Reserves
The Chinarevskoye field (Chinarevskoye) is the only field owned by the Group. Its PSA was grandfathered from 1997 and the licence is valid until the end of 2031.
Initial hydrocarbon discoveries at Chinarevskoye were made during the Soviet era. There have been 103 wells and side-tracks drilled under the PSA between 2004 and 2021. The licence is 100% owned by Zhaikmunai, the Group’s Kazakhstan operating company.
Chinarevskoye is a multi-layer structure with 17 reservoirs and 53 compartments spread over three areas. Commercial hydrocarbons have been found in the Lower Permian, Bashkirian, Bobrikovski, Tournaisian, Frasnian, Mullinski, Ardatovski, and Biyski-Afoninski reservoirs.
Group management provided an estimate of the Chinarevskoye Proven, Probable and Possible reserves as of 31 December 2022, which was audited by the independent petroleum engineering and consulting firm. Ryder Scott (RS) and under the guidelines set forth in the 2018 Petroleum Resources Management System (SPE-PRMS). The audit covered volumes of reserves, production and discounted future net income estimated by management.
Production and future net income were derived from a drilling and well intervention programme to extract the estimated Proven, Probable and Possible reserves at a long-term Brent benchmark average oil price of US$80 for 2023, US$77 for 2024 and US$75 from 2025 onwards. However, execution of the programme to recover the 2P reserves is dependent on Nostrum successfully identifying low risk drilling targets, and to this end seismic and geological work is ongoing, there is no guarantee that the Group will be able to achieve this, which could have a material impact on the Group’s ability to develop the remaining Proven and Probable Reserves at Chinarevskoye.
Total 2P (Proven plus Probable) reserves are 28.3 mmboe as of 31 December 2022, this represents a reserves replacement ratio of 78% after adjusting for reservoir production of 4.9 mmboe in 2022. The net reduction in reserves in the year is due to poorer-than-expected production from the Biyski-Afoninski North-East reservoir gas reserves but being partially offset by better production associated from other producing horizons and the 2022 workover and rigless intervention campaign. The Proven and Probable reserves volume requires 17 CAPEX interventions of which five are rigless, with an additional twelve OPEX well interventions for production maintenance (2021: 34.0 mmboe requiring 17 CAPEX interventions).
Management’s estimates of reserves of 31st December 2022 and a comparison with the reserves of 31st December 2021 are summarised in Table 1.
Table 1 – Nostrum Reserves, mmboe
2022 | 2021 | Change | |
---|---|---|---|
Total PDP Total PUD/PDNP | 19.0 1.2 | 24.8 1.4 | -5.8 0.2 |
Total 1P Total Probable | 20.2 8.1 | 26.2 8.1 | -6.0 0 |
Total 2P Possible | 28.3 8.5 | 34.3 9.7 | -6.0 -1.2 |
Total 3P | 36.8 | 44.0 | -7.2 |
Note: Barrel of oil equivalent (boe) totals are management estimates using a conversion factor of 5.327 mcf/boe.
The Total 1P (Proven) reserves for Chinarevskoye at December 31st 2022 was 20.2 mmboe or 6.0 mmboe down year-on-year due to 2022 production and poorer than expected performance in the Biyski-Afoninski North-East gas condensate reservoir which was partially offset by a positive revision in other reservoirs due to well performance and successful workovers and rigless interventions. 1P reserves volumes are comprised of 19.0 mmboe for Proven, Developed Producing (PDP) from 44 current wells and 1.2 mmboe for the Proven, Undeveloped (PUD) category which assumes the deepening of 1 well, the sidetracking of another and one workover.
The current Probable Undeveloped case drilling assumes 7 interventions including two workover recompletions, side-tracking of four existing wells, and one new vertical well in the Bashkirian reservoir. The Company has suspended all drilling on the field since 2020 and has since executed a targeted well workover and rigless well intervention programme to offset some of the field production decline.
In 2023, Nostrum plans to continue this workover and well intervention programme by targeting a limited number of reserves development wells along with production maintenance, and re-commence the drilling programme later in the year. This programme, together with the 44 existing producers, cover the estimated 2P reserves as at 31 December 2022. It should also be noted that there has been some decrease in volumes in undeveloped reservoirs associated with delays in the re-start of the drilling campaign.
Possible reserves of 8.5 mmboe as at 31 December 2022 (2021: 9.7 mmboe) are attributed to lower declines than the Proven and Probable cases in existing producers and 11 well interventions, the difference to the previous year, in addition to the production, reflects the 2022 workover results i.e., one well upgraded to PDP and one removed (failure in Ch-218).
Table 2 shows the breakdown of each reserves category by products.
Table 2 – Nostrum Reserves, by product and by reserves category
Fluid | Unit | Proven Producing (PDP) | Proven Non-Producing & Undeveloped (PDNP & PUD) | Total Proven (1P) | Probable (2P) | Total Proven plus Probable | Possible (P3) | Total Proven, Probable and Possible |
---|---|---|---|---|---|---|---|---|
Oil/Condensate | barrels | 8.348,769 | 904,886 | 9,253,655 | 3,945,225 | 13,198,880 | 4,434,743 | 17,633,623 |
Plant products (LPG) | barrels | 2,167,716 | 87,635 | 2,255,351 | 791,036 | 3,046,387 | 818,083 | 3,864,470 |
Gas (after shrink) | mmcf | 45,107 | 1,225 | 46,332 | 18,132 | 64,464 | 17,106 | 81,570 |
Gas (after shrink) | boe | 8,449,096 | 249,275 | 8,698,371 | 3,404,084 | 12,102,455 | 3,211,380 | 15,313,835 |
Total | boe | 18,965,581 | 1,241,796 | 20,207,377 | 8,140,345 | 28,347,722 | 8,464,216 | 36,811,928 |
Table 3 – Comparison of reserves by reservoir 2022 versus 2021
31 December 2022 | 31 December 2021 | Change | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Reservoir | Proven, mmboe | Probable, mmboe | Possible, mmboe | 3P, mmboe | Proven, mmboe | Probable, mmboe | Possible, mmboe | 3P, mmboe | Proven, mmboe | Probable, mmboe | Possible, mmboe | 3P, mmboe |
Biyski/Afoninski NE | 7.9 | 2.0 | 1.8 | 11.7 | 11.5 | 1.9 | 1.1 | 14.5 | -3.6 | 0.1 | 0.7 | -2.8 |
Tournaisian NE | 7.3 | 2.5 | 1.4 | 11.2 | 8.9 | 3.1 | 1.6 | 13.6 | -1.6 | -0.6 | -0.2 | -2.4 |
Frasnian N | 0.6 | 1.0 | 2.6 | 4.2 | 0.4 | 0.4 | 2.8 | 3.5 | .0.2 | 0.6 | -0.2 | 0.7 |
Ardatovski NE | 2.0 | 1.8 | 0.1 | 4.0 | 2.5 | 1.8 | 0.3 | 4.6 | -0.5 | 0.0 | -0.2 | -0.6 |
Filippovski | 0.2 | 0.2 | 0.8 | 1.2 | 0.3 | 0.2 | 0.9 | 1.4 | -0.1 | 0.0 | -0.1 | -0.2 |
Tournaisian South | 0.3 | 0.1 | 0.7 | 1.1 | 0.7 | 0.3 | 0.9 | 1.8 | -0.4 | -0.2 | -0.2 | -0.7 |
Mullinski NE | 0.6 | 0.0 | 0.4 | 1.0 | 0.7 | 0.1 | 1.1 | 1.8 | -0.1 | -0.1 | -0.7 | -0.8 |
Bashkirian NE & W | 0.6 | 0.2 | 0.1 | 0.9 | 0.5 | 0.3 | 0.1 | 0.9 | 0.1 | -0.1 | 0.0 | 0.0 |
Tournaisian West | 0.3 | 0.1 | 0.1 | 0.5 | 0.3 | 0.0 | 0.2 | 0.5 | 0.0 | 0.1 | -0.1 | 0.0 |
Mullinski South | 0.0 | 0.0 | 0.4 | 0.4 | 0.0 | 0.0 | 0.7 | 0.7 | 0.0 | 0.0 | -0.3 | -0.3 |
Bobrikovski South | 0.1 | 0.1 | 0.0 | 0.3 | 0.1 | 0.0 | 0.0 | 0.1 | 0.0 | 0.1 | 0.0 | 0.2 |
Ardatovski S | 0.2 | 0.0 | 0.0 | 0.2 | 0.3 | 0.0 | 0.0 | 0.4 | -0.1 | 0.0 | 0.0 | -0.2 |
Mullinski North | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Total | 20.2 | 8.1 | 8.5 | 36.8 | 26.2 | 8.1 | 9.7 | 44.0 | -6.0 | 0.0 | -1.2 | -7.2 |