancing burden.

Operations and volumes – third party processing doing the heavy lifting

Processed volumes averaged 23,596 boepd, up 33% year-on-year, including third party condensate tolling. Titled production (volumes Nostrum owns after processing) rose 18.5% to 16,300 boepd, thanks to ramping Ural O&G feedstock and continued workovers to manage expected decline at Chinarevskoye. Sales averaged 14,339 boepd, up 19.9%. The gap between titled production and sales is down to internal dry gas use and delivery timing.

Product mix shifts towards gas and LPG

Product	9M 2025 (boepd)	9M 2024 (boepd)	Y-on-Y change	9M 2025 mix	9M 2024 mix
Crude oil	2,403	2,500	(3.9)%	14.7%	18.2%
Stabilised condensate	1,559	1,824	(14.5)%	9.6%	13.3%
LPG	3,038	2,335	30.1%	18.6%	17.0%
Dry gas	9,300	7,099	31.0%	57.1%	51.5%
Total titled production	16,300	13,758	18.5%	100.0%	100.0%

Note: stabilised condensate volumes exclude Ural O&G processed volumes where Nostrum earns a fixed tolling fee.

Project pipeline – Chinarevskoye drilling and Stepnoy Leopard development

The 2025 drilling programme at Chinarevskoye is deliberately limited and focused on the most economic targets while meeting licence obligations. On 13 October 2025, drilling on well No.116_1 was completed, followed by completion and testing over the next three weeks. Workovers continue to curb the natural decline and improve efficiency.

At the Stepnoy Leopard Fields, the phased Full-Field Development Plan received approval in April 2025. Engineering and selective procurement are progressing, with key projects such as the pipeline to Chinarevskoye and sour gas treatment infrastructure under detailed review to align with objectives and regulations. This is sensible pacing in my view, matching spend with licence commitments.

Third party processing – Ural O&G agreement extended to 2031

The March 2025 agreement with Ural O&G extends third party processing terms to May 2031. This strengthens cash flows, supports efficient plant utilisation, and helps the cost-effective development of the Rozhkovskoye field. The tolling model has been a strategic lever for Nostrum, allowing it to leverage its processing hub even as its own field matures.

HSE and ESG snapshot – solid safety performance

• Zero fatalities and zero lost time injuries in 9M 2025.
• Total Recordable Incident Rate of 0.81 (9M 2024: 0.84).
• Air emissions of 3,087 tonnes against a 2025 permit of 5,188 tonnes.

Safety and environmental compliance are clearly a priority and remain on track.

What this means for investors – my view

Positives: throughput is rising, operating costs per barrel are sharply lower, and the long-dated processing deal with Ural O&G underpins utilisation and fee income. Liquidity at US$147.3 million of unrestricted cash gives the company room to execute its near-term programme and maintain flexibility.

Watch-outs: revenue and EBITDA are down year-on-year due to oil prices and natural decline at Chinarevskoye. Net debt has increased to US$501.3 million largely from non-cash interest and accounting adjustments, and there was an US$8.3 million delayed coupon flagged. The investment case hinges on maintaining high plant uptime, continuing third party volumes, and delivering Stepnoy Leopard on a disciplined timetable.

Net-net, the operational engine is running well, but the balance sheet still carries weight. I would keep an eye on cash interest outflows, refinancing milestones, and the pace of third party feedstock growth through 2026.

Key numbers at a glance

Metric	9M 2025	9M 2024
Revenue	US$85.5 million	US$101.4 million
EBITDA	US$26.8 million	US$34.7 million
EBITDA margin	31.3%	34.2%
Opex per processed barrel	US$4.7	US$6.5
Average processed volumes	23,596 boepd	17,748 boepd
Titled production	16,300 boepd	13,758 boepd
Sales volumes	14,339 boepd	11,956 boepd
Unrestricted cash (30 Sep 2025)	US$147.3 million	Not disclosed for 2024 period end in this release
Restricted cash (30 Sep 2025)	US$26.3 million	Not disclosed for 2024 period end in this release
Net debt (30 Sep 2025)	US$501.3 million	US$404.2 million (31 Dec 2024)

Note: EBITDA is defined as profit or loss before tax, depreciation, depletion and amortisation, share-based compensation, FX, finance costs, interest income, other income and expenses, and one-off items. Net debt equals total notes payable plus accumulated interest less cash and equivalents and DSRA.

Jargon buster

• EBITDA – a proxy for operating profit before non-cash and financing items.
• boepd – barrels of oil equivalent per day, a standardised measure across products.
• Titled production – volumes processed and owned by Nostrum after tolling arrangements.
• SSNs/SUNs – Senior Secured Notes and Senior Unsecured Notes, the company’s debt securities.
• DSRA – debt service retention account, restricted cash set aside for debt service.
• Payment-in-kind (PIK) interest – interest added to the principal rather than paid in cash, increasing debt.

Overall, this is a steady operational performance with improving efficiency and stronger plant utilisation, set against a still-leveraged balance sheet. Execution on Stepnoy Leopard and continued third party processing will be key to the next leg of the story.