NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS
2025
ANNUAL REPORT & ACCOUNTS
2025
CONTENTS
STRATEGIC REPORT
AT A GLANCE .............................................................................................. 1
CHAIRMAN’S STATEMENT .......................................................................... 2
MARKET REVIEW ........................................................................................ 3
BUSINESS MODEL ....................................................................................... 5
CHIEF EXECUTIVE OFFICER’S STATEMENT .................................................. 6
STRATEGY ................................................................................................... 8
STRATEGY IN ACTION ................................................................................. 9
STAKEHOLDER ENGAGEMENT .................................................................. 10
KEY FINANCIAL AND NON-FINANCIAL INDICATORS ................................. 12
OPERATIONAL REVIEW ............................................................................. 13
RISK MANAGEMENT ................................................................................. 20
PRINCIPAL RISKS AND UNCERTAINTIES .................................................... 22
VIABILITY STATEMENT .............................................................................. 27
FINANCIAL REVIEW .................................................................................. 29
FIVE-YEAR SUMMARY............................................................................... 33
BOND MATURITY EXTENSION .................................................................. 34
ESG REVIEW.............................................................................................. 35
Non-financial and Sustainability information statement ......................... 55
Climate-related Financial Disclosures ...................................................... 56
CORPORATE GOVERNANCE
INTRODUCTION TO CORPORATE GOVERNANCE ...................................... 63
BOARD OF DIRECTORS ............................................................................. 66
SENIOR MANAGEMENT TEAM ................................................................. 70
GOVERNANCE FRAMEWORK .................................................................... 72
AUDIT COMMITTEE REPORT .................................................................... 75
NOMINATION AND GOVERNANCE COMMITTEE REPORT ........................ 80
STATEMENT FROM THE REMUNERATION COMMITTEE CHAIRMAN ....... 81
2025 ANNUAL REPORT ON REMUNERATION ........................................... 82
DIRECTORS’ REPORT ................................................................................. 94
FINANCIAL REPORT
INDEPENDENT AUDITOR’S REPORT .......................................................... 98
CONSOLIDATED FINANCIAL STATEMENTS .............................................107
PARENT COMPANY FINANCIAL STATEMENTS ........................................135
REGULATORY INFORMATION
INVESTOR INFORMATION ......................................................................149
GLOSSARY ...............................................................................................152
ADDITIONAL DISCLOSURES
NOSTRUM GROUP STRUCTURE CHART ..................................................158
For more details please visit: nostrumoilandgas.com
STRATEGIC REPORT
AT A GLANCE .............................................................................................. 1
CHAIRMAN’S STATEMENT .......................................................................... 2
MARKET REVIEW ........................................................................................ 3
BUSINESS MODEL ....................................................................................... 5
CHIEF EXECUTIVE OFFICER’S STATEMENT .................................................. 6
STRATEGY ................................................................................................... 8
STRATEGY IN ACTION ................................................................................. 9
STAKEHOLDER ENGAGEMENT .................................................................. 10
KEY FINANCIAL AND NON-FINANCIAL INDICATORS ................................. 12
OPERATIONAL REVIEW ............................................................................. 13
RISK MANAGEMENT ................................................................................. 20
PRINCIPAL RISKS AND UNCERTAINTIES .................................................... 22
VIABILITY STATEMENT .............................................................................. 27
FINANCIAL REVIEW .................................................................................. 29
FIVE-YEAR SUMMARY............................................................................... 33
BOND MATURITY EXTENSION .................................................................. 34
ESG REVIEW.............................................................................................. 35
Non-financial and Sustainability information statement ......................... 55
Climate-related Financial Disclosures ...................................................... 56
CORPORATE GOVERNANCE
INTRODUCTION TO CORPORATE GOVERNANCE ...................................... 63
BOARD OF DIRECTORS ............................................................................. 66
SENIOR MANAGEMENT TEAM ................................................................. 70
GOVERNANCE FRAMEWORK .................................................................... 72
AUDIT COMMITTEE REPORT .................................................................... 75
NOMINATION AND GOVERNANCE COMMITTEE REPORT ........................ 80
STATEMENT FROM THE REMUNERATION COMMITTEE CHAIRMAN ....... 81
2025 ANNUAL REPORT ON REMUNERATION ........................................... 82
DIRECTORS’ REPORT ................................................................................. 94
FINANCIAL REPORT
INDEPENDENT AUDITOR’S REPORT .......................................................... 98
CONSOLIDATED FINANCIAL STATEMENTS .............................................107
PARENT COMPANY FINANCIAL STATEMENTS ........................................135
REGULATORY INFORMATION
INVESTOR INFORMATION ......................................................................149
GLOSSARY ...............................................................................................152
ADDITIONAL DISCLOSURES
NOSTRUM GROUP STRUCTURE CHART ..................................................158
For more details please visit: nostrumoilandgas.com
1
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
AT A GLANCE
Implementing the Group’s strategy with a focus on asset utilisation, operational performance and
compliance with licence obligations.
(
2025 Highlights
Financial
2025 2024
Revenue
US$m 118.0 137.1
Opex + G&A expenses 1
US$m 55.5 56.0
Opex + G&A expenses 2
US$ per boe 6.2 7.7
EBITDA
US$m 37.6 48.9
Unrestricted cash at year end
US$m 143.3 150.4
Non-Financial
2025 2024
Total processed volumes
boepd 24,431 19,831
Titled production volumes
boepd 16,867 14,935
Employees
people 595 605
LTIR
incidents per million man-hours Zero Zero
Total greenhouse gas emissions
ktCO 2 e 226 256
Midstream
Ural Oil &Gas LLC
Reliable third-party gas processing with
the extension of our partnership to 2031,
supporting continued utilisation of our
processing infrastructure.
Upstream
Stepnoy Leopard fields
Reassessing development planning and
preserving long-term strategic optionality
while ensuring compliance with licence
obligations.
Chinarevskoye field
Managing production decline while
ensuring compliance with licence
obligations
Safeguarding our assets
and operations
Maintaining safe and reliable operations
while delivering targeted drilling and well
intervention activities.
1 Opex excluding DD&A, inventory adjustment and cost of raw gas purchased. G&A costs
excluding DD&A. See page 33 for details.
2 Opex and G&A costs per boe of processed hydrocarbons.
AT A GLANCE
Implementing the Group’s strategy with a focus on asset utilisation, operational performance and
compliance with licence obligations.
(
2025 Highlights
Financial
2025 2024
Revenue
US$m 118.0 137.1
Opex + G&A expenses 1
US$m 55.5 56.0
Opex + G&A expenses 2
US$ per boe 6.2 7.7
EBITDA
US$m 37.6 48.9
Unrestricted cash at year end
US$m 143.3 150.4
Non-Financial
2025 2024
Total processed volumes
boepd 24,431 19,831
Titled production volumes
boepd 16,867 14,935
Employees
people 595 605
LTIR
incidents per million man-hours Zero Zero
Total greenhouse gas emissions
ktCO 2 e 226 256
Midstream
Ural Oil &Gas LLC
Reliable third-party gas processing with
the extension of our partnership to 2031,
supporting continued utilisation of our
processing infrastructure.
Upstream
Stepnoy Leopard fields
Reassessing development planning and
preserving long-term strategic optionality
while ensuring compliance with licence
obligations.
Chinarevskoye field
Managing production decline while
ensuring compliance with licence
obligations
Safeguarding our assets
and operations
Maintaining safe and reliable operations
while delivering targeted drilling and well
intervention activities.
1 Opex excluding DD&A, inventory adjustment and cost of raw gas purchased. G&A costs
excluding DD&A. See page 33 for details.
2 Opex and G&A costs per boe of processed hydrocarbons.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
2
STRATEGIC REPORT
CHAIRMAN’S STATEMENT
“As we enter 2026, the Board’s priorities are clear:
completion of debt restructuring, maintaining
operational reliability and progressing strategic
development opportunities in a disciplined manner.
These priorities are intended to strengthen the
Company’s capital structure, preserve liquidity and
support sustainable long-term value creation.”
Nikolay Ivin
Chairman and Non-Executive Director
I am pleased to present Nostrum’s 2025 Annual Report following
my appointment as Chairman of the Board in October 2025,
having joined the Board in July 2025.
2025 was a year of transition for the Company, marked by
significant changes in the Board and leadership team, the start of
organisational transformation, active engagement with
stakeholders regarding the refinancing of the Company’s bonds
maturing in June 2026, and a reassessment of the Company’s
near-term and longer-term strategic priorities. It was also a year in
which the Company faced a weaker commodity price environment
and increasing maturity of its production base, together with
significant financing pressures and complex year-end accounting
and disclosure judgments.
The Company has undergone a period of governance and
organisational renewal. The refreshed Board and leadership team
bring relevant expertise across the energy sector, capital markets,
restructuring and legal and compliance matters, which strengthens
the Group’s oversight of operational activities, strategic initiatives,
capital allocation, risk management and financial reporting. The
re-establishment of the internal audit function is an important part
of that framework and supports the Board’s focus on independent
oversight of controls, risk management and financial reporting.
Safety remains fundamental. Another year of lost time incident
(LTI)-free operations reflects our persistent focus on HSE
standards, culture and risk management across the business.
The business continues to benefit from established infrastructure
and meaningful liquidity, although capital allocation is becoming
increasingly selective as the Chinarevskoye field matures, and the
Company addresses its near-term financing requirements. The
Board has been overseeing the reassessment of the development
strategy for the Stepnoy Leopard fields to ensure that any future
investment remains aligned with market conditions, project
economics, funding capacity and the Company’s overall capital
framework. Stepnoy Leopard remains strategically relevant to the
Group’s medium-term asset base, but the Board is approaching its
development with appropriate discipline.
The Board continues to see strategic value in the Group’s
infrastructure platform and in the potential to increase utilisation
of its processing facilities over time. The Group has made progress
in increasing third-party processing throughput through
cooperation with Ural Oil & Gas LLC, with volumes processed at
the Group’s facilities increasing by over 23% during 2025, and it
continues to evaluate other tie-back and processing opportunities
in a disciplined manner. From the Board’s perspective, these
opportunities are important because they may offer a
comparatively capital-efficient route to enhancing utilisation of
existing infrastructure and supporting the Group’s longer-term
strategic optionality. The Board recognises the importance of the
Company’s long-term role in consumable gas supply for
Kazakhstan and remains focused on ensuring that Nostrum Group
operates responsibly, reliably and with discipline in support of all
stakeholders.
Against this background, addressing the June 2026 debt maturity
remains the defining priority for the Board. In early 2026, the
Company reached an agreement in principle with its largest
noteholders representing a majority of both the secured and
unsecured notes. The proposed transaction will be formally put to
all holders of the Company’s bonds immediately upon receiving
the necessary sanctions approvals from OFAC amongst others. If
implemented, the proposed transaction is expected to extend
bond maturities to December 2030 and provide additional
flexibility. The Board views this as an important step towards
stabilising the capital structure and protecting liquidity, while
preserving the ability to pursue longer-term strategic priorities.
This represents a critical step towards a more sustainable capital
structure, although it remains subject to further approvals,
documentation and implementation. Until completion, the Board’s
focus remains on liquidity preservation, disciplined capital
allocation and close oversight of key risks, including financing,
regulatory issues and the Group’s ongoing tax disputes.
While benchmark crude oil prices strengthened in early 2026 amid
heightened geopolitical tensions, the Board continues to place
greater weight on financial resilience, liquidity and disciplined
capital allocation than on short-term market movements. The
Board’s focus remains on ensuring that the Company addresses its
near-term refinancing requirements, whilst maintaining strong
governance and a disciplined approach to decision-making.
As we enter 2026, the Board’s priorities are clear: completion of
debt restructuring, maintaining operational reliability and
progressing strategic development opportunities in a disciplined
manner. These priorities are intended to strengthen the
Company’s capital structure, preserve liquidity and support
sustainable long-term value creation.
Nikolay Ivin
Chairman and Non-Executive Director
STRATEGIC REPORT
CHAIRMAN’S STATEMENT
“As we enter 2026, the Board’s priorities are clear:
completion of debt restructuring, maintaining
operational reliability and progressing strategic
development opportunities in a disciplined manner.
These priorities are intended to strengthen the
Company’s capital structure, preserve liquidity and
support sustainable long-term value creation.”
Nikolay Ivin
Chairman and Non-Executive Director
I am pleased to present Nostrum’s 2025 Annual Report following
my appointment as Chairman of the Board in October 2025,
having joined the Board in July 2025.
2025 was a year of transition for the Company, marked by
significant changes in the Board and leadership team, the start of
organisational transformation, active engagement with
stakeholders regarding the refinancing of the Company’s bonds
maturing in June 2026, and a reassessment of the Company’s
near-term and longer-term strategic priorities. It was also a year in
which the Company faced a weaker commodity price environment
and increasing maturity of its production base, together with
significant financing pressures and complex year-end accounting
and disclosure judgments.
The Company has undergone a period of governance and
organisational renewal. The refreshed Board and leadership team
bring relevant expertise across the energy sector, capital markets,
restructuring and legal and compliance matters, which strengthens
the Group’s oversight of operational activities, strategic initiatives,
capital allocation, risk management and financial reporting. The
re-establishment of the internal audit function is an important part
of that framework and supports the Board’s focus on independent
oversight of controls, risk management and financial reporting.
Safety remains fundamental. Another year of lost time incident
(LTI)-free operations reflects our persistent focus on HSE
standards, culture and risk management across the business.
The business continues to benefit from established infrastructure
and meaningful liquidity, although capital allocation is becoming
increasingly selective as the Chinarevskoye field matures, and the
Company addresses its near-term financing requirements. The
Board has been overseeing the reassessment of the development
strategy for the Stepnoy Leopard fields to ensure that any future
investment remains aligned with market conditions, project
economics, funding capacity and the Company’s overall capital
framework. Stepnoy Leopard remains strategically relevant to the
Group’s medium-term asset base, but the Board is approaching its
development with appropriate discipline.
The Board continues to see strategic value in the Group’s
infrastructure platform and in the potential to increase utilisation
of its processing facilities over time. The Group has made progress
in increasing third-party processing throughput through
cooperation with Ural Oil & Gas LLC, with volumes processed at
the Group’s facilities increasing by over 23% during 2025, and it
continues to evaluate other tie-back and processing opportunities
in a disciplined manner. From the Board’s perspective, these
opportunities are important because they may offer a
comparatively capital-efficient route to enhancing utilisation of
existing infrastructure and supporting the Group’s longer-term
strategic optionality. The Board recognises the importance of the
Company’s long-term role in consumable gas supply for
Kazakhstan and remains focused on ensuring that Nostrum Group
operates responsibly, reliably and with discipline in support of all
stakeholders.
Against this background, addressing the June 2026 debt maturity
remains the defining priority for the Board. In early 2026, the
Company reached an agreement in principle with its largest
noteholders representing a majority of both the secured and
unsecured notes. The proposed transaction will be formally put to
all holders of the Company’s bonds immediately upon receiving
the necessary sanctions approvals from OFAC amongst others. If
implemented, the proposed transaction is expected to extend
bond maturities to December 2030 and provide additional
flexibility. The Board views this as an important step towards
stabilising the capital structure and protecting liquidity, while
preserving the ability to pursue longer-term strategic priorities.
This represents a critical step towards a more sustainable capital
structure, although it remains subject to further approvals,
documentation and implementation. Until completion, the Board’s
focus remains on liquidity preservation, disciplined capital
allocation and close oversight of key risks, including financing,
regulatory issues and the Group’s ongoing tax disputes.
While benchmark crude oil prices strengthened in early 2026 amid
heightened geopolitical tensions, the Board continues to place
greater weight on financial resilience, liquidity and disciplined
capital allocation than on short-term market movements. The
Board’s focus remains on ensuring that the Company addresses its
near-term refinancing requirements, whilst maintaining strong
governance and a disciplined approach to decision-making.
As we enter 2026, the Board’s priorities are clear: completion of
debt restructuring, maintaining operational reliability and
progressing strategic development opportunities in a disciplined
manner. These priorities are intended to strengthen the
Company’s capital structure, preserve liquidity and support
sustainable long-term value creation.
Nikolay Ivin
Chairman and Non-Executive Director
3
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
MARKET REVIEW
Market trends and our response
Oil prices
Brent crude oil prices averaged US$69 per barrel in 2025, reflecting a
decline of around 14% from the previous year. Oil prices remain
subject to periodic volatility driven by macroeconomic conditions,
geopolitical developments, and global supply-demand dynamics.
During the year, Brent crude oil prices declined from a monthly
average of around US$79 per barrel in January to about US$63 per
barrel in December, the lowest monthly level since early 2021. The
downward trend reflected ample global oil supply, rising inventories,
and weaker-than-expected demand growth in several major
economies, including China.
In early 2026, oil markets experienced heightened volatility amid
escalating geopolitical tensions in the Middle East and concerns over
potential disruptions to global oil supply. During the period, Brent
crude prices rose significantly, at times approaching US$120 per
barrel, reflecting elevated risk premiums and uncertainty around
supply availability.
What it means for us
A significant share of the Group’s revenues from oil, condensate, gas
and LPG is directly or indirectly linked to benchmark crude oil prices.
Hence, lower oil and gas prices may reduce the economic viability of
the Group’s operations and proposed operations and adversely affect
its business, results of operations, financial condition and prospects.
In particular, the Group’s ability to produce economically from the
Chinarevskoye Field or any prospective fields will be determined, in
large part, by the difference between the revenue received for its
products and the operating costs, taxation costs, royalties and costs
incurred in transporting and selling those products.
The Group actively monitors the market trends and regional supply
and demand, to be able to quickly react and maximise product
netbacks. The Group periodically assesses necessity for commodity
price hedging contracts, however, considering product mix and cost-
benefit analysis no such contracts were entered into during 2025.
Kazakhstan’s economy
Kazakhstan’s economy remained resilient in 2025, with real GDP
growth of approximately 6.5% compared to the previous year,
reflecting continued expansion across industry, transport,
construction and trade. Economic growth was supported in part by
activity in the energy sector, including oil and gas production and
related services, while remaining sensitive to fluctuations in global
commodity markets and broader external economic trends. Annual
inflation in 2025 reached 12.3%, higher than in 2024 (8.6%), driven
primarily by price increases in food, services and non-food goods amid
broader global price pressures and domestic cost dynamics.
The Kazakhstani Tenge (KZT) weakened against the US dollar in 2025,
depreciating by approximately 11.1% year-on-year, with an average of
521.59 KZT per US dollar compared to average of 469.44 KZT per US
dollar during 2024.
What it means for us
A large portion of the Group’s cost base is denominated in KZT,
including local payroll as well as locally procured materials and
services, and is therefore exposed to domestic inflation. In 2025 these
inflationary pressures were partially offset by an 11.1% depreciation
of the average KZT year-on-year.
The Group’s financial performance, short-term and medium-term
liquidity and achievement of its strategic objectives, may be impacted
by increases in the cost base.
Cost discipline and operational efficiency remained key priorities for
the Group in 2025. During the year, the Group reviewed supplier
contracts, conducted price benchmarking against market offers, and
implemented selected cost optimisation measures, including
transitioning certain contracted services to staff outsourcing
arrangements.
Competitive environment
Kazakhstan and Azerbaijan are the two main oil-producing countries
in the Caspian region whilst Turkmenistan and Uzbekistan are the
predominant gas producers. Russia plays an important role in the
region by providing a transportation corridor between the Caspian
Sea and the Black Sea.
As the world’s largest landlocked country, Kazakhstan depends on an
extended network of pipelines and railways to deliver its products to
export markets. Pipeline exports are primarily delivered via Russia
(Atyrau-Samara and the Caspian Pipeline Consortium pipelines); via
Azerbaijan and Turkey (the Baku- Tbilisi-Ceyhan pipeline); and one via
China (Atasu-Alashankou). Rail exports utilise Kazakhstan’s extensive
rail network, reaching markets throughout the FSU and beyond
(please see below for further details on the impact of Russian
sanctions resulting from the Russia-Ukraine conflict on our business).
What it means for us
Vast distances between Central Asian markets, long-established
trading relationships and in-place infrastructure promote co-
dependency between FSU exporters, which may create regulatory
and administrative burdens for trading.
Kazakhstan naturally benefits from its geo-strategic position between
Russia and China. Nostrum is situated at the heart of the export
corridor that exists between Russia and multiple markets to the west
of the Caspian. However, given the remote location of the Group’s
assets from the international oil trading hubs, the Group is required to
incur substantial transportation costs to deliver its products to those
sales points, or provide equivalent discounts to the offtakers.
The location of Nostrum’s assets in close proximity to some of the
most significant hydrocarbon resources in Kazakhstan, gives an
opportunity for utilization of its spare gas processing capacity to meet
the country’s growing demand for gas.
Geopolitical uncertainty
In 2025, global energy markets continued to operate within a complex
geopolitical environment. Ongoing geopolitical tensions, including the
continued conflict between Russia and Ukraine and periodic tensions
in the Middle East, contributed to market uncertainty and volatility in
global oil prices. At the same time, sanctions and trade restrictions
affecting Russian energy exports continued to influence global trade
flows and pricing dynamics.
The US$60 per barrel price cap mechanism introduced in late 2022 on
the sale of Russian oil remained in place during 2025 and continued to
influence global oil trade flows and pricing dynamics, although amid
generally lower global oil prices its impact on transactions was rather
limited than in earlier periods.
MARKET REVIEW
Market trends and our response
Oil prices
Brent crude oil prices averaged US$69 per barrel in 2025, reflecting a
decline of around 14% from the previous year. Oil prices remain
subject to periodic volatility driven by macroeconomic conditions,
geopolitical developments, and global supply-demand dynamics.
During the year, Brent crude oil prices declined from a monthly
average of around US$79 per barrel in January to about US$63 per
barrel in December, the lowest monthly level since early 2021. The
downward trend reflected ample global oil supply, rising inventories,
and weaker-than-expected demand growth in several major
economies, including China.
In early 2026, oil markets experienced heightened volatility amid
escalating geopolitical tensions in the Middle East and concerns over
potential disruptions to global oil supply. During the period, Brent
crude prices rose significantly, at times approaching US$120 per
barrel, reflecting elevated risk premiums and uncertainty around
supply availability.
What it means for us
A significant share of the Group’s revenues from oil, condensate, gas
and LPG is directly or indirectly linked to benchmark crude oil prices.
Hence, lower oil and gas prices may reduce the economic viability of
the Group’s operations and proposed operations and adversely affect
its business, results of operations, financial condition and prospects.
In particular, the Group’s ability to produce economically from the
Chinarevskoye Field or any prospective fields will be determined, in
large part, by the difference between the revenue received for its
products and the operating costs, taxation costs, royalties and costs
incurred in transporting and selling those products.
The Group actively monitors the market trends and regional supply
and demand, to be able to quickly react and maximise product
netbacks. The Group periodically assesses necessity for commodity
price hedging contracts, however, considering product mix and cost-
benefit analysis no such contracts were entered into during 2025.
Kazakhstan’s economy
Kazakhstan’s economy remained resilient in 2025, with real GDP
growth of approximately 6.5% compared to the previous year,
reflecting continued expansion across industry, transport,
construction and trade. Economic growth was supported in part by
activity in the energy sector, including oil and gas production and
related services, while remaining sensitive to fluctuations in global
commodity markets and broader external economic trends. Annual
inflation in 2025 reached 12.3%, higher than in 2024 (8.6%), driven
primarily by price increases in food, services and non-food goods amid
broader global price pressures and domestic cost dynamics.
The Kazakhstani Tenge (KZT) weakened against the US dollar in 2025,
depreciating by approximately 11.1% year-on-year, with an average of
521.59 KZT per US dollar compared to average of 469.44 KZT per US
dollar during 2024.
What it means for us
A large portion of the Group’s cost base is denominated in KZT,
including local payroll as well as locally procured materials and
services, and is therefore exposed to domestic inflation. In 2025 these
inflationary pressures were partially offset by an 11.1% depreciation
of the average KZT year-on-year.
The Group’s financial performance, short-term and medium-term
liquidity and achievement of its strategic objectives, may be impacted
by increases in the cost base.
Cost discipline and operational efficiency remained key priorities for
the Group in 2025. During the year, the Group reviewed supplier
contracts, conducted price benchmarking against market offers, and
implemented selected cost optimisation measures, including
transitioning certain contracted services to staff outsourcing
arrangements.
Competitive environment
Kazakhstan and Azerbaijan are the two main oil-producing countries
in the Caspian region whilst Turkmenistan and Uzbekistan are the
predominant gas producers. Russia plays an important role in the
region by providing a transportation corridor between the Caspian
Sea and the Black Sea.
As the world’s largest landlocked country, Kazakhstan depends on an
extended network of pipelines and railways to deliver its products to
export markets. Pipeline exports are primarily delivered via Russia
(Atyrau-Samara and the Caspian Pipeline Consortium pipelines); via
Azerbaijan and Turkey (the Baku- Tbilisi-Ceyhan pipeline); and one via
China (Atasu-Alashankou). Rail exports utilise Kazakhstan’s extensive
rail network, reaching markets throughout the FSU and beyond
(please see below for further details on the impact of Russian
sanctions resulting from the Russia-Ukraine conflict on our business).
What it means for us
Vast distances between Central Asian markets, long-established
trading relationships and in-place infrastructure promote co-
dependency between FSU exporters, which may create regulatory
and administrative burdens for trading.
Kazakhstan naturally benefits from its geo-strategic position between
Russia and China. Nostrum is situated at the heart of the export
corridor that exists between Russia and multiple markets to the west
of the Caspian. However, given the remote location of the Group’s
assets from the international oil trading hubs, the Group is required to
incur substantial transportation costs to deliver its products to those
sales points, or provide equivalent discounts to the offtakers.
The location of Nostrum’s assets in close proximity to some of the
most significant hydrocarbon resources in Kazakhstan, gives an
opportunity for utilization of its spare gas processing capacity to meet
the country’s growing demand for gas.
Geopolitical uncertainty
In 2025, global energy markets continued to operate within a complex
geopolitical environment. Ongoing geopolitical tensions, including the
continued conflict between Russia and Ukraine and periodic tensions
in the Middle East, contributed to market uncertainty and volatility in
global oil prices. At the same time, sanctions and trade restrictions
affecting Russian energy exports continued to influence global trade
flows and pricing dynamics.
The US$60 per barrel price cap mechanism introduced in late 2022 on
the sale of Russian oil remained in place during 2025 and continued to
influence global oil trade flows and pricing dynamics, although amid
generally lower global oil prices its impact on transactions was rather
limited than in earlier periods.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
4
STRATEGIC REPORT
In early 2026, geopolitical tensions intensified, particularly following
the escalation of conflict in the Middle East, which disrupted regional
energy infrastructure and threatened shipping through the Strait of
Hormuz, a key transit route for global oil supplies. These
developments contributed to increased volatility in energy markets
and heightened uncertainty over global supply flows.
What it means for us
During 2025, the Group carried out sales of crude oil and gas
condensate primarily via export routes under a mix of pricing
mechanisms. Crude oil sales were predominantly linked to Urals
quotations, while condensate sales were priced based on Brent-linked
mechanisms.
From 2026, the Group has transitioned to a revised pricing formula for
crude oil exports, with KEBCO used as the reference indicator, which
improved the Group’s netbacks.
While recent geopolitical developments in the Middle East create
near-term uncertainty around global energy markets and trade
routes, the resulting increase in Brent prices has a positive effect on
the Group’s revenues.
Kazakhstan’s energy transition strategy
In June 2025, the Government of the Republic of Kazakhstan
approved a new Comprehensive Plan for the Development of the Gas
Industry for 2025 –2029, building on the earlier reform-focused
programme for 2022 –2026. The updated plan places greater
emphasis on expanding processing capacity and infrastructure,
including the construction of new gas processing projects at major
fields such as Karachaganak, Kashagan and Zhanaozen. The plan also
targets an increase in the resource base of marketable natural gas by
approximately 17% (to 34.4 bcm) and an expansion of gas processing
capacity by 5 bcm by 2029.
The plan reflects expectations of significantly higher domestic natural
gas demand, driven by ongoing gasification and the increasing role of
gas-fired power generation, with gas expected to account for
approximately 27% of the energy mix (40 billion kWh).
The plan is aligned with Kazakhstan’s broader commitment to
achieving carbon neutrality by 2060, as set out in Presidential Decree
No. 121 dated February 2, 2023. Achieving this target requires a
transformation of the national energy system, including a shift
towards cleaner sources of energy, increased energy efficiency and
the gradual reduction of reliance on coal. In this context, natural gas
continues to play a key role as a transition fuel, supporting both
energy security and emissions reduction objectives.
What it means for us
Utilisation of existing gas processing infrastructure, including the
Nostrum GTF, is an important factor in addressing Kazakhstan’s
growing gas supply-demand imbalance. Nostrum represents one of
the larger processing facilities in the country and has the potential to
contribute up to 4 bcm of processing capacity annually.
The Group has also developed a technically verified project to receive
and process raw gas from the nearby Karachaganak field, which could
provide a potentially capital-efficient route to increasing domestic gas
processing capacity.
STRATEGIC REPORT
In early 2026, geopolitical tensions intensified, particularly following
the escalation of conflict in the Middle East, which disrupted regional
energy infrastructure and threatened shipping through the Strait of
Hormuz, a key transit route for global oil supplies. These
developments contributed to increased volatility in energy markets
and heightened uncertainty over global supply flows.
What it means for us
During 2025, the Group carried out sales of crude oil and gas
condensate primarily via export routes under a mix of pricing
mechanisms. Crude oil sales were predominantly linked to Urals
quotations, while condensate sales were priced based on Brent-linked
mechanisms.
From 2026, the Group has transitioned to a revised pricing formula for
crude oil exports, with KEBCO used as the reference indicator, which
improved the Group’s netbacks.
While recent geopolitical developments in the Middle East create
near-term uncertainty around global energy markets and trade
routes, the resulting increase in Brent prices has a positive effect on
the Group’s revenues.
Kazakhstan’s energy transition strategy
In June 2025, the Government of the Republic of Kazakhstan
approved a new Comprehensive Plan for the Development of the Gas
Industry for 2025 –2029, building on the earlier reform-focused
programme for 2022 –2026. The updated plan places greater
emphasis on expanding processing capacity and infrastructure,
including the construction of new gas processing projects at major
fields such as Karachaganak, Kashagan and Zhanaozen. The plan also
targets an increase in the resource base of marketable natural gas by
approximately 17% (to 34.4 bcm) and an expansion of gas processing
capacity by 5 bcm by 2029.
The plan reflects expectations of significantly higher domestic natural
gas demand, driven by ongoing gasification and the increasing role of
gas-fired power generation, with gas expected to account for
approximately 27% of the energy mix (40 billion kWh).
The plan is aligned with Kazakhstan’s broader commitment to
achieving carbon neutrality by 2060, as set out in Presidential Decree
No. 121 dated February 2, 2023. Achieving this target requires a
transformation of the national energy system, including a shift
towards cleaner sources of energy, increased energy efficiency and
the gradual reduction of reliance on coal. In this context, natural gas
continues to play a key role as a transition fuel, supporting both
energy security and emissions reduction objectives.
What it means for us
Utilisation of existing gas processing infrastructure, including the
Nostrum GTF, is an important factor in addressing Kazakhstan’s
growing gas supply-demand imbalance. Nostrum represents one of
the larger processing facilities in the country and has the potential to
contribute up to 4 bcm of processing capacity annually.
The Group has also developed a technically verified project to receive
and process raw gas from the nearby Karachaganak field, which could
provide a potentially capital-efficient route to increasing domestic gas
processing capacity.
5
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
BUSINESS MODEL
Creating value for our stakeholders
Nostrum’s business model combines upstream production with gas processing infrastructure to create value for shareholders, bondholders and
other stakeholders through disciplined operations, capital allocation and the efficient utilisation of its asset base. In doing so, the Group also seeks
to operate responsibly in Kazakhstan and to preserve the strategic value of its infrastructure and resource base over the long term.
Our resources and relationships
The Group’s resources, infrastructure and relationships support delivery across its upstream and processing activities.
Assets & Operations
• Total 2P reserves: 122 mmboe
• GTF processing capacity: 4.2 bcma
• Power generation capacity: 41 MW
• Owned and operated fields: 2
• Liquids storage capacity: 40,000 m³
Financial
• Total assets at 2025 end: US$502m
• Cash at 2025 end: US$143m
People
• Employees: 595
Local Partners
• QazaqGaz NC
• KazTransOil
• Ural Oil & Gas LLC
• Citibank and Halyk Bank
Our value creation model
Our business model combines upstream production with gas processing infrastructure, enabling us to process both own production and third-
party volumes.
Upstream
Nostrum owned & operated assets
Third-party Feedstock
Gas processing opportunities in the region
Chinarevskoye Field Stepnoy Leopard fields Ural O&G Karachaganak field
Producing asset Asset under development Processing established Potential tie-back opportunity
2P reserves:
11.8 mmboe
2P reserves:
110 mmboe
(80% Nostrum working
interest)
Expected recoverable reserves
158.8 1 mmboe, including 101.5
mmboe of gas and 57.3
mmboe of condensate
Possible processing tie-back
opportunities.
Estimated gross reserves of
over 2.4 billion barrels of
condensate and 16 tcf of gas.
Gas Processing and Logistics Infrastructure and Capabilities
4.2 bcma gas processing
facilities. Strategic location,
attractive access to multiple
transportation routes.
An export hub with established
logistics infrastructure,
including pipeline connections
and an automated rail loading
terminal.
An established third-party gas
processor with an export hub
and potential to expand
midstream operations over
time.
Established track record of
delivering large-scale
infrastructure and complex
construction projects.
1 Source: MOL Group announcement 22 December 2023, based on the Kazakhstan State Balance Reserves Report
Stakeholder value creation
The value we create for
our people:
• Nostrum remains one of the significant
employers in north-western Kazakhstan.
91% of all employees are Kazakhstani.
• In 2025, our employees received a total of
47,928 hours of training, averaging 99 hours
per employee.
• In 2025 we invested US$0.6m in training
programmes for Kazakhstani specialists and
local communities.
• In 2025, we achieved zero LTIR and a TRIR
of 0.9 per million man-hours, underscoring
our uncompromising commitment to
workplace safety.
• We focus on ensuring fair recruitment
practices, supporting employee well-being,
and maintaining consistent HR standards
across the Group.
The value we create for
our host communities:
• Since 1997, Nostrum has invested over
US$2.8bn into Kazakhstan.
• We contributed US$23.8m of taxes in 2025,
bringing our total tax and other payments
to government in Kazakhstan to over
US$1.2bn since 1997.
• Throughout 2025, we continued to support
the development of local communities
through social and charitable initiatives.
• In 2025, we allocated US$53.2 thousand
(KZT 27.7 million) in social initiatives, with a
focus on regional development, education
and cultural programmes.
• In 2025, 90.4% of our procurement
spending went to Kazakhstani companies
(up from 88% in 2024).
The value we create for
our shareholders and bondholders:
• Continuing to assess improvements in
recovery of Chinarevskoye reserves and the
optimal development approach for the
Stepnoye Leopard fields.
• Average processed volumes, including
third-party condensate tolling, increased
23.2% Yr/Yr to 24,431 boepd.
• Net operating cash flow before one-off
items of US$29.9m (see page 31 for details).
• US$143.3m free cash at the end of 2025.
• US$17.0m held in the DSRA at year end.
BUSINESS MODEL
Creating value for our stakeholders
Nostrum’s business model combines upstream production with gas processing infrastructure to create value for shareholders, bondholders and
other stakeholders through disciplined operations, capital allocation and the efficient utilisation of its asset base. In doing so, the Group also seeks
to operate responsibly in Kazakhstan and to preserve the strategic value of its infrastructure and resource base over the long term.
Our resources and relationships
The Group’s resources, infrastructure and relationships support delivery across its upstream and processing activities.
Assets & Operations
• Total 2P reserves: 122 mmboe
• GTF processing capacity: 4.2 bcma
• Power generation capacity: 41 MW
• Owned and operated fields: 2
• Liquids storage capacity: 40,000 m³
Financial
• Total assets at 2025 end: US$502m
• Cash at 2025 end: US$143m
People
• Employees: 595
Local Partners
• QazaqGaz NC
• KazTransOil
• Ural Oil & Gas LLC
• Citibank and Halyk Bank
Our value creation model
Our business model combines upstream production with gas processing infrastructure, enabling us to process both own production and third-
party volumes.
Upstream
Nostrum owned & operated assets
Third-party Feedstock
Gas processing opportunities in the region
Chinarevskoye Field Stepnoy Leopard fields Ural O&G Karachaganak field
Producing asset Asset under development Processing established Potential tie-back opportunity
2P reserves:
11.8 mmboe
2P reserves:
110 mmboe
(80% Nostrum working
interest)
Expected recoverable reserves
158.8 1 mmboe, including 101.5
mmboe of gas and 57.3
mmboe of condensate
Possible processing tie-back
opportunities.
Estimated gross reserves of
over 2.4 billion barrels of
condensate and 16 tcf of gas.
Gas Processing and Logistics Infrastructure and Capabilities
4.2 bcma gas processing
facilities. Strategic location,
attractive access to multiple
transportation routes.
An export hub with established
logistics infrastructure,
including pipeline connections
and an automated rail loading
terminal.
An established third-party gas
processor with an export hub
and potential to expand
midstream operations over
time.
Established track record of
delivering large-scale
infrastructure and complex
construction projects.
1 Source: MOL Group announcement 22 December 2023, based on the Kazakhstan State Balance Reserves Report
Stakeholder value creation
The value we create for
our people:
• Nostrum remains one of the significant
employers in north-western Kazakhstan.
91% of all employees are Kazakhstani.
• In 2025, our employees received a total of
47,928 hours of training, averaging 99 hours
per employee.
• In 2025 we invested US$0.6m in training
programmes for Kazakhstani specialists and
local communities.
• In 2025, we achieved zero LTIR and a TRIR
of 0.9 per million man-hours, underscoring
our uncompromising commitment to
workplace safety.
• We focus on ensuring fair recruitment
practices, supporting employee well-being,
and maintaining consistent HR standards
across the Group.
The value we create for
our host communities:
• Since 1997, Nostrum has invested over
US$2.8bn into Kazakhstan.
• We contributed US$23.8m of taxes in 2025,
bringing our total tax and other payments
to government in Kazakhstan to over
US$1.2bn since 1997.
• Throughout 2025, we continued to support
the development of local communities
through social and charitable initiatives.
• In 2025, we allocated US$53.2 thousand
(KZT 27.7 million) in social initiatives, with a
focus on regional development, education
and cultural programmes.
• In 2025, 90.4% of our procurement
spending went to Kazakhstani companies
(up from 88% in 2024).
The value we create for
our shareholders and bondholders:
• Continuing to assess improvements in
recovery of Chinarevskoye reserves and the
optimal development approach for the
Stepnoye Leopard fields.
• Average processed volumes, including
third-party condensate tolling, increased
23.2% Yr/Yr to 24,431 boepd.
• Net operating cash flow before one-off
items of US$29.9m (see page 31 for details).
• US$143.3m free cash at the end of 2025.
• US$17.0m held in the DSRA at year end.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
6
STRATEGIC REPORT
CHIEF EXECUTIVE OFFICER’S
STATEMENT
“I would like to extend my sincere gratitude to
the Board and to all the women and men of the
Nostrum Team. Your dedication,
professionalism, and unwavering commitment
throughout 2025 and early 2026 have been
central to the Group’s resilience and progress.”
Viktor Gladun
Chief Executive Officer
2025 was a year of changes and transformation for Nostrum amid
challenging macroeconomic environment.
As the new management came onboard under my supervision, safety
and the wellbeing of our people remained our top priority. In 2025,
we maintained LTI-free operations and continued to strengthen our
safety culture, operational standards, and environmental
performance. Alongside this, we increased our focus on the
development of human capital – enhancing skills, accountability and
leadership across the organisation. We believe that a strong, capable
and engaged workforce is fundamental to operational resilience and
long-term value creation.
Financial performance remained resilient during FY2025, with
revenues of US$118.0m and resulting EBITDA of US$37.6m. These
results reflect lower realised prices (as a function of 13% lower Brent
prices year-on-year) and an annual 21% natural production decline at
Chinarevskoye, which were partially offset by an increase in third-
party throughput volumes and continued cost discipline.
Building on this foundation, 2025 was a year of disciplined
transformation for the Group. While we focused on managing liquidity
and strengthening our financial position, we undertook a focused
internal programme to strengthen the structural foundations of the
business, revisiting our control framework, operational processes and
governance structure. This included enhancing internal controls and
re-establishing an internal audit function, which had not been in place
for several years.
With the changes in the Board composition, and new members
bringing fresh view of the business and additional expertise and skill
set, we have started re-assessing each of the strategic vectors of the
Group, including revisiting our drilling and capital allocation strategy
at the Chinarevskoye and Stepnoy Leopard fields, looking at our
growth opportunities, including the potential Karachaganak field tie-
back, and focusing on the Group’s debt maturity and reaching an in-
principle agreement with noteholders to extend our debt maturity
profile.
Health, Safety and Environment
Ensuring the safety of our employees and contractors remains a core
priority for the Company. Throughout the year, we continued to
reinforce established health and safety practices, with particular focus
on contractor safety, road safety and risk awareness. Targeted HSE
workshops and ongoing safety communications were used to
reinforce expectations across the organisation and among
contractors, and following results were achieved in 2025 in key health
and safety indicators:
• No Lost Time Incidents were recorded in 2025, and Nostrum
maintained more than two consecutive years of LTI-free operations.
• The Total Recordable Incidents Frequency rate increased to 0.92 per
million man-hours, reflecting a small number of non-severe incidents.
Each incident was investigated, and corrective actions were
implemented to reduce the risk of recurrence.
• One road traffic incident involving a contractor vehicle occurred during
the year. No injuries were sustained, and only minor damage was
reported. The incident was reviewed in detail, and additional preventive
measures were introduced.
Alongside operational safety, we continued to focus on energy and
emissions management strategy across all our operations. Compared
to 2024, emissions decreased as a result of lower gas utilisation
volumes and improved operational efficiency. Total GHG emissions in
2025 amounted to 226.2 thousand tons, representing a 12% reduction
year-on-year.
The Company also remained engaged with local communities in the
West Kazakhstan region. During the year, financial support was
provided to address priority community needs, with a focus on
education and youth development.
Production and Processing Operations
Production at the Chinarevskoye field averaged 6,756 boepd in 2025,
representing an expected 21% decline compared to 2024, and
reflecting natural reservoir depletion. To support production from
ageing wells, the LPS3 project was completed in the fourth quarter of
2025, increasing low-pressure system capacity by 10,400 standard
cubic metres per hour to a total installed capacity of 58,400 standard
cubic metres per hour. We will continue looking into ways to minimise
production decline, and expect that average daily production in 2026
to be between 5,000 boepd and 6,000 boepd.
Throughout the year, the Company continued to process third-party
hydrocarbons from Ural Oil & Gas, which helped increase the average
processed volumes by 23.2% to 24,431 boepd. The revised processing
agreement signed with Ural Oil & Gas in March 2025 through extends
this partnership to May 2031, and secures stable cash flows and
efficient utilisation of processing facilities as well as phased
development of the Rozhkovskoye field.
Chinarevskoye Drilling Programme
As the Chinarevskoye field continues to mature and experience a
natural production decline, activities in 2025 focused on targeted
limited-scale drilling and selective well interventions. Given the late
stage of the field maturity and the limited remaining licence term, the
economics of additional development are challenging. Accordingly,
capital deployment was deliberately constrained to opportunities with
clear risk-adjusted justification.
STRATEGIC REPORT
CHIEF EXECUTIVE OFFICER’S
STATEMENT
“I would like to extend my sincere gratitude to
the Board and to all the women and men of the
Nostrum Team. Your dedication,
professionalism, and unwavering commitment
throughout 2025 and early 2026 have been
central to the Group’s resilience and progress.”
Viktor Gladun
Chief Executive Officer
2025 was a year of changes and transformation for Nostrum amid
challenging macroeconomic environment.
As the new management came onboard under my supervision, safety
and the wellbeing of our people remained our top priority. In 2025,
we maintained LTI-free operations and continued to strengthen our
safety culture, operational standards, and environmental
performance. Alongside this, we increased our focus on the
development of human capital – enhancing skills, accountability and
leadership across the organisation. We believe that a strong, capable
and engaged workforce is fundamental to operational resilience and
long-term value creation.
Financial performance remained resilient during FY2025, with
revenues of US$118.0m and resulting EBITDA of US$37.6m. These
results reflect lower realised prices (as a function of 13% lower Brent
prices year-on-year) and an annual 21% natural production decline at
Chinarevskoye, which were partially offset by an increase in third-
party throughput volumes and continued cost discipline.
Building on this foundation, 2025 was a year of disciplined
transformation for the Group. While we focused on managing liquidity
and strengthening our financial position, we undertook a focused
internal programme to strengthen the structural foundations of the
business, revisiting our control framework, operational processes and
governance structure. This included enhancing internal controls and
re-establishing an internal audit function, which had not been in place
for several years.
With the changes in the Board composition, and new members
bringing fresh view of the business and additional expertise and skill
set, we have started re-assessing each of the strategic vectors of the
Group, including revisiting our drilling and capital allocation strategy
at the Chinarevskoye and Stepnoy Leopard fields, looking at our
growth opportunities, including the potential Karachaganak field tie-
back, and focusing on the Group’s debt maturity and reaching an in-
principle agreement with noteholders to extend our debt maturity
profile.
Health, Safety and Environment
Ensuring the safety of our employees and contractors remains a core
priority for the Company. Throughout the year, we continued to
reinforce established health and safety practices, with particular focus
on contractor safety, road safety and risk awareness. Targeted HSE
workshops and ongoing safety communications were used to
reinforce expectations across the organisation and among
contractors, and following results were achieved in 2025 in key health
and safety indicators:
• No Lost Time Incidents were recorded in 2025, and Nostrum
maintained more than two consecutive years of LTI-free operations.
• The Total Recordable Incidents Frequency rate increased to 0.92 per
million man-hours, reflecting a small number of non-severe incidents.
Each incident was investigated, and corrective actions were
implemented to reduce the risk of recurrence.
• One road traffic incident involving a contractor vehicle occurred during
the year. No injuries were sustained, and only minor damage was
reported. The incident was reviewed in detail, and additional preventive
measures were introduced.
Alongside operational safety, we continued to focus on energy and
emissions management strategy across all our operations. Compared
to 2024, emissions decreased as a result of lower gas utilisation
volumes and improved operational efficiency. Total GHG emissions in
2025 amounted to 226.2 thousand tons, representing a 12% reduction
year-on-year.
The Company also remained engaged with local communities in the
West Kazakhstan region. During the year, financial support was
provided to address priority community needs, with a focus on
education and youth development.
Production and Processing Operations
Production at the Chinarevskoye field averaged 6,756 boepd in 2025,
representing an expected 21% decline compared to 2024, and
reflecting natural reservoir depletion. To support production from
ageing wells, the LPS3 project was completed in the fourth quarter of
2025, increasing low-pressure system capacity by 10,400 standard
cubic metres per hour to a total installed capacity of 58,400 standard
cubic metres per hour. We will continue looking into ways to minimise
production decline, and expect that average daily production in 2026
to be between 5,000 boepd and 6,000 boepd.
Throughout the year, the Company continued to process third-party
hydrocarbons from Ural Oil & Gas, which helped increase the average
processed volumes by 23.2% to 24,431 boepd. The revised processing
agreement signed with Ural Oil & Gas in March 2025 through extends
this partnership to May 2031, and secures stable cash flows and
efficient utilisation of processing facilities as well as phased
development of the Rozhkovskoye field.
Chinarevskoye Drilling Programme
As the Chinarevskoye field continues to mature and experience a
natural production decline, activities in 2025 focused on targeted
limited-scale drilling and selective well interventions. Given the late
stage of the field maturity and the limited remaining licence term, the
economics of additional development are challenging. Accordingly,
capital deployment was deliberately constrained to opportunities with
clear risk-adjusted justification.
7
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
Drilling of the well Ch-116_1 was successfully completed in October
2025 within the planned timetable and at a lower-than-budgeted cost,
and the well was brought on production in late November 2025
following perforation, stimulation and flowline tie-in. Initial
production rates were above the modelled range before stabilising at
expected levels. During the year, the Group reassessed the second
proposed well, Ch-725, and decided not to proceed with drilling
because its limited productive potential, high capital cost and the
relatively short remaining licence term rendered the well uneconomic.
In parallel, the rig-based workover programme focused on addressing
ESP failures and selective recompletions to shallower reservoirs. Well
Ch-220 was recompleted to the Tournaisian reservoir and delivered
initial production rates in line with expectations. Two additional wells,
Ch-217 and Ch-208, were recompleted to test the Filippovski
reservoir; both proved unsuccessful due to higher-than-anticipated
water saturation and low permeability. Taken together, these results
reflect the increasing technical complexity associated with extracting
remaining reserves from mature intervals.
The Group also prioritised rigless well interventions during the year,
including additional perforations, acid stimulations and
recompletions, applied selectively to support production optimisation
and operational efficiency.
Subsurface work to update the geological model and evaluate
additional workover and drilling candidates is ongoing; however, the
remaining licence term continues to constrain the economics of
appraisal and step-out drilling. In 2026, the Group will reevaluate the
requirements and necessity of the drilling and well intervention
campaigns, and will provide an update throughout the course of the
year.
Stepnoy Leopard Fields
With Stepnoy Leopard continuing to represent a material component
of the Group’s asset base, in 2025 we took a fresh look at the
development strategy for the Stepnoy Leopard fields and began a
process of reassessing our options. These assessments take into
account project economics, access to existing processing
infrastructure, sales delivery points, regulatory requirements and
licence commitments, to ensure alignment with current market
conditions and capital allocation priorities.
As part of this review, in-house subsurface analysis continued across
the four Eastern Fields to support further technical refinement and
inform the preparation of an updated Competent Person’s Report.
Upon completion of this work, a similar evaluation of the Kameskoye
Field is planned as part of a phased development approach.
As a result of this review, amendments to the Field Development Plan
may become necessary, reflecting a potential revision of the
development concept and the corresponding production start-up
timeline. The first planned production well is currently scheduled for
drilling in the second half of 2026 and is expected to include an
extended testing programme to support confirmation or refinement
of the proposed development approach.
Financial Performance
The Group’s financial performance in 2025 reflected higher third-party
processed volumes and continued cost discipline, which was offset by
the natural production decline at the mature Chinarevskoye field and
a weaker average Brent oil price of US$69.1/bbl (2024: US$80.6/bbl).
Revenue for the year was US$118.0m (2024: US$137.1m). The decline
in revenue was primarily the result of a 21% decrease in
Chinarevskoye production and 14.3% lower Brent prices, partially
offset by increased third-party processed volumes from UOG.
During 2025, the Group generated US$29.9m of cash from operations
(2024: US$33.1m), before the one-time payment of US$16.35m under
the management incentive plan. Capital expenditures totalled
US$22.9m (2024: US$32.5m), reflecting limited capital spending at
Chinarevskoye and the Stepnoy Leopard fields. Net cash outflow for
the year amounted to US$7.1m (2024: outflow of US$11.3m),
resulting in lower unrestricted cash of US$143.3m (2024: US$150.4m)
at year end. The Group recognised an impairment charge of US$87.2m
(2024: impairment reversal of US$86.7m), which contributed to a total
comprehensive loss for the year of US$214.3m (2024: loss of
US$26.8m), or a loss of US$1.29 per share (2024: loss of US$0.15 per
share).
Cost control remains a priority as we seek to preserve liquidity while
managing a maturing asset base. The Group continues to focus on
maximising facility uptime and improving operating efficiencies.
As at the year end, the Group had US$701.8m in senior secured notes
(SSN) and senior unsecured notes (SUN) payable (2024: US$571.2m)
which have a current maturity date of 30 June 2026.
Reflecting the importance of refinancing the Group’s debt, the Board
and management continued to engage with key stakeholders during
the year with the objective of supporting a sustainable capital
structure and maintaining financial flexibility. More recently, the
Group reached an agreement in principle to extend the maturity of
the notes with a group of noteholders representing a majority of the
SSNs and SUNs.
Withholding tax matters
During the year, our main operating subsidiary, Zhaikmunai LLP,
continued to engage with the tax authorities of the Republic of
Kazakhstan regarding additional withholding tax claims arising from
re-audits of 2018 –2020. Following the rejection of Zhaikmunai’s
appeal in respect of the 2018 and 2019 reassessments, judicial
proceedings have been initiated. The Group considers these claims to
be unfounded and continues to take appropriate steps while
protecting its interests.
Conclusion
I would like to extend my sincere gratitude to the Board and to all the
women and men of the Nostrum Team. Your dedication,
professionalism, and unwavering commitment throughout 2025 and
early 2026 have been central to the Group’s resilience during a
demanding period. Against a weaker oil price backdrop and a year of
internal strengthening, we remained focused on reinforcing the
Group’s human capital and governance framework, reassessing field
investment and development options, and maintaining financial
discipline.
I also thank our investors and partners for their continued trust and
support, which remain essential to the Group’s stability and the
realisation of its long-term value.
As we move into 2026, our immediate priorities are clear: maintaining
safe and reliable operations, preserving financial resilience, and
completing the bond maturity extension. Successful implementation
of that transaction would provide the Group with greater financial
flexibility and a more stable platform from which to pursue its
strategic priorities.
Viktor Gladun
Chief Executive Officer
Drilling of the well Ch-116_1 was successfully completed in October
2025 within the planned timetable and at a lower-than-budgeted cost,
and the well was brought on production in late November 2025
following perforation, stimulation and flowline tie-in. Initial
production rates were above the modelled range before stabilising at
expected levels. During the year, the Group reassessed the second
proposed well, Ch-725, and decided not to proceed with drilling
because its limited productive potential, high capital cost and the
relatively short remaining licence term rendered the well uneconomic.
In parallel, the rig-based workover programme focused on addressing
ESP failures and selective recompletions to shallower reservoirs. Well
Ch-220 was recompleted to the Tournaisian reservoir and delivered
initial production rates in line with expectations. Two additional wells,
Ch-217 and Ch-208, were recompleted to test the Filippovski
reservoir; both proved unsuccessful due to higher-than-anticipated
water saturation and low permeability. Taken together, these results
reflect the increasing technical complexity associated with extracting
remaining reserves from mature intervals.
The Group also prioritised rigless well interventions during the year,
including additional perforations, acid stimulations and
recompletions, applied selectively to support production optimisation
and operational efficiency.
Subsurface work to update the geological model and evaluate
additional workover and drilling candidates is ongoing; however, the
remaining licence term continues to constrain the economics of
appraisal and step-out drilling. In 2026, the Group will reevaluate the
requirements and necessity of the drilling and well intervention
campaigns, and will provide an update throughout the course of the
year.
Stepnoy Leopard Fields
With Stepnoy Leopard continuing to represent a material component
of the Group’s asset base, in 2025 we took a fresh look at the
development strategy for the Stepnoy Leopard fields and began a
process of reassessing our options. These assessments take into
account project economics, access to existing processing
infrastructure, sales delivery points, regulatory requirements and
licence commitments, to ensure alignment with current market
conditions and capital allocation priorities.
As part of this review, in-house subsurface analysis continued across
the four Eastern Fields to support further technical refinement and
inform the preparation of an updated Competent Person’s Report.
Upon completion of this work, a similar evaluation of the Kameskoye
Field is planned as part of a phased development approach.
As a result of this review, amendments to the Field Development Plan
may become necessary, reflecting a potential revision of the
development concept and the corresponding production start-up
timeline. The first planned production well is currently scheduled for
drilling in the second half of 2026 and is expected to include an
extended testing programme to support confirmation or refinement
of the proposed development approach.
Financial Performance
The Group’s financial performance in 2025 reflected higher third-party
processed volumes and continued cost discipline, which was offset by
the natural production decline at the mature Chinarevskoye field and
a weaker average Brent oil price of US$69.1/bbl (2024: US$80.6/bbl).
Revenue for the year was US$118.0m (2024: US$137.1m). The decline
in revenue was primarily the result of a 21% decrease in
Chinarevskoye production and 14.3% lower Brent prices, partially
offset by increased third-party processed volumes from UOG.
During 2025, the Group generated US$29.9m of cash from operations
(2024: US$33.1m), before the one-time payment of US$16.35m under
the management incentive plan. Capital expenditures totalled
US$22.9m (2024: US$32.5m), reflecting limited capital spending at
Chinarevskoye and the Stepnoy Leopard fields. Net cash outflow for
the year amounted to US$7.1m (2024: outflow of US$11.3m),
resulting in lower unrestricted cash of US$143.3m (2024: US$150.4m)
at year end. The Group recognised an impairment charge of US$87.2m
(2024: impairment reversal of US$86.7m), which contributed to a total
comprehensive loss for the year of US$214.3m (2024: loss of
US$26.8m), or a loss of US$1.29 per share (2024: loss of US$0.15 per
share).
Cost control remains a priority as we seek to preserve liquidity while
managing a maturing asset base. The Group continues to focus on
maximising facility uptime and improving operating efficiencies.
As at the year end, the Group had US$701.8m in senior secured notes
(SSN) and senior unsecured notes (SUN) payable (2024: US$571.2m)
which have a current maturity date of 30 June 2026.
Reflecting the importance of refinancing the Group’s debt, the Board
and management continued to engage with key stakeholders during
the year with the objective of supporting a sustainable capital
structure and maintaining financial flexibility. More recently, the
Group reached an agreement in principle to extend the maturity of
the notes with a group of noteholders representing a majority of the
SSNs and SUNs.
Withholding tax matters
During the year, our main operating subsidiary, Zhaikmunai LLP,
continued to engage with the tax authorities of the Republic of
Kazakhstan regarding additional withholding tax claims arising from
re-audits of 2018 –2020. Following the rejection of Zhaikmunai’s
appeal in respect of the 2018 and 2019 reassessments, judicial
proceedings have been initiated. The Group considers these claims to
be unfounded and continues to take appropriate steps while
protecting its interests.
Conclusion
I would like to extend my sincere gratitude to the Board and to all the
women and men of the Nostrum Team. Your dedication,
professionalism, and unwavering commitment throughout 2025 and
early 2026 have been central to the Group’s resilience during a
demanding period. Against a weaker oil price backdrop and a year of
internal strengthening, we remained focused on reinforcing the
Group’s human capital and governance framework, reassessing field
investment and development options, and maintaining financial
discipline.
I also thank our investors and partners for their continued trust and
support, which remain essential to the Group’s stability and the
realisation of its long-term value.
As we move into 2026, our immediate priorities are clear: maintaining
safe and reliable operations, preserving financial resilience, and
completing the bond maturity extension. Successful implementation
of that transaction would provide the Group with greater financial
flexibility and a more stable platform from which to pursue its
strategic priorities.
Viktor Gladun
Chief Executive Officer
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
8
STRATEGIC REPORT
STRATEGY
The Group continues to focus on maximising the value of its gas processing infrastructure through
disciplined utilisation and capital allocation .
Our purpose
To create value for shareholders and other
stakeholders by operating as an integrated
business with a focus on safety, discipline
and efficient use of the Group’s asset base.
Our vision
To contribute profitably and responsibly to
Kazakhstan’s commercial gas supply while
supporting a cleaner energy mix over time.
Our values
We are trustworthy and reliable, take our
corporate, social and ecological responsibilities
seriously, and are dedicated to the health,
safety and wellbeing of our employees.
Strategic pillars 2026 priorities Risks 2026-2027 Forecasts & Objectives
Developing upstream potential
We continue to assess the
Group’s long-term growth
options while broadening
opportunities through selective
investment and portfolio
development.
• Revisit Chinarevskoye field
drilling programme and
requirements.
• Maximise uptime of existing
wells and production facilities.
• Potential drilling of one well
and progression of the Stepnoy
Leopard development
programme, subject to ongoing
review.
• Significant subsurface
uncertainties and risks could
negatively impact drilling and
appraisal campaigns.
• Impact of equipment failure.
• At low production levels,
unexpected sub-surface events
could severely impact the
Group’s operating cash flow.
• Re-evaluation of the drilling
programme at Chinarevskoye
field.
• Progress the Stepnoy Leopard
fields development plan in line
with current review outcomes,
regulatory requirements and
capital allocation priorities.
• Reduce decline rates in existing
Chinarevskoye production wells.
Pursuing new gas processing
opportunities
We continue to assess ways to
commercialise spare capacity in
the Group’s gas processing
facilities and to increase third-
party throughput over time.
• Continue processing Ural O&G
volumes and support
implementation of fiscal
metering arrangements.
• Advance ongoing discussions
with third parties interested in
supplying raw gas to take
advantage of the Group’s gas
processing capacity.
• Ural O&G project execution
delays with installation of fiscal
metering.
• Ongoing negotiations with
various counter-parties are
complex and commercially
sensitive, and there can be no
certainty that agreement will
be reached.
• Installation of fiscal metering by
Ural O&G.
• Execute binding commercial
contracts to fill the Group’s spare
gas processing capacity with
third-party volumes.
Managing our capital
allocation
We are strengthening a cost-
conscious culture, seeking to
improve the Group’s capital
structure and focusing on cash
flow generation through
disciplined capital and cost
management.
• Assessment of the
opportunities and their ranking
for most efficient allocation of
capital to maximise stakeholder
returns.
• Balance sales mix and maximise
netbacks
• Control Opex and G&A.
• Challenges in attracting
additional capital for execution
of prospective opportunities.
• Sustained higher commodity
prices can lead to cost inflation
in Kazakhstan.
• Further spend on
Chinarevskoye reservoir
development will likely be
needed to satisfy regulatory
and licence-to-operate
requirements.
• Manage liquidity and cash
reserves to support continuity of
operations while preserving
longer-term growth optionality.
Focusing on HSE and
Compliance
Maintaining high standards in
health, safety and
environmental management.
Strengthening corporate
governance through the
refreshed Board and enhanced
internal control framework.
• Safe operations and care for
the environment (TRIR, LTIR,
RTI).
• Fulfilling social responsibility.
• Transparency with all
stakeholders through enhanced
HSE and Compliance Reporting
• Not to exceed greenhouse gas
emissions target of 290,209
tons of CO 2 .
• Legal framework for
environmental protection and
operational safety still being
developed in Kazakhstan.
• See Risk Management section
on pages 20-21
• Execution of the HSE and
compliance improvement plan.
• Achieve objectives set in the HSE
plan (HSE Leadership, Incident
management, Personal Safety,
Contractor management, Process
safety/Asset integrity).
STRATEGIC REPORT
STRATEGY
The Group continues to focus on maximising the value of its gas processing infrastructure through
disciplined utilisation and capital allocation .
Our purpose
To create value for shareholders and other
stakeholders by operating as an integrated
business with a focus on safety, discipline
and efficient use of the Group’s asset base.
Our vision
To contribute profitably and responsibly to
Kazakhstan’s commercial gas supply while
supporting a cleaner energy mix over time.
Our values
We are trustworthy and reliable, take our
corporate, social and ecological responsibilities
seriously, and are dedicated to the health,
safety and wellbeing of our employees.
Strategic pillars 2026 priorities Risks 2026-2027 Forecasts & Objectives
Developing upstream potential
We continue to assess the
Group’s long-term growth
options while broadening
opportunities through selective
investment and portfolio
development.
• Revisit Chinarevskoye field
drilling programme and
requirements.
• Maximise uptime of existing
wells and production facilities.
• Potential drilling of one well
and progression of the Stepnoy
Leopard development
programme, subject to ongoing
review.
• Significant subsurface
uncertainties and risks could
negatively impact drilling and
appraisal campaigns.
• Impact of equipment failure.
• At low production levels,
unexpected sub-surface events
could severely impact the
Group’s operating cash flow.
• Re-evaluation of the drilling
programme at Chinarevskoye
field.
• Progress the Stepnoy Leopard
fields development plan in line
with current review outcomes,
regulatory requirements and
capital allocation priorities.
• Reduce decline rates in existing
Chinarevskoye production wells.
Pursuing new gas processing
opportunities
We continue to assess ways to
commercialise spare capacity in
the Group’s gas processing
facilities and to increase third-
party throughput over time.
• Continue processing Ural O&G
volumes and support
implementation of fiscal
metering arrangements.
• Advance ongoing discussions
with third parties interested in
supplying raw gas to take
advantage of the Group’s gas
processing capacity.
• Ural O&G project execution
delays with installation of fiscal
metering.
• Ongoing negotiations with
various counter-parties are
complex and commercially
sensitive, and there can be no
certainty that agreement will
be reached.
• Installation of fiscal metering by
Ural O&G.
• Execute binding commercial
contracts to fill the Group’s spare
gas processing capacity with
third-party volumes.
Managing our capital
allocation
We are strengthening a cost-
conscious culture, seeking to
improve the Group’s capital
structure and focusing on cash
flow generation through
disciplined capital and cost
management.
• Assessment of the
opportunities and their ranking
for most efficient allocation of
capital to maximise stakeholder
returns.
• Balance sales mix and maximise
netbacks
• Control Opex and G&A.
• Challenges in attracting
additional capital for execution
of prospective opportunities.
• Sustained higher commodity
prices can lead to cost inflation
in Kazakhstan.
• Further spend on
Chinarevskoye reservoir
development will likely be
needed to satisfy regulatory
and licence-to-operate
requirements.
• Manage liquidity and cash
reserves to support continuity of
operations while preserving
longer-term growth optionality.
Focusing on HSE and
Compliance
Maintaining high standards in
health, safety and
environmental management.
Strengthening corporate
governance through the
refreshed Board and enhanced
internal control framework.
• Safe operations and care for
the environment (TRIR, LTIR,
RTI).
• Fulfilling social responsibility.
• Transparency with all
stakeholders through enhanced
HSE and Compliance Reporting
• Not to exceed greenhouse gas
emissions target of 290,209
tons of CO 2 .
• Legal framework for
environmental protection and
operational safety still being
developed in Kazakhstan.
• See Risk Management section
on pages 20-21
• Execution of the HSE and
compliance improvement plan.
• Achieve objectives set in the HSE
plan (HSE Leadership, Incident
management, Personal Safety,
Contractor management, Process
safety/Asset integrity).
9
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
STRATEGY IN ACTION
Safeguarding our assets and operations
During 2025, the Group continued to prioritise safe and efficient operations while progressing a selective drilling and production programme. Activities at
the Chinarevskoye field were focused on managing decline, supporting production and maintaining operational reliability while leveraging existing
infrastructure and controlling costs.
Well 116_1 Well 116_1 was successfully drilled in October 2025 within the planned timetable and at a lower-than-budgeted
cost and commenced production in November, delivering initial rates in line with expectations.
Low-pressure
system
LPS3 was completed in Q4 2025, increasing Low Pressure System capacity to 58,400 standard cubic metres per
hour.
Safety metrics TRIF increased to 0.92 per million man-hours in 2025 (up 46%), while the Group maintained over two years of LTI-
free operations.
Ural Oil & Gas
Nostrum Oil & Gas continues to advance its third-party processing strategy through its long-term commercial arrangements with Ural O&G. The
partnership remains important in supporting increased utilisation of the Group’s gas processing infrastructure and diversifying revenue sources.
August 2018 Nostrum enters into binding agreements with Ural O&G for condensate tolling and purchase of raw gas.
2024 Following the tie-back of Ural O&G’s first well in December 2023 at an initial production rate of approximately 0.3
mcm per day, 2024 marked the first full year of third-party gas processing, with total volumes of approximately 0.3
bcm.
2025 • The Agreement for the processing hydrocarbons from Ural O&G was extended on new terms until May 2031.
• Throughout FY 2025, the Company continued processing raw gas and condensate volumes from Ural O&G,
contributing to increases in titled production and processed volumes.
Stepnoy Leopard fields
In 2025, Nostrum commenced a comprehensive re-evaluation of the development strategy for the Stepnoy Leopard fields. This work is not limited to
updating the prior development concept, but involves a broader reassessment of the subsurface modelling, project development strategy, economics,
infrastructure access, sales delivery points, and regulatory and licence requirements. As part of this process, the Group has engaged McDaniel & Associates
Ltd. to prepare a new independent CPR, which will inform a fresh review of the development approach.
July 2023 Acquired an 80% interest in the Stepnoy Leopard fields for US$20m.
Sep 2023 – Mar 2024 Successfully completed a two-well appraisal programme at the Stepnoy Leopard fields with a total investment of
US$8m.
March 2024 Final investment decision approved by Nostrum Board.
July 2024 Exodus CPR recognized 138 mmboe gross 2P reserves, representing 110 mmboe net to Nostrum (80% working
interest).
April 2025 Field Development Plan approved by the Ministry of Energy of the RoK.
2026 • A full review of the Stepnoy Leopard development strategy is underway, focused on subsurface, scope, economics,
infrastructure access, sales delivery points, and regulatory compliance.
• The first planned production well, Wtp-102, is currently expected to be drilled in the second half of 2026, subject to the
outcome of the ongoing review..
STRATEGY IN ACTION
Safeguarding our assets and operations
During 2025, the Group continued to prioritise safe and efficient operations while progressing a selective drilling and production programme. Activities at
the Chinarevskoye field were focused on managing decline, supporting production and maintaining operational reliability while leveraging existing
infrastructure and controlling costs.
Well 116_1 Well 116_1 was successfully drilled in October 2025 within the planned timetable and at a lower-than-budgeted
cost and commenced production in November, delivering initial rates in line with expectations.
Low-pressure
system
LPS3 was completed in Q4 2025, increasing Low Pressure System capacity to 58,400 standard cubic metres per
hour.
Safety metrics TRIF increased to 0.92 per million man-hours in 2025 (up 46%), while the Group maintained over two years of LTI-
free operations.
Ural Oil & Gas
Nostrum Oil & Gas continues to advance its third-party processing strategy through its long-term commercial arrangements with Ural O&G. The
partnership remains important in supporting increased utilisation of the Group’s gas processing infrastructure and diversifying revenue sources.
August 2018 Nostrum enters into binding agreements with Ural O&G for condensate tolling and purchase of raw gas.
2024 Following the tie-back of Ural O&G’s first well in December 2023 at an initial production rate of approximately 0.3
mcm per day, 2024 marked the first full year of third-party gas processing, with total volumes of approximately 0.3
bcm.
2025 • The Agreement for the processing hydrocarbons from Ural O&G was extended on new terms until May 2031.
• Throughout FY 2025, the Company continued processing raw gas and condensate volumes from Ural O&G,
contributing to increases in titled production and processed volumes.
Stepnoy Leopard fields
In 2025, Nostrum commenced a comprehensive re-evaluation of the development strategy for the Stepnoy Leopard fields. This work is not limited to
updating the prior development concept, but involves a broader reassessment of the subsurface modelling, project development strategy, economics,
infrastructure access, sales delivery points, and regulatory and licence requirements. As part of this process, the Group has engaged McDaniel & Associates
Ltd. to prepare a new independent CPR, which will inform a fresh review of the development approach.
July 2023 Acquired an 80% interest in the Stepnoy Leopard fields for US$20m.
Sep 2023 – Mar 2024 Successfully completed a two-well appraisal programme at the Stepnoy Leopard fields with a total investment of
US$8m.
March 2024 Final investment decision approved by Nostrum Board.
July 2024 Exodus CPR recognized 138 mmboe gross 2P reserves, representing 110 mmboe net to Nostrum (80% working
interest).
April 2025 Field Development Plan approved by the Ministry of Energy of the RoK.
2026 • A full review of the Stepnoy Leopard development strategy is underway, focused on subsurface, scope, economics,
infrastructure access, sales delivery points, and regulatory compliance.
• The first planned production well, Wtp-102, is currently expected to be drilled in the second half of 2026, subject to the
outcome of the ongoing review..
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
10
STRATEGIC REPORT
STAKEHOLDER ENGAGEMENT
Understanding our stakeholders
Regular and proactive engagement is integral to the Group’s strategy and supports decision-
making directed toward sustainable long-term value creation. We actively identify and address
stakeholder priorities, interests and concerns.
Section 172(1) statement
The Directors are fully aware of their responsibilities to promote the success of the Company in accordance with section 172 of the Companies
Act and to have regard for the interests of the Company’s employees and other stakeholders, including the impact of the Company’s activities on
the community and the environment, when making decisions at Board level. The Directors, acting in good faith, consider what is most likely to
promote the success of the Company for the benefit of its members as a whole, and in doing so balance the sometimes competing interests of
various stakeholders including investors, employees, customers, suppliers and the communities in which the Company operates.
Our people
As of 31 December 2025, the Group employed a total of 595
personnel, with the majority based in Kazakhstan, where 91% of
our workforce comprises Kazakhstan nationals.
Why we engage
• Safeguarding the physical and mental wellbeing of our employees is
fundamental to maintaining the safe and efficient operations of our
Group.
How we engage, key developments and decisions
• Strengthening engagement between management and the workforce
through enhanced collaboration, including regular town hall meetings
and cooperative discussions.
• Annual wage indexation to help alleviate effects of inflation including
indexation with effect from 1 January 2025.
Local communities
Nostrum operates alongside local communities in Kazakhstan and is
committed to fostering strong community engagement while
supporting sustainable long-term development in the regions
surrounding our operations.
Why we engage
• Through continuous engagement, we seek to understand community
priorities and implement initiatives that create lasting social and
economic value in the regions where Nostrum operates.
How we engage, key developments and decisions
• Throughout 2025, the Company continued its active engagement with
the local communities, supporting sustainable development initiatives
in rural districts directly connected to its production activities.
• Particular focus was placed on communities within the Yantvartsevo,
Solu Kol and Beles rural districts, where targeted social support
initiatives were implemented to address priority local needs.
• Providing support for educational infrastructure, including renovation
of pre-school and school facilities, procurement of classroom furniture
and equipment, and assistance to children from low-income families.
Investors
Shareholders and bondholders have provided some of the financing
required for drilling and the construction of the Group’s
infrastructure.
Why we engage
• Maximising stakeholder value, while fulfilling the Group’s financial
commitments and engaging constructively with holders of its notes
and shareholders remains a top priority for Nostrum. Active
engagement with our stakeholders, including minority shareholders, is
essential to ensuring transparency and alignment with our strategy to
monetise our infrastructure. To successfully execute these plans,
additional capital investment may be required.
How we engage, key developments and decisions
• February 2023 Nostrum completed the implementation of the
restructuring after obtaining all required licences and approvals. As a
result, US$1.125bn of existing notes have been replaced with
US$250m Senior Secured and US$345m Senior Unsecured notes due
in 2026. The remaining portion of existing notes were converted into
the Company’s equity and the existing ordinary shareholders were
diluted to 11.11%, subject to further dilution if the warrants held by
existing note holders are exercised.
• A consent solicitation seeking approval for certain amendments to the
terms of its notes launched in September received the required
support from holders of the Senior Secured Notes and majority
support from holders of the Senior Unsecured Notes at the early
consent deadline. This engagement supports preparations for the
upcoming debt maturity and the Company’s capital structure
discussions.
• Regular market disclosures through RNS announcements and press
releases, ongoing investor communications, publication of financial
reports and materials on the Company’s website.
• Nostrum directors and management meet with shareholders and
other investors regularly during the year to exchange views and share
insights.
• Financial reports and extensive other shareholder information are
available on our website.
• Our Annual General Meeting provides an opportunity for all
shareholders, including minority shareholders, to ask questions of the
Board.
• In 2025 and early 2026, engagement with noteholders and
shareholders became particularly important in light of the June 2026
debt maturity and the Group’s broader capital structure discussions.
STRATEGIC REPORT
STAKEHOLDER ENGAGEMENT
Understanding our stakeholders
Regular and proactive engagement is integral to the Group’s strategy and supports decision-
making directed toward sustainable long-term value creation. We actively identify and address
stakeholder priorities, interests and concerns.
Section 172(1) statement
The Directors are fully aware of their responsibilities to promote the success of the Company in accordance with section 172 of the Companies
Act and to have regard for the interests of the Company’s employees and other stakeholders, including the impact of the Company’s activities on
the community and the environment, when making decisions at Board level. The Directors, acting in good faith, consider what is most likely to
promote the success of the Company for the benefit of its members as a whole, and in doing so balance the sometimes competing interests of
various stakeholders including investors, employees, customers, suppliers and the communities in which the Company operates.
Our people
As of 31 December 2025, the Group employed a total of 595
personnel, with the majority based in Kazakhstan, where 91% of
our workforce comprises Kazakhstan nationals.
Why we engage
• Safeguarding the physical and mental wellbeing of our employees is
fundamental to maintaining the safe and efficient operations of our
Group.
How we engage, key developments and decisions
• Strengthening engagement between management and the workforce
through enhanced collaboration, including regular town hall meetings
and cooperative discussions.
• Annual wage indexation to help alleviate effects of inflation including
indexation with effect from 1 January 2025.
Local communities
Nostrum operates alongside local communities in Kazakhstan and is
committed to fostering strong community engagement while
supporting sustainable long-term development in the regions
surrounding our operations.
Why we engage
• Through continuous engagement, we seek to understand community
priorities and implement initiatives that create lasting social and
economic value in the regions where Nostrum operates.
How we engage, key developments and decisions
• Throughout 2025, the Company continued its active engagement with
the local communities, supporting sustainable development initiatives
in rural districts directly connected to its production activities.
• Particular focus was placed on communities within the Yantvartsevo,
Solu Kol and Beles rural districts, where targeted social support
initiatives were implemented to address priority local needs.
• Providing support for educational infrastructure, including renovation
of pre-school and school facilities, procurement of classroom furniture
and equipment, and assistance to children from low-income families.
Investors
Shareholders and bondholders have provided some of the financing
required for drilling and the construction of the Group’s
infrastructure.
Why we engage
• Maximising stakeholder value, while fulfilling the Group’s financial
commitments and engaging constructively with holders of its notes
and shareholders remains a top priority for Nostrum. Active
engagement with our stakeholders, including minority shareholders, is
essential to ensuring transparency and alignment with our strategy to
monetise our infrastructure. To successfully execute these plans,
additional capital investment may be required.
How we engage, key developments and decisions
• February 2023 Nostrum completed the implementation of the
restructuring after obtaining all required licences and approvals. As a
result, US$1.125bn of existing notes have been replaced with
US$250m Senior Secured and US$345m Senior Unsecured notes due
in 2026. The remaining portion of existing notes were converted into
the Company’s equity and the existing ordinary shareholders were
diluted to 11.11%, subject to further dilution if the warrants held by
existing note holders are exercised.
• A consent solicitation seeking approval for certain amendments to the
terms of its notes launched in September received the required
support from holders of the Senior Secured Notes and majority
support from holders of the Senior Unsecured Notes at the early
consent deadline. This engagement supports preparations for the
upcoming debt maturity and the Company’s capital structure
discussions.
• Regular market disclosures through RNS announcements and press
releases, ongoing investor communications, publication of financial
reports and materials on the Company’s website.
• Nostrum directors and management meet with shareholders and
other investors regularly during the year to exchange views and share
insights.
• Financial reports and extensive other shareholder information are
available on our website.
• Our Annual General Meeting provides an opportunity for all
shareholders, including minority shareholders, to ask questions of the
Board.
• In 2025 and early 2026, engagement with noteholders and
shareholders became particularly important in light of the June 2026
debt maturity and the Group’s broader capital structure discussions.
11
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
Suppliers and contractors
We are dedicated to fostering long-term, sustainable partnerships with
our suppliers, contractors, and customers.
Why we engage
• We expect our suppliers to uphold stringent safety, legal and ethical
standards.
• As a key contributor to the local and national economy, we remain
committed to engaging local suppliers to support our operational
requirements.
How we engage, key developments and decisions
• Where commercially beneficial, contracts were extended to maintain
strong relationships while further enhancing HSE and operational
standards.
• As part of a contract extension campaign all suppliers were
approached with request for price reduction and negotiations were
held with purpose to reduce or maintain price level wherever
achievable.
• Market benchmark and competitive offers comparison was performed
for items with risk of price increase.
• In certain cases, contract scopes were split to preserve relationships
with service providers, particularly in relation to new construction
projects.
• Cost optimisation opportunities were tested and applied by changing
from contracted service works to staff outsourcing.
Governments and regulators
Governments and regulators establish the framework within which
we conduct our business. Policy, regulatory, legislative, and personnel
changes can impact the Group’s operations.
Why we engage
• A number of the Board’s decisions require careful consideration of
governmental, regulatory and policy matters.
• We make significant contributions through taxes and social payments.
How we engage, key developments and decisions
• Formal and informal discussions are held on a regular basis with local
and national government, regulatory and tax officials and ministers
across a variety the Group. This proactive approach allows us to stay
informed about potential legislative changes and evolving regulatory
interpretations, ensuring timely and effective responses.
• The Group continues to focus on opportunities to increase utilisation
of its gas processing infrastructure, while engaging with government
authorities on matters relating to operations, subsoil use, taxation,
permitting and regional energy supply.
• The Group also engages with relevant regulatory authorities in
connection with its obligations as a listed company and, where
applicable, with sanctions and other regulatory approval processes
relevant to its financing arrangements.
Suppliers and contractors
We are dedicated to fostering long-term, sustainable partnerships with
our suppliers, contractors, and customers.
Why we engage
• We expect our suppliers to uphold stringent safety, legal and ethical
standards.
• As a key contributor to the local and national economy, we remain
committed to engaging local suppliers to support our operational
requirements.
How we engage, key developments and decisions
• Where commercially beneficial, contracts were extended to maintain
strong relationships while further enhancing HSE and operational
standards.
• As part of a contract extension campaign all suppliers were
approached with request for price reduction and negotiations were
held with purpose to reduce or maintain price level wherever
achievable.
• Market benchmark and competitive offers comparison was performed
for items with risk of price increase.
• In certain cases, contract scopes were split to preserve relationships
with service providers, particularly in relation to new construction
projects.
• Cost optimisation opportunities were tested and applied by changing
from contracted service works to staff outsourcing.
Governments and regulators
Governments and regulators establish the framework within which
we conduct our business. Policy, regulatory, legislative, and personnel
changes can impact the Group’s operations.
Why we engage
• A number of the Board’s decisions require careful consideration of
governmental, regulatory and policy matters.
• We make significant contributions through taxes and social payments.
How we engage, key developments and decisions
• Formal and informal discussions are held on a regular basis with local
and national government, regulatory and tax officials and ministers
across a variety the Group. This proactive approach allows us to stay
informed about potential legislative changes and evolving regulatory
interpretations, ensuring timely and effective responses.
• The Group continues to focus on opportunities to increase utilisation
of its gas processing infrastructure, while engaging with government
authorities on matters relating to operations, subsoil use, taxation,
permitting and regional energy supply.
• The Group also engages with relevant regulatory authorities in
connection with its obligations as a listed company and, where
applicable, with sanctions and other regulatory approval processes
relevant to its financing arrangements.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
12
STRATEGIC REPORT
KEY FINANCIAL AND NON-FINANCIAL INDICATORS
Economies of scale, cash discipline and safe operations
Our key indicators provide a balanced framework for assessing both financial resilience and
operational delivery. These metrics enable the Board to evaluate performance against strategic
priorities, capital discipline and long-term sustainability objectives.
Key Financial Indicators
In 2025, the Group continued to focus on cost discipline while
optimising its operating structure and supporting higher processing
volumes.
Cash and cash equivalents decreased in 2025, primarily due to
reduced production volumes, lower commodity prices, investing
activities, including the purchase of PPE for both the Chinarevskoye
and Stepnoy Leopard fields, Chinarevskoye drilling expenditures, as
well as one-time payments under Management Incentive Plan.
Operating costs decreased on a per boe basis, reflecting higher
processed volumes and ongoing operational efficiencies. This was
partly offset by higher materials, supplies and maintenance costs
associated with increased operations. G&A expenses declined on a
per boe basis.
Selling and transportation costs on a per boe basis decreased, mainly
driven by changes in sales and logistics arrangements and significantly
lower transportation costs during the year.
Overall, these developments reflect the Group’s continued focus on
operational efficiency, cost management and liquidity preservation.
2021 2022 2023 2024 2025
Cash at year end (US$m) 165.2 233.6 161.7 150.4 143.3
Opex 3 (US$/boe) 5.1 6.5 9.8 5.8 4.6
G&A expenses 5 (US$/boe) 1.9 2.5 3.7 1.9 1.6
Selling and transportation costs (US$/boe) 3.8 4.4 3.8 3.1 1.5
Key Non-financial Indicators
Effective operations, while performing responsibly and safely is
integral to our strategy and to the sustainability of our business. We
believe that long-term value depends on viewing business
performance in the broader context of people, safety and the
environment. We have set ourselves specific key non-financial
indicators to track our progress, as we believe this to be the best way
to monitor our achievements in relation to environmental, social and
governance matters.
In 2025, Nostrum’s key ESG targets were:
• To remain within the forecast GHG emissions target of 290,209 tonnes
of CO2e;
• HSE KPIs: no fatalities. LTI < 1.15; RTI < 1.0; TRIF < 2.0.
2021 2022 2023 2024 2025
Sales volumes (boepd) 15,330 12,524 8,874 13,038 15,146
Road traffic incidents (frequency 4 ) 1.46 0 0 0.5 0.21
Lost time injury incidents (frequency 5 ) 0.81 0 0.37 0 0
Total recordable incidents (rate 3 ) 2.42 1.56 0.75 0.63 0.92
Total greenhouse gas emissions (tCO 2 e) 187 170 180 256 226
3 Opex and G&A costs per boe of processed volumes.
Opex excluding DD&A, inventory adjustment and cost of raw gas purchased. G&A costs excluding DD&A
4 Per million km driven
5 Per million hours
STRATEGIC REPORT
KEY FINANCIAL AND NON-FINANCIAL INDICATORS
Economies of scale, cash discipline and safe operations
Our key indicators provide a balanced framework for assessing both financial resilience and
operational delivery. These metrics enable the Board to evaluate performance against strategic
priorities, capital discipline and long-term sustainability objectives.
Key Financial Indicators
In 2025, the Group continued to focus on cost discipline while
optimising its operating structure and supporting higher processing
volumes.
Cash and cash equivalents decreased in 2025, primarily due to
reduced production volumes, lower commodity prices, investing
activities, including the purchase of PPE for both the Chinarevskoye
and Stepnoy Leopard fields, Chinarevskoye drilling expenditures, as
well as one-time payments under Management Incentive Plan.
Operating costs decreased on a per boe basis, reflecting higher
processed volumes and ongoing operational efficiencies. This was
partly offset by higher materials, supplies and maintenance costs
associated with increased operations. G&A expenses declined on a
per boe basis.
Selling and transportation costs on a per boe basis decreased, mainly
driven by changes in sales and logistics arrangements and significantly
lower transportation costs during the year.
Overall, these developments reflect the Group’s continued focus on
operational efficiency, cost management and liquidity preservation.
2021 2022 2023 2024 2025
Cash at year end (US$m) 165.2 233.6 161.7 150.4 143.3
Opex 3 (US$/boe) 5.1 6.5 9.8 5.8 4.6
G&A expenses 5 (US$/boe) 1.9 2.5 3.7 1.9 1.6
Selling and transportation costs (US$/boe) 3.8 4.4 3.8 3.1 1.5
Key Non-financial Indicators
Effective operations, while performing responsibly and safely is
integral to our strategy and to the sustainability of our business. We
believe that long-term value depends on viewing business
performance in the broader context of people, safety and the
environment. We have set ourselves specific key non-financial
indicators to track our progress, as we believe this to be the best way
to monitor our achievements in relation to environmental, social and
governance matters.
In 2025, Nostrum’s key ESG targets were:
• To remain within the forecast GHG emissions target of 290,209 tonnes
of CO2e;
• HSE KPIs: no fatalities. LTI < 1.15; RTI < 1.0; TRIF < 2.0.
2021 2022 2023 2024 2025
Sales volumes (boepd) 15,330 12,524 8,874 13,038 15,146
Road traffic incidents (frequency 4 ) 1.46 0 0 0.5 0.21
Lost time injury incidents (frequency 5 ) 0.81 0 0.37 0 0
Total recordable incidents (rate 3 ) 2.42 1.56 0.75 0.63 0.92
Total greenhouse gas emissions (tCO 2 e) 187 170 180 256 226
3 Opex and G&A costs per boe of processed volumes.
Opex excluding DD&A, inventory adjustment and cost of raw gas purchased. G&A costs excluding DD&A
4 Per million km driven
5 Per million hours
13
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
OPERATIONAL REVIEW
Our products
Nostrum’s production portfolio comprises crude oil, stabilised condensate, LPG, and dry gas. In
addition to its own working interest production, starting from December 2023 the Group has
processed third-party hydrocarbons. Further details about our products are provided in the table
below.
Crude oil
Quality
• Density — 0.830g/cm3
• API — 38.9 degrees
• Average sulphur — 0.53%
Sales
• The PSA requires 15% to be sold domestically with remaining available
for export.
• In 2025, 31% was sold domestically and the remaining volumes were
exported, which is in line with the expectations based on practice over
the past few years.
Pricing
• Brent and Urals-based pricing for pipeline exports.
• Domestic sales at over 50% discount.
• Prices negotiated directly with the purchaser.
Transportation
• During 2025, all exported crude oil volumes were sold through the
KazTransOil (KTO) pipeline.
• Crude exports are delivered to the KTO pipeline through an extension
to our own 120 km pipeline from the field site. From here the crude is
delivered via trunk pipelines.
LPG
Quality
• Field-grade quality.
• No olefins.
Sales
• 100% exported.
• Destinations include Poland, Latvia, Uzbekistan and Tajikistan.
Pricing
• Argus quotations for specified destinations (Poland, Tajikistan,
Uzbekistan and Latvia).
Transportation
• Loaded onto LPG trucks at the field site and trucked to the third-party
rail loading terminal located in Zhelaevo.
• From here, the LPG is loaded onto railcars and sold to third parties.
LPG production (boepd) and product split (%)
2021 2022 2023 2024 2025
LPG production
(boepd)
2,065 1,650 1,287 2,537 3,162
Product split (%) 12% 13% 13% 17% 19%
Stabilised condensate
Quality
• Density — 0.764g/cm 3
• API — 53.7 degrees
• Average sulphur — < 0.13%
Sales
• 100% exported.
• In the first quarter of 2025, shipments were carried out through the
Port of Aktau; starting from May 2025, the delivery route was changed
to Uzbekistan.
Pricing
• Brent-based pricing, negotiated directly with the purchaser.
Transportation
• Sent through our 120 km pipeline from the field site to our rail loading
terminal in Uralsk.
• Thereafter, the cargo is transshipped into railcars and transported by
rail.
Crude Oil and stabilised condensate production (boepd) and product split (%)
2021 2022 2023 2024 2025
Crude Oil and
stabilised
condensate
production (boepd)
6,877 5,696 4,630 4,433 4,007
Product split (%) 40% 43% 46% 30% 24%
Dry gas
Sales
• 100% sold to NC QazaqGaz.
Pricing
• The pricing formula based on Brent crude oil has been agreed until the
end of June 2027.
Transportation
• Sent through our 17km pipeline from the field site to the connection
point with the Intergas Central Asia gas pipeline.
• Sold at the connection point.
Dry gas production (boepd) and product split (%)
2021 2022 2023 2024 2025
Dry gas production
(boepd)
8,090 5,854 4,174 7,965 9,698
Product split (%) 48% 44% 41% 53% 57%
OPERATIONAL REVIEW
Our products
Nostrum’s production portfolio comprises crude oil, stabilised condensate, LPG, and dry gas. In
addition to its own working interest production, starting from December 2023 the Group has
processed third-party hydrocarbons. Further details about our products are provided in the table
below.
Crude oil
Quality
• Density — 0.830g/cm3
• API — 38.9 degrees
• Average sulphur — 0.53%
Sales
• The PSA requires 15% to be sold domestically with remaining available
for export.
• In 2025, 31% was sold domestically and the remaining volumes were
exported, which is in line with the expectations based on practice over
the past few years.
Pricing
• Brent and Urals-based pricing for pipeline exports.
• Domestic sales at over 50% discount.
• Prices negotiated directly with the purchaser.
Transportation
• During 2025, all exported crude oil volumes were sold through the
KazTransOil (KTO) pipeline.
• Crude exports are delivered to the KTO pipeline through an extension
to our own 120 km pipeline from the field site. From here the crude is
delivered via trunk pipelines.
LPG
Quality
• Field-grade quality.
• No olefins.
Sales
• 100% exported.
• Destinations include Poland, Latvia, Uzbekistan and Tajikistan.
Pricing
• Argus quotations for specified destinations (Poland, Tajikistan,
Uzbekistan and Latvia).
Transportation
• Loaded onto LPG trucks at the field site and trucked to the third-party
rail loading terminal located in Zhelaevo.
• From here, the LPG is loaded onto railcars and sold to third parties.
LPG production (boepd) and product split (%)
2021 2022 2023 2024 2025
LPG production
(boepd)
2,065 1,650 1,287 2,537 3,162
Product split (%) 12% 13% 13% 17% 19%
Stabilised condensate
Quality
• Density — 0.764g/cm 3
• API — 53.7 degrees
• Average sulphur — < 0.13%
Sales
• 100% exported.
• In the first quarter of 2025, shipments were carried out through the
Port of Aktau; starting from May 2025, the delivery route was changed
to Uzbekistan.
Pricing
• Brent-based pricing, negotiated directly with the purchaser.
Transportation
• Sent through our 120 km pipeline from the field site to our rail loading
terminal in Uralsk.
• Thereafter, the cargo is transshipped into railcars and transported by
rail.
Crude Oil and stabilised condensate production (boepd) and product split (%)
2021 2022 2023 2024 2025
Crude Oil and
stabilised
condensate
production (boepd)
6,877 5,696 4,630 4,433 4,007
Product split (%) 40% 43% 46% 30% 24%
Dry gas
Sales
• 100% sold to NC QazaqGaz.
Pricing
• The pricing formula based on Brent crude oil has been agreed until the
end of June 2027.
Transportation
• Sent through our 17km pipeline from the field site to the connection
point with the Intergas Central Asia gas pipeline.
• Sold at the connection point.
Dry gas production (boepd) and product split (%)
2021 2022 2023 2024 2025
Dry gas production
(boepd)
8,090 5,854 4,174 7,965 9,698
Product split (%) 48% 44% 41% 53% 57%
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
14
STRATEGIC REPORT
2025 developments
In 2025, Nostrum’s total processed volumes increased year-on-year, supported by continued
processing of raw gas from Ural O&G and incremental system capacity improvements, including
further optimisation of the low-pressure system.
Production in 2025
In 2025 Nostrum’s average daily titled production volumes (working
interest production plus volumes relating to purchased raw gas from
Ural O&G under the processing agreement) increased by 13% to
16,867 boepd (14,935 boepd in 2024). Total processed volumes
increased by 23% (including third party condensate tolling volumes) in
2025, compared to 2024.
These increases in production and processed volumes were mainly
due to:
• Continued processing of raw gas received from Ural O&G, which
commenced in December 2023;
• Capacity improvements to the low pressure system (LPS3) which
increased gas lift capacity to 1.2 mln m 3 /day.
Production at the Chinarevskoye Field averaged 6,756 boepd in 2025,
representing a 20.9% decline compared to 2024. The reduction was in
line with expectations and primarily reflects natural reservoir
depletion together with operational challenges in well stimulations
and integrity issues in well Ch-115.
Chinarevskoye field average daily production in 2026 is currently
expected to be in the range of 5,000-6,000 boepd.
Drilling and workover operations at the Chinarevskoye Field
The Group’s drilling programme in 2025 was limited to one well. On
13 October 2025, drilling of well Ch-116_1 was successfully completed
within the planned timetable and at a lower-than-budgeted cost and
the well was brought on production on 21 November 2025 following
completion operations. Initial production rates exceeded the Group’s
modelled expectations before stabilising at expected levels. Following
a reassessment of the second proposed well, Ch-725, the Company
decided not to proceed with drilling because its limited productive
potential, high capital cost and the relatively short remaining licence
term rendered the well uneconomic.
The subsurface team continues to evaluate drilling and intervention
options that could contribute to field production, although the
remaining licence term continues to constrain the economics of
additional activity.
The rig-based workover campaign in 2025 focused primarily on
addressing ESP failures and selective recompletions to shallower
reservoirs. The well Ch-220 was recompleted to the Tournaisian
reservoir, delivering initial production rates in line with expectations.
The Grup also decided to test the uppermost hydrocarbon bearing
Filippovski reservoir by recompleting two additional wells Ch-217 and
Ch-208. Both wells proved unsuccessful due to higher than
anticipated water saturation and low permeability. Further subsurface
analysis to update the geological model and identify additional
workover and drilling candidates remains ongoing. However, the
remaining licence term continues to constrain the economics of
appraisal and step-out drilling.
In parallel, the Company continued rigless well interventions,
including re-completions, additional perforations and acid
stimulations, applied selectively across several wells to support
production optimisation.
As in previous years, the focus remains on identifying and de-risking
technically and economically viable drilling and intervention
opportunities in support of 2P reserve recovery. Seismic analysis and
related subsurface work will therefore continue. In addition to the
geological risks, the generally expected low production rates from
horizons of limited reservoir quality make potential drilling projects
economically challenging and jeopardise the development of the
remaining proven and probable reserves.
In 2025, the uptime of the processing facilities was 97.76% for the oil
processing units and 98.16% for the gas processing units. Planned
downtime was in line with expectations: maintenance of the oil
treatment plant caused an eight-day shut down and 23 Kboe of
deferred production, while the maintenance of the gas processing
plant caused a four-day shut down and 17 Kboe of deferred
production. Unplanned downtime accounted for 0.05% at the oil
treatment plant and 0.47% at the gas processing facility, occurring on
several occasions, primarily due to power outages throughout the
year, resulting in 17 Kboe of deferred production. Mitigation
measures to address power outages were implemented, resulting in
fewer interruptions in the second half of the year. The spring and
autumn compressor maintenance campaign caused only a 6.2 Kboe of
deferred production, with no plant shut downs.
As of 31 December 2025, the Company had 50 production (29 oil and
21 gas condensate) wells in operation in the Chinarevskoye field.
Stepnoy Leopard fields development
In 2025, the Field Development Plan (FDP) for the Stepnoy Leopard
fields was approved by the Ministry of Energy of the Republic of
Kazakhstan. Later in the year, the Group initiated a broader
reassessment of the development strategy for the Stepnoy Leopard
fields, reflecting a review of subsurface assumptions, project scope,
economics, infrastructure access, sales delivery points, regulatory
requirements and capital allocation priorities.
As part of this process, the Group no longer treats the 2024 CPR as the
definitive basis for development planning and has engaged McDaniel
& Associates Ltd. to prepare a new independent CPR. In parallel, the
Group is continuing in-house subsurface work to support this
reassessment and to inform a fresh review of the development
approach.
No new field activities were performed at the field site during the
year.
Additional third-party volumes
A key element of the Group’s strategy is to maximise the value of its
gas processing infrastructure by utilising spare capacity through the
processing of third-party hydrocarbons. In 2025, the Ural O&G
processing arrangement was extended until May 2031.
Nostrum continues to explore opportunities to enter into additional
agreements that could further utilise the remaining processing
capacity at its GTF.
New Construction Code in the RoK
A new Construction Code in the RoK is expected to come into force in
mid-2026. The Code is anticipated to introduce changes to the design
and construction process for surface facilities, which are expected to
reduce project flexibility and extend implementation timelines for
future developments.
STRATEGIC REPORT
2025 developments
In 2025, Nostrum’s total processed volumes increased year-on-year, supported by continued
processing of raw gas from Ural O&G and incremental system capacity improvements, including
further optimisation of the low-pressure system.
Production in 2025
In 2025 Nostrum’s average daily titled production volumes (working
interest production plus volumes relating to purchased raw gas from
Ural O&G under the processing agreement) increased by 13% to
16,867 boepd (14,935 boepd in 2024). Total processed volumes
increased by 23% (including third party condensate tolling volumes) in
2025, compared to 2024.
These increases in production and processed volumes were mainly
due to:
• Continued processing of raw gas received from Ural O&G, which
commenced in December 2023;
• Capacity improvements to the low pressure system (LPS3) which
increased gas lift capacity to 1.2 mln m 3 /day.
Production at the Chinarevskoye Field averaged 6,756 boepd in 2025,
representing a 20.9% decline compared to 2024. The reduction was in
line with expectations and primarily reflects natural reservoir
depletion together with operational challenges in well stimulations
and integrity issues in well Ch-115.
Chinarevskoye field average daily production in 2026 is currently
expected to be in the range of 5,000-6,000 boepd.
Drilling and workover operations at the Chinarevskoye Field
The Group’s drilling programme in 2025 was limited to one well. On
13 October 2025, drilling of well Ch-116_1 was successfully completed
within the planned timetable and at a lower-than-budgeted cost and
the well was brought on production on 21 November 2025 following
completion operations. Initial production rates exceeded the Group’s
modelled expectations before stabilising at expected levels. Following
a reassessment of the second proposed well, Ch-725, the Company
decided not to proceed with drilling because its limited productive
potential, high capital cost and the relatively short remaining licence
term rendered the well uneconomic.
The subsurface team continues to evaluate drilling and intervention
options that could contribute to field production, although the
remaining licence term continues to constrain the economics of
additional activity.
The rig-based workover campaign in 2025 focused primarily on
addressing ESP failures and selective recompletions to shallower
reservoirs. The well Ch-220 was recompleted to the Tournaisian
reservoir, delivering initial production rates in line with expectations.
The Grup also decided to test the uppermost hydrocarbon bearing
Filippovski reservoir by recompleting two additional wells Ch-217 and
Ch-208. Both wells proved unsuccessful due to higher than
anticipated water saturation and low permeability. Further subsurface
analysis to update the geological model and identify additional
workover and drilling candidates remains ongoing. However, the
remaining licence term continues to constrain the economics of
appraisal and step-out drilling.
In parallel, the Company continued rigless well interventions,
including re-completions, additional perforations and acid
stimulations, applied selectively across several wells to support
production optimisation.
As in previous years, the focus remains on identifying and de-risking
technically and economically viable drilling and intervention
opportunities in support of 2P reserve recovery. Seismic analysis and
related subsurface work will therefore continue. In addition to the
geological risks, the generally expected low production rates from
horizons of limited reservoir quality make potential drilling projects
economically challenging and jeopardise the development of the
remaining proven and probable reserves.
In 2025, the uptime of the processing facilities was 97.76% for the oil
processing units and 98.16% for the gas processing units. Planned
downtime was in line with expectations: maintenance of the oil
treatment plant caused an eight-day shut down and 23 Kboe of
deferred production, while the maintenance of the gas processing
plant caused a four-day shut down and 17 Kboe of deferred
production. Unplanned downtime accounted for 0.05% at the oil
treatment plant and 0.47% at the gas processing facility, occurring on
several occasions, primarily due to power outages throughout the
year, resulting in 17 Kboe of deferred production. Mitigation
measures to address power outages were implemented, resulting in
fewer interruptions in the second half of the year. The spring and
autumn compressor maintenance campaign caused only a 6.2 Kboe of
deferred production, with no plant shut downs.
As of 31 December 2025, the Company had 50 production (29 oil and
21 gas condensate) wells in operation in the Chinarevskoye field.
Stepnoy Leopard fields development
In 2025, the Field Development Plan (FDP) for the Stepnoy Leopard
fields was approved by the Ministry of Energy of the Republic of
Kazakhstan. Later in the year, the Group initiated a broader
reassessment of the development strategy for the Stepnoy Leopard
fields, reflecting a review of subsurface assumptions, project scope,
economics, infrastructure access, sales delivery points, regulatory
requirements and capital allocation priorities.
As part of this process, the Group no longer treats the 2024 CPR as the
definitive basis for development planning and has engaged McDaniel
& Associates Ltd. to prepare a new independent CPR. In parallel, the
Group is continuing in-house subsurface work to support this
reassessment and to inform a fresh review of the development
approach.
No new field activities were performed at the field site during the
year.
Additional third-party volumes
A key element of the Group’s strategy is to maximise the value of its
gas processing infrastructure by utilising spare capacity through the
processing of third-party hydrocarbons. In 2025, the Ural O&G
processing arrangement was extended until May 2031.
Nostrum continues to explore opportunities to enter into additional
agreements that could further utilise the remaining processing
capacity at its GTF.
New Construction Code in the RoK
A new Construction Code in the RoK is expected to come into force in
mid-2026. The Code is anticipated to introduce changes to the design
and construction process for surface facilities, which are expected to
reduce project flexibility and extend implementation timelines for
future developments.
OPERATIONAL REVIEW
15 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Chinarevskoye reserves
The Chinarevskoye field (Chinarevskoye) is the Group’s only producing
field, governed by a PSA since 1997, with the licence valid until 2031.
Since 2004, 106 wells and side-tracks have been drilled under the PSA.
The field features 17 reservoirs and 53 compartments spread over
three areas, with commercial hydrocarbons identified in formations
such as the Lower Permian, Bashkirian, Bobrikovski, Tournaisian,
Frasnian, Mullinski, Ardatovski, and Biyski-Afoninski reservoirs. The
licence is 100% owned by Zhaikmunai, the Group’s principal
Kazakhstan operating company.
As of 31 December 2025, total 2P (Proven plus Probable) reserves are
11.8 mmboe, reflecting a net reduction of 6.2 mmboe taking into
account 2.6 mmboe of production in 2025 due to increased water
ingress and continuing reservoirs depletion. The 1P (Proven) reserves
amount to 9.2 mmboe, a 3.7 mmboe decline year-on-year, primarily
due to 2025 production, significantly reduced Ardatovski NE reserves
and the reclassification of smaller reserves beyond the licence expiry.
The Proven and Probable reserves volume requires 7 CAPEX
interventions, with an additional 7 OPEX well interventions for
production maintenance.
Management’s estimates of reserves of 31 December 2025 and a
comparison with the reserves of 31 December 2024 are summarized
in Table 1. Please refer to page 116 for more details on estimation
uncertainties.
The current Probable Undeveloped case assumes nine rig-assisted
interventions including two workover recompletions, three workover
wells repairs for water flooding system improvement in Tournaisian
NE reservoir, side-tracking of three existing wells, and a new vertical
well in the Bashkirian reservoir.
In 2026, Nostrum expects to continue a selective workover and well
intervention programme, targeting a limited number of reserve
development wells together with production maintenance activities.
This programme, together with the 50 existing producers, cover the
estimated 2P reserves as at 31 December 2025. It should also be
noted that there has been some decrease in volumes in undeveloped
reservoirs associated with shifting of the drilling campaign and
reduced scope (cancellation of Ardatovski NE proposals).
Possible reserves of 5.2 mmboe as at 31 December 2025 (2024: 5.1
mmboe) are attributed to lower declines than the Proven and
Probable cases in existing producers and additional well drilling in
Mullisnki South that makes nine well interventions in total (2
workovers, 3 sidetracks, 4 new wells).
Table 2 shows the breakdown of each reserves category by product.
Reserves by reservoir
The breakdown by reservoir is given in Table 3.
Biyski-Afoninski North-East
2P reserves are estimated at 3.67 mmboe, down 1.24 mmboe
compared to 2024-year end (4.91mmboe) which includes 0.87
mmboe of production in 2025 and a 0.37 mmboe negative revision
due to further progression of water encroachment and reservoir
pressure depletion.
Probable and Possible Developed volumes are attributed to existing
producing wells, with lower declines interpreted respectively. Infill
well Ch-20 is planned to be temporarily transferred to Fillippovski for
the period 2028-2030.
Tournaisian North-East, West and South
The Tournaisian North-East has a total 2P of 5.1 mmboe at 2025-year
end, representing a 1.66 mmboe decline year-on year, including 0.95
mmboe production and a 0.71 mmboe negative revision to reflect
recent well performance.
Proven Undeveloped volumes are associated with the planned
sidetrack of well (Ch-725) and improved water flooding system by the
planned workover in well Ch-63 (completion repair). Whilst Probable
Undeveloped Reserves are associated with a sidetrack of well Ch-
225_2, and continuing development of the Waterflood with one WO
conversion and a sidetrack injection well (Ch-52_3). Production
maintenance workovers are planned in the reservoir in the years up
to and including 2027.
Tournaisian West 2P is 0.4 mmboe despite 0.15 mmboe production.
New P3 drilling target (+0.29 mmboe) was identified NE of Ch-204 and
this attic oil meant to be produced from a sidetrack well Ch-204_1
starting February 2028.
In the Tournaisian South, there are limited PDP volumes associated
with the three remaining producers and Possible reserves associated
with one new well planned for 2029.
Ardatovski North-East and South
Proven Producing volumes are associated with two current producers,
as Ch-115 was suspended due to integrity issues. No further reserves
development is planned for the Ardatovski South reservoir, beyond
the current producer.
Frasnian North
2P reserves are estimated at 0.0.27 mmboe at year end 2025, despite
0.09 mmboe of production in 2025. The development plan now
foresees only potential drilling of Ch-44 well in the same
accumulation.
Mullinski North-East, North and South
Proven Developed Producing reserves now associated with five wells,
four in the North- East and one in the North respectively. Additional
5th well is the successfully drilled well No.116-1, which is producing
from Mullinski NE since end of 2025.
One Possible Undeveloped category well location have been
identified in the North-East block and is a side-track of an existing well,
while one new Possible well is planned for drilling in the Mullinski
South, together with one sidetrack from the existing well. These three
wells are planned for 2028.
Bashkirian North-East & West
PDP reserves remain for two wells produced via Electric Submersible
Pumps (ESPs) and one intermittent operation well.
Filippovski
After two unscuccessfull recompletions in 2025 only three workover
recompletion candidates remained (one Probable and two Possible)
for the Filippovski reservoir.
These are planned, subject to further technical and economic
evaluation.
15 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Chinarevskoye reserves
The Chinarevskoye field (Chinarevskoye) is the Group’s only producing
field, governed by a PSA since 1997, with the licence valid until 2031.
Since 2004, 106 wells and side-tracks have been drilled under the PSA.
The field features 17 reservoirs and 53 compartments spread over
three areas, with commercial hydrocarbons identified in formations
such as the Lower Permian, Bashkirian, Bobrikovski, Tournaisian,
Frasnian, Mullinski, Ardatovski, and Biyski-Afoninski reservoirs. The
licence is 100% owned by Zhaikmunai, the Group’s principal
Kazakhstan operating company.
As of 31 December 2025, total 2P (Proven plus Probable) reserves are
11.8 mmboe, reflecting a net reduction of 6.2 mmboe taking into
account 2.6 mmboe of production in 2025 due to increased water
ingress and continuing reservoirs depletion. The 1P (Proven) reserves
amount to 9.2 mmboe, a 3.7 mmboe decline year-on-year, primarily
due to 2025 production, significantly reduced Ardatovski NE reserves
and the reclassification of smaller reserves beyond the licence expiry.
The Proven and Probable reserves volume requires 7 CAPEX
interventions, with an additional 7 OPEX well interventions for
production maintenance.
Management’s estimates of reserves of 31 December 2025 and a
comparison with the reserves of 31 December 2024 are summarized
in Table 1. Please refer to page 116 for more details on estimation
uncertainties.
The current Probable Undeveloped case assumes nine rig-assisted
interventions including two workover recompletions, three workover
wells repairs for water flooding system improvement in Tournaisian
NE reservoir, side-tracking of three existing wells, and a new vertical
well in the Bashkirian reservoir.
In 2026, Nostrum expects to continue a selective workover and well
intervention programme, targeting a limited number of reserve
development wells together with production maintenance activities.
This programme, together with the 50 existing producers, cover the
estimated 2P reserves as at 31 December 2025. It should also be
noted that there has been some decrease in volumes in undeveloped
reservoirs associated with shifting of the drilling campaign and
reduced scope (cancellation of Ardatovski NE proposals).
Possible reserves of 5.2 mmboe as at 31 December 2025 (2024: 5.1
mmboe) are attributed to lower declines than the Proven and
Probable cases in existing producers and additional well drilling in
Mullisnki South that makes nine well interventions in total (2
workovers, 3 sidetracks, 4 new wells).
Table 2 shows the breakdown of each reserves category by product.
Reserves by reservoir
The breakdown by reservoir is given in Table 3.
Biyski-Afoninski North-East
2P reserves are estimated at 3.67 mmboe, down 1.24 mmboe
compared to 2024-year end (4.91mmboe) which includes 0.87
mmboe of production in 2025 and a 0.37 mmboe negative revision
due to further progression of water encroachment and reservoir
pressure depletion.
Probable and Possible Developed volumes are attributed to existing
producing wells, with lower declines interpreted respectively. Infill
well Ch-20 is planned to be temporarily transferred to Fillippovski for
the period 2028-2030.
Tournaisian North-East, West and South
The Tournaisian North-East has a total 2P of 5.1 mmboe at 2025-year
end, representing a 1.66 mmboe decline year-on year, including 0.95
mmboe production and a 0.71 mmboe negative revision to reflect
recent well performance.
Proven Undeveloped volumes are associated with the planned
sidetrack of well (Ch-725) and improved water flooding system by the
planned workover in well Ch-63 (completion repair). Whilst Probable
Undeveloped Reserves are associated with a sidetrack of well Ch-
225_2, and continuing development of the Waterflood with one WO
conversion and a sidetrack injection well (Ch-52_3). Production
maintenance workovers are planned in the reservoir in the years up
to and including 2027.
Tournaisian West 2P is 0.4 mmboe despite 0.15 mmboe production.
New P3 drilling target (+0.29 mmboe) was identified NE of Ch-204 and
this attic oil meant to be produced from a sidetrack well Ch-204_1
starting February 2028.
In the Tournaisian South, there are limited PDP volumes associated
with the three remaining producers and Possible reserves associated
with one new well planned for 2029.
Ardatovski North-East and South
Proven Producing volumes are associated with two current producers,
as Ch-115 was suspended due to integrity issues. No further reserves
development is planned for the Ardatovski South reservoir, beyond
the current producer.
Frasnian North
2P reserves are estimated at 0.0.27 mmboe at year end 2025, despite
0.09 mmboe of production in 2025. The development plan now
foresees only potential drilling of Ch-44 well in the same
accumulation.
Mullinski North-East, North and South
Proven Developed Producing reserves now associated with five wells,
four in the North- East and one in the North respectively. Additional
5th well is the successfully drilled well No.116-1, which is producing
from Mullinski NE since end of 2025.
One Possible Undeveloped category well location have been
identified in the North-East block and is a side-track of an existing well,
while one new Possible well is planned for drilling in the Mullinski
South, together with one sidetrack from the existing well. These three
wells are planned for 2028.
Bashkirian North-East & West
PDP reserves remain for two wells produced via Electric Submersible
Pumps (ESPs) and one intermittent operation well.
Filippovski
After two unscuccessfull recompletions in 2025 only three workover
recompletion candidates remained (one Probable and two Possible)
for the Filippovski reservoir.
These are planned, subject to further technical and economic
evaluation.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
16
STRATEGIC REPORT
Table 1 – Nostrum Reserves, mmboe
2025 2024 Change
Total PDP 8.9 12 -3.1
Total PUD/PDNP 0.3 0.8 -0.5
Total 1P 9.2 12.9 -3.7
Total Probable 2.6 5.1 -2.5
Total 2P 11.8 18 -6.2
Possible 5.1 5.1 0
Total 3P 16.9 23.1 -6.2
Note: Barrel of oil equivalent (boe) totals are management estimates using a conversion factor of 5.327 mcf/boe.
Table 2 – Nostrum Reserves, by product and by reserves category
Proven Producing Non-Producing &
Undeveloped Total Proven Probable
Total Proven plus
Probable Possible
Total Proven,
Probable and
Fluid Unit (PDP) (PDNP & PUD) (1P) (P2) (2P) (P3) Possible (3P)
Oil/condensate barrels 4,961,904 251,253 5,213,157 1,682,553 6,895,710 2,926,203 9,821,913
Plant products (LPG) barrels 938,145 15,954 954,099 248,868 1,202,966 510,201 1,713,167
Gas (after shrink) 6 mmcf 15,890 171.3875046 16,061 3,536 19,597 9,043 28,640
Gas (after shrink) boe 2,983,183 32,176 3,015,359 663,838 3,679,198 1,697,657 5,376,855
Total boe 8,883,232 299,383 9,182,615 2,595,259 11,777,874 5,134,061 16,911,935
Table 3 7 – Comparison of reserves by reservoir 2025 versus 2024
31 December 2025 31 December 2024 Change
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 3.3 0.4 0.6 4.2 4.3 0.6 0.8 5.7 -1.0 -0.2 -0.2 -1.5
Tournaisian NE 3.7 1.4 0.6 5.7 4.9 1.9 0.6 7.4 -1.2 -0.5 0.0 -1.7
Frasnian N 0.2 0.1 0.8 1.1 0.3 0.1 0.8 1.2 -0.1 0.0 0.0 -0.1
Ardatovski NE 0.0 0.0 0.0 0.1 0.8 1.6 0.1 2.5 -0.8 -1.6 -0.1 -2.4
Filippovski 0.3 0.2 0.4 0.8 0.3 0.4 0.7 1.4 0.0 -0.2 -0.3 -0.6
Tournaisian South 0.2 0.1 0.5 0.9 0.3 0.1 0.7 1.1 -0.1 0.0 -0.2 -0.2
Mullinski NE 0.6 0.1 0.3 1.1 0.7 0.1 0.3 1.2 -0.1 0.0 0.0 -0.1
Bashkirian NE & W 0.4 0.2 0.0 0.6 0.5 0.2 0 0.8 -0.1 0.0 0.0 -0.2
Tournaisian West 0.3 0.1 0.3 0.7 0.5 0.1 0.3 0.9 -0.2 0.0 0.0 -0.2
Mullinski South 0.0 0.0 1.1 1.1 0 0 0.6 0.6 0.0 0.0 0.5 0.5
Bobrikovski South 0.0 0.1 0.0 0.1 0.1 0.1 0 0.2 -0.1 0.0 0.0 -0.1
Ardatovski S 0.1 0.0 0.0 0.1 0.1 0 0 0.2 0.0 0.0 0.0 -0.1
Mullinski North 0.0 0.0 0.5 0.5 0 0 0 0 0.0 0.0 0.5 0.5
Total 9.2 2.6 5.1 16.9 12.8 5.2 4.9 23.2 -3.6 -2.6 0.2 -6.3
6 Not included in the total
7 Some differences due to rounding
STRATEGIC REPORT
Table 1 – Nostrum Reserves, mmboe
2025 2024 Change
Total PDP 8.9 12 -3.1
Total PUD/PDNP 0.3 0.8 -0.5
Total 1P 9.2 12.9 -3.7
Total Probable 2.6 5.1 -2.5
Total 2P 11.8 18 -6.2
Possible 5.1 5.1 0
Total 3P 16.9 23.1 -6.2
Note: Barrel of oil equivalent (boe) totals are management estimates using a conversion factor of 5.327 mcf/boe.
Table 2 – Nostrum Reserves, by product and by reserves category
Proven Producing Non-Producing &
Undeveloped Total Proven Probable
Total Proven plus
Probable Possible
Total Proven,
Probable and
Fluid Unit (PDP) (PDNP & PUD) (1P) (P2) (2P) (P3) Possible (3P)
Oil/condensate barrels 4,961,904 251,253 5,213,157 1,682,553 6,895,710 2,926,203 9,821,913
Plant products (LPG) barrels 938,145 15,954 954,099 248,868 1,202,966 510,201 1,713,167
Gas (after shrink) 6 mmcf 15,890 171.3875046 16,061 3,536 19,597 9,043 28,640
Gas (after shrink) boe 2,983,183 32,176 3,015,359 663,838 3,679,198 1,697,657 5,376,855
Total boe 8,883,232 299,383 9,182,615 2,595,259 11,777,874 5,134,061 16,911,935
Table 3 7 – Comparison of reserves by reservoir 2025 versus 2024
31 December 2025 31 December 2024 Change
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 3.3 0.4 0.6 4.2 4.3 0.6 0.8 5.7 -1.0 -0.2 -0.2 -1.5
Tournaisian NE 3.7 1.4 0.6 5.7 4.9 1.9 0.6 7.4 -1.2 -0.5 0.0 -1.7
Frasnian N 0.2 0.1 0.8 1.1 0.3 0.1 0.8 1.2 -0.1 0.0 0.0 -0.1
Ardatovski NE 0.0 0.0 0.0 0.1 0.8 1.6 0.1 2.5 -0.8 -1.6 -0.1 -2.4
Filippovski 0.3 0.2 0.4 0.8 0.3 0.4 0.7 1.4 0.0 -0.2 -0.3 -0.6
Tournaisian South 0.2 0.1 0.5 0.9 0.3 0.1 0.7 1.1 -0.1 0.0 -0.2 -0.2
Mullinski NE 0.6 0.1 0.3 1.1 0.7 0.1 0.3 1.2 -0.1 0.0 0.0 -0.1
Bashkirian NE & W 0.4 0.2 0.0 0.6 0.5 0.2 0 0.8 -0.1 0.0 0.0 -0.2
Tournaisian West 0.3 0.1 0.3 0.7 0.5 0.1 0.3 0.9 -0.2 0.0 0.0 -0.2
Mullinski South 0.0 0.0 1.1 1.1 0 0 0.6 0.6 0.0 0.0 0.5 0.5
Bobrikovski South 0.0 0.1 0.0 0.1 0.1 0.1 0 0.2 -0.1 0.0 0.0 -0.1
Ardatovski S 0.1 0.0 0.0 0.1 0.1 0 0 0.2 0.0 0.0 0.0 -0.1
Mullinski North 0.0 0.0 0.5 0.5 0 0 0 0 0.0 0.0 0.5 0.5
Total 9.2 2.6 5.1 16.9 12.8 5.2 4.9 23.2 -3.6 -2.6 0.2 -6.3
6 Not included in the total
7 Some differences due to rounding
OPERATIONAL REVIEW
17 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Stepnoy Leopard reserves
No new field activities were carried out at the Stepnoy Leopard fields
during the reporting period. The CPR prepared by Xodus Group
Limited in 2024 remains the latest completed independent reserves
evaluation; however, the Group is currently undertaking a broader
reassessment of the development concept and has engaged McDaniel
& Associates Ltd. to prepare a new independent CPR.
The Group continues to carry out in-house subsurface analysis across
the four Eastern Fields to support that reassessment. Upon
completion of this work, a similar in-house evaluation of the
Kameskoye Field is expected to be undertaken.
The Company expects that amendments to the Field Development
Plan may be required, reflecting potential changes to the
development concept and the production start-up timeline.
The first production well, Wtp-102, is currently expected to be drilled
in H2 2026, subject to the outcome of the ongoing review, and is
expected to include an extended testing programme to support
confirmation or refinement of the development concept.
The Stepnoy Leopard fields, located in the West Kazakhstan region,
form part of Nostrum Oil & Gas PLC’s portfolio, with an 80% working
interest under the current licence terms. The fields, covering multiple
hydrocarbon-bearing reservoirs, were historically explored during the
Soviet era, with over 100 wells drilled. Nostrum acquired the asset in
2023 and has since conducted appraisal activities to refine the
development plan, leveraging its existing infrastructure at
Chinarevskoye. The asset comprises multiple discovered hydrocarbon
accumulations across the Permian Artinskian, Filippovski, and
Kalinovski reservoirs in the West Kazakhstan Region. The governing
licence remains valid until December 2044.
The Stepnoy Leopard CPR, an independent third-party evaluation of
the reserves and resources of the SL fields as at 1 January 2024, was
prepared by Xodus Group Limited.
A summary of the Reserves associated with Stepnoy Leopard, on a
gross and working interest basis, is shown in Tables 1 and 2. The
reserves are an arithmetic summation of the economically
recoverable resources for five different fields in Stepnoy Leopard,
including the four eastern Artinskian fields and the Kamenskoye field
in the west of the area.
The reserves information below reflects the 2024 Xodus CPR and is
presented as the latest completed independent reserves evaluation.
As described above, the Group is currently undertaking a further
review of the development concept and reserves position.
Table 1 – Reserves summary (Gross)
Category
Sales Gas
(bcf)
Condensate & Oil
(mm barrels)
LPG
(ktonnes)
Total Gross
(mmboe)
Proven 1P 408.54 16.96 414.47 90
Proven and Probable 2P 620.93 26.62 629.93 138
Proven, Probable and Possible 3P 779.36 34.27 790.66 174
Table 2 – Reserves summary (80% Working Interest)
Note: Gross and Working Interest to Nostrum as of 1 January 2024
Reserves by Reservoir
Artinskian Reservoir: Contains the majority of the Petroleum Initially-
In-Place (PIIP).
Massive stromatolitic reefal carbonates (dolomites and limestones)
were deposited in the final stage of Moscovian-Artinskian carbonate
cycle, which built a broad shelf along the northern part of the Pre-
Caspian basin. These carbonates build a long chain of barrier reefs,
separated by perpendicular passages to the shoreline acted as current
channels, forming a rim along the shelf edge. Shelf rims rises from 150
m to almost 300 m above shelf table. Reservoir rocks are fractured,
which greatly contribute to their permeability. In general, vugs and
fractures are unevenly distributed and are controlled by the primary
reefal macro-structure.
Filippovski Reservoir: Holds a subordinate volume of PIIP. Dolomite
formations within occasionally dolomitic limestones above Artinskian
and partially onlapping. Gradually thickens away from the Artinskian
shelf rim to the North-West and reaches 250 m within the boundary
of the licences block. It was deposited within a broad shelf lagoon in
the North-West of the Artinskian barrier rim.
Kalinovski Reservoir: This overpressured reservoir, which occurs only
in the Kamenskoye field, has a proven hydrocarbon accumulation in a
thick, salt-entrapped carbonate-clastic sequence (Lower Permian
Kungur), which is influenced by salt tectonics. The subordinated clastic
horizon is thin and located at the bottom of the sequence.
Economic Evaluation
The economic metrics set out below are derived from the
assumptions used in the 2024 Xodus CPR and should be read in that
context. The Net Present Value (NPV) at a 10% discount rate for the
Stepnoy Leopard reserves is summarised below:
Category NPV10 (US$m) IRR (Net
Proven 1P 120.3 26.8%
Proven and Probable 2P 220.4 33.8%
Proven, Probable and Possible 3P 267.9 34.3%
The project economics are based on Brent Oil Forward Curve pricing
(as of May 2024) for oil and condensate, with domestic pricing for gas
and LPG set by Kazakhstan’s Ministry of Energy. The reserves
estimates reflect an economic cut-off, ensuring commercial viability
under the current fiscal regime.
Category
Sales Gas
(bcf)
Condensate & Oil
(mm barrels)
LPG
(ktonnes)
Total Gross
(mmboe)
Proven 1P 326.83 13.58 331.58 72
Proven and Probable 2P 496.74 21.30 503.94 110
Proven, Probable and Possible 3P 623.49 27.42 632.53 139
17 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Stepnoy Leopard reserves
No new field activities were carried out at the Stepnoy Leopard fields
during the reporting period. The CPR prepared by Xodus Group
Limited in 2024 remains the latest completed independent reserves
evaluation; however, the Group is currently undertaking a broader
reassessment of the development concept and has engaged McDaniel
& Associates Ltd. to prepare a new independent CPR.
The Group continues to carry out in-house subsurface analysis across
the four Eastern Fields to support that reassessment. Upon
completion of this work, a similar in-house evaluation of the
Kameskoye Field is expected to be undertaken.
The Company expects that amendments to the Field Development
Plan may be required, reflecting potential changes to the
development concept and the production start-up timeline.
The first production well, Wtp-102, is currently expected to be drilled
in H2 2026, subject to the outcome of the ongoing review, and is
expected to include an extended testing programme to support
confirmation or refinement of the development concept.
The Stepnoy Leopard fields, located in the West Kazakhstan region,
form part of Nostrum Oil & Gas PLC’s portfolio, with an 80% working
interest under the current licence terms. The fields, covering multiple
hydrocarbon-bearing reservoirs, were historically explored during the
Soviet era, with over 100 wells drilled. Nostrum acquired the asset in
2023 and has since conducted appraisal activities to refine the
development plan, leveraging its existing infrastructure at
Chinarevskoye. The asset comprises multiple discovered hydrocarbon
accumulations across the Permian Artinskian, Filippovski, and
Kalinovski reservoirs in the West Kazakhstan Region. The governing
licence remains valid until December 2044.
The Stepnoy Leopard CPR, an independent third-party evaluation of
the reserves and resources of the SL fields as at 1 January 2024, was
prepared by Xodus Group Limited.
A summary of the Reserves associated with Stepnoy Leopard, on a
gross and working interest basis, is shown in Tables 1 and 2. The
reserves are an arithmetic summation of the economically
recoverable resources for five different fields in Stepnoy Leopard,
including the four eastern Artinskian fields and the Kamenskoye field
in the west of the area.
The reserves information below reflects the 2024 Xodus CPR and is
presented as the latest completed independent reserves evaluation.
As described above, the Group is currently undertaking a further
review of the development concept and reserves position.
Table 1 – Reserves summary (Gross)
Category
Sales Gas
(bcf)
Condensate & Oil
(mm barrels)
LPG
(ktonnes)
Total Gross
(mmboe)
Proven 1P 408.54 16.96 414.47 90
Proven and Probable 2P 620.93 26.62 629.93 138
Proven, Probable and Possible 3P 779.36 34.27 790.66 174
Table 2 – Reserves summary (80% Working Interest)
Note: Gross and Working Interest to Nostrum as of 1 January 2024
Reserves by Reservoir
Artinskian Reservoir: Contains the majority of the Petroleum Initially-
In-Place (PIIP).
Massive stromatolitic reefal carbonates (dolomites and limestones)
were deposited in the final stage of Moscovian-Artinskian carbonate
cycle, which built a broad shelf along the northern part of the Pre-
Caspian basin. These carbonates build a long chain of barrier reefs,
separated by perpendicular passages to the shoreline acted as current
channels, forming a rim along the shelf edge. Shelf rims rises from 150
m to almost 300 m above shelf table. Reservoir rocks are fractured,
which greatly contribute to their permeability. In general, vugs and
fractures are unevenly distributed and are controlled by the primary
reefal macro-structure.
Filippovski Reservoir: Holds a subordinate volume of PIIP. Dolomite
formations within occasionally dolomitic limestones above Artinskian
and partially onlapping. Gradually thickens away from the Artinskian
shelf rim to the North-West and reaches 250 m within the boundary
of the licences block. It was deposited within a broad shelf lagoon in
the North-West of the Artinskian barrier rim.
Kalinovski Reservoir: This overpressured reservoir, which occurs only
in the Kamenskoye field, has a proven hydrocarbon accumulation in a
thick, salt-entrapped carbonate-clastic sequence (Lower Permian
Kungur), which is influenced by salt tectonics. The subordinated clastic
horizon is thin and located at the bottom of the sequence.
Economic Evaluation
The economic metrics set out below are derived from the
assumptions used in the 2024 Xodus CPR and should be read in that
context. The Net Present Value (NPV) at a 10% discount rate for the
Stepnoy Leopard reserves is summarised below:
Category NPV10 (US$m) IRR (Net
Proven 1P 120.3 26.8%
Proven and Probable 2P 220.4 33.8%
Proven, Probable and Possible 3P 267.9 34.3%
The project economics are based on Brent Oil Forward Curve pricing
(as of May 2024) for oil and condensate, with domestic pricing for gas
and LPG set by Kazakhstan’s Ministry of Energy. The reserves
estimates reflect an economic cut-off, ensuring commercial viability
under the current fiscal regime.
Category
Sales Gas
(bcf)
Condensate & Oil
(mm barrels)
LPG
(ktonnes)
Total Gross
(mmboe)
Proven 1P 326.83 13.58 331.58 72
Proven and Probable 2P 496.74 21.30 503.94 110
Proven, Probable and Possible 3P 623.49 27.42 632.53 139
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
18
STRATEGIC REPORT
Field Geology & Development Potential
The Stepnoy Leopard fields consists of eight hydrocarbon-bearing
structures in which the Artinskian, Filippovski and Kalinovski reservoirs
may be formed. Reserves have been identified for only 5 structures (4
eastern – Artinskian reservoir and Kamenskoye – Kalinovski reservoir),
while the 3 western structures only hold resources. The primary
reservoirs are carbonate formations, characterised by a high degree of
reservoir properties heterogeneity and partially high fracture
permeability. Initial geological studies and dynamic modeling
supported the prior development concept, although the Group is
currently reassessing the subsurface model and development
approach.
A phased drilling campaign remains under review with the initial focus
expected to be on the eastern Artinskian fields and the Kamenskoye
field, subject to the outcome of the ongoing assessment.
Infrastructure development includes well tie-ins to existing processing
facilities at Chinarevskoye, which will enable efficient hydrocarbon
extraction and transportation.
Contingent Resources & Long-Term Outlook
In addition to booked reserves, Contingent Resources in the western
Artinskian fields and post-licence production opportunities amount to
361.76 BCF of raw gas (2C) and 7.05 MMSTB of condensate & oil (2C).
These volumes represent future development potential, subject to
additional appraisal activities and regulatory approvals.
Future Work & Strategic Focus
• Subsurface reassessment: continuing technical work and independent
review to reassess reserves, development sequencing and commercial
assumptions.
• Development planning: re-evaluating infrastructure access,
processing routes, sales delivery points and field development
phasing.
• Regulatory alignment: assessing whether amendments to the Field
Development Plan or other approvals may be required.
• Capital discipline: aligning any future development activity with
current market conditions, risk-adjusted economics and the Group’s
capital allocation priorities.
STRATEGIC REPORT
Field Geology & Development Potential
The Stepnoy Leopard fields consists of eight hydrocarbon-bearing
structures in which the Artinskian, Filippovski and Kalinovski reservoirs
may be formed. Reserves have been identified for only 5 structures (4
eastern – Artinskian reservoir and Kamenskoye – Kalinovski reservoir),
while the 3 western structures only hold resources. The primary
reservoirs are carbonate formations, characterised by a high degree of
reservoir properties heterogeneity and partially high fracture
permeability. Initial geological studies and dynamic modeling
supported the prior development concept, although the Group is
currently reassessing the subsurface model and development
approach.
A phased drilling campaign remains under review with the initial focus
expected to be on the eastern Artinskian fields and the Kamenskoye
field, subject to the outcome of the ongoing assessment.
Infrastructure development includes well tie-ins to existing processing
facilities at Chinarevskoye, which will enable efficient hydrocarbon
extraction and transportation.
Contingent Resources & Long-Term Outlook
In addition to booked reserves, Contingent Resources in the western
Artinskian fields and post-licence production opportunities amount to
361.76 BCF of raw gas (2C) and 7.05 MMSTB of condensate & oil (2C).
These volumes represent future development potential, subject to
additional appraisal activities and regulatory approvals.
Future Work & Strategic Focus
• Subsurface reassessment: continuing technical work and independent
review to reassess reserves, development sequencing and commercial
assumptions.
• Development planning: re-evaluating infrastructure access,
processing routes, sales delivery points and field development
phasing.
• Regulatory alignment: assessing whether amendments to the Field
Development Plan or other approvals may be required.
• Capital discipline: aligning any future development activity with
current market conditions, risk-adjusted economics and the Group’s
capital allocation priorities.
OPERATIONAL REVIEW
19 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Showcasing our infrastructure
With the re-start of GTU 3, complementing the
previous gas processing trains, we have built a
substantial gas processing hub that is currently
under-utilised but has the potential to support
material gas production and sales in north-
western Kazakhstan for years to come.
Oil treatment Facility
The oil treatment facility (OTF) has a maximum throughput capacity of
400,000 tons per annum. The OTF associated infrastructure includes a
gas-lift facility that was commissioned in 2015 and a liquid
hydrocarbons pumping station transferring crude oil and stabilised
condensate via the liquids pipeline to the rail loading terminal and
connection to the KTO oil sales pipeline 5km from the terminal.
In 2025, 0.91 mmboe of crude oil and 3.41 mmboe of stabilised
condensate (including third-party volumes) were transferred through
the pipeline from the Field to the Terminal.
Raw Gas Treatment Facility
The gas treatment facility (GTF) is designed to treat raw gas from gas
condensate reservoirs (and the associated gas coming from the OTF)
into condensate, LPG and dry gas with a by-product of granulated
Sulphur. The gas treatment facility includes three gas treatment units
GTU 1, 2 & 3, which have the capacity to treat 4.2 billion cubic meters
of raw gas per annum.
Low-pressure system
A low-pressure system has been installed to facilitate the reduction of
the GTF inlet pressure from 42 to 8 bar, to prolong the run-life of
wells, primarily gas-condensate. Installed capacity of gas compression
is 48,000 standard cubic meters per hour and all gas-condensate wells
are flowing through the low-pressure system as of the end of 2025.
In Q4 2025, the LPS3 project was completed, adding 10,400 standard
cubic metres per hour of capacity and increasing total installed low-
pressure system capacity to 58,400 standard cubic metres per hour.
Gas-lift system
The gas-lift system is designed to enhance oil and gas-condensate
production. The system consists of three gas-lift compressors with a
total capacity of 54,000 standard cubic meters per hour.
Currently, the compressors are operating at approximately 44,000
standard cubic metres per hour. Total installed capacity of 54,000
standard cubic metres per hour is expected to be realised following
the low-pressure capacity upgrade. There were 34 active wells
running with gas lift (25 oil wells, 9 gas-condensate wells).
Power generation plant
The gas-fired power generation plant is linked to the GTF and has an
electrical power output capacity of 26 MW. The generated capacity of
the plant is sufficient to meet both current and potential future power
requirements. Backup generation capacity of up to 15 MW is available
at the processing facilities.
Storage facilities
Nostrum has over 35,000 cubic meters of storage capacity for liquids
at its field site and rail loading terminal.
Gas pipeline
Nostrum has its own 17 km dry gas pipeline, which is linked to the
Orenburg-Novopskov gas pipeline. The pipeline has sufficient capacity
to export the entire dry gas production from the GTF at maximum
operating capacity.
Liquids pipeline
Nostrum has its own 120 km liquids pipeline that runs from the field
to the Company’s rail loading terminal in Beles (near Uralsk). The
pipeline has a maximum daily throughput capacity of 3,500 t/d.
Rail Loading Terminal
Nostrum has its own automated rail loading terminal at Beles, located
near the city of Uralsk, that receives all produced crude oil and
condensate and has a daily capacity of 5,000 t/d.
KTO pipeline connection
Nostrum has constructed a secondary crude oil pipeline to enable
export sales from its rail loading terminal via the Atyrau-Samara
export pipeline operated by KazTransOil (KTO). The connection to the
KTO pipeline has enhanced the Company’s ability to maximise crude
oil netbacks through the commodity cycle.
Storage
5 km³ Oil
Oil Treatment
Facility 400 kt
Storage
25 km³
Storage
10 km³
Stabilised
condensate
Dry gas
LPG
Gas
condensate
wells
Third-party
hydrocarbons Gas treatment
facilities (GTF)
Oil
Gas
Crude oil wells
3 km³/d
Water injection
1,200 km³/d
Gas lift
48 m³/h
Low pressure
system
41 MWh
Power generation
1) GTU 3: 2.5 BCMA
2) LPG Storage and loading
3) Power plant: 26mwh GTU
4) 1&2: 1.7 BCMA
5) Oil/Cond. Storage
6) Oil Treatment unit (OTU)
19 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Showcasing our infrastructure
With the re-start of GTU 3, complementing the
previous gas processing trains, we have built a
substantial gas processing hub that is currently
under-utilised but has the potential to support
material gas production and sales in north-
western Kazakhstan for years to come.
Oil treatment Facility
The oil treatment facility (OTF) has a maximum throughput capacity of
400,000 tons per annum. The OTF associated infrastructure includes a
gas-lift facility that was commissioned in 2015 and a liquid
hydrocarbons pumping station transferring crude oil and stabilised
condensate via the liquids pipeline to the rail loading terminal and
connection to the KTO oil sales pipeline 5km from the terminal.
In 2025, 0.91 mmboe of crude oil and 3.41 mmboe of stabilised
condensate (including third-party volumes) were transferred through
the pipeline from the Field to the Terminal.
Raw Gas Treatment Facility
The gas treatment facility (GTF) is designed to treat raw gas from gas
condensate reservoirs (and the associated gas coming from the OTF)
into condensate, LPG and dry gas with a by-product of granulated
Sulphur. The gas treatment facility includes three gas treatment units
GTU 1, 2 & 3, which have the capacity to treat 4.2 billion cubic meters
of raw gas per annum.
Low-pressure system
A low-pressure system has been installed to facilitate the reduction of
the GTF inlet pressure from 42 to 8 bar, to prolong the run-life of
wells, primarily gas-condensate. Installed capacity of gas compression
is 48,000 standard cubic meters per hour and all gas-condensate wells
are flowing through the low-pressure system as of the end of 2025.
In Q4 2025, the LPS3 project was completed, adding 10,400 standard
cubic metres per hour of capacity and increasing total installed low-
pressure system capacity to 58,400 standard cubic metres per hour.
Gas-lift system
The gas-lift system is designed to enhance oil and gas-condensate
production. The system consists of three gas-lift compressors with a
total capacity of 54,000 standard cubic meters per hour.
Currently, the compressors are operating at approximately 44,000
standard cubic metres per hour. Total installed capacity of 54,000
standard cubic metres per hour is expected to be realised following
the low-pressure capacity upgrade. There were 34 active wells
running with gas lift (25 oil wells, 9 gas-condensate wells).
Power generation plant
The gas-fired power generation plant is linked to the GTF and has an
electrical power output capacity of 26 MW. The generated capacity of
the plant is sufficient to meet both current and potential future power
requirements. Backup generation capacity of up to 15 MW is available
at the processing facilities.
Storage facilities
Nostrum has over 35,000 cubic meters of storage capacity for liquids
at its field site and rail loading terminal.
Gas pipeline
Nostrum has its own 17 km dry gas pipeline, which is linked to the
Orenburg-Novopskov gas pipeline. The pipeline has sufficient capacity
to export the entire dry gas production from the GTF at maximum
operating capacity.
Liquids pipeline
Nostrum has its own 120 km liquids pipeline that runs from the field
to the Company’s rail loading terminal in Beles (near Uralsk). The
pipeline has a maximum daily throughput capacity of 3,500 t/d.
Rail Loading Terminal
Nostrum has its own automated rail loading terminal at Beles, located
near the city of Uralsk, that receives all produced crude oil and
condensate and has a daily capacity of 5,000 t/d.
KTO pipeline connection
Nostrum has constructed a secondary crude oil pipeline to enable
export sales from its rail loading terminal via the Atyrau-Samara
export pipeline operated by KazTransOil (KTO). The connection to the
KTO pipeline has enhanced the Company’s ability to maximise crude
oil netbacks through the commodity cycle.
Storage
5 km³ Oil
Oil Treatment
Facility 400 kt
Storage
25 km³
Storage
10 km³
Stabilised
condensate
Dry gas
LPG
Gas
condensate
wells
Third-party
hydrocarbons Gas treatment
facilities (GTF)
Oil
Gas
Crude oil wells
3 km³/d
Water injection
1,200 km³/d
Gas lift
48 m³/h
Low pressure
system
41 MWh
Power generation
1) GTU 3: 2.5 BCMA
2) LPG Storage and loading
3) Power plant: 26mwh GTU
4) 1&2: 1.7 BCMA
5) Oil/Cond. Storage
6) Oil Treatment unit (OTU)
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
20
STRATEGIC REPORT
RISK MANAGEMENT
The Group’s system of internal control includes
its governance framework, segregation of
authorities and duties, policies and procedures,
training, supervision, internal communications,
and monitoring by senior management and the
Board of planning and decision-making
processes.
Risk management framework
The Board, supported by the Audit Committee and senior
management, has ultimate responsibility for risk management and
internal control, including determining the nature and extent of the
principal risks it is willing to accept in pursuing the Group’s strategic
objectives, and for ensuring that an appropriate risk-awareness
culture is embedded throughout the Group.
Operational day-to-day risks are inherent in the Group’s various
business functions and processes. These are categorised as business
function risks and are identified and managed by relevant staff and
managers in the course of their activities to support safety,
compliance and efficiency. Members of the Senior Management
Team have overall responsibility for managing such business function
risks within their areas of responsibility, although this may be
delegated to direct reports. At the highest level, identified risks are
aggregated and categorised into the following principal risk
categories: strategic, operational, financial, compliance and other,
which are monitored by senior management and the Board.
Based on risk registers, related analysis and discussions, senior
management and the Board periodically review previously identified
significant risks, update their understanding of the likelihood of
occurrence and potential impact, and identify potential new
significant risks.
These significant risks are discussed in more detail in the Principal Risks
and Uncertainties section.
In 2025, the processes related to risk management and internal
control continued to be developed and operated having regard to
the UK Corporate Governance Code and the FRC’s Guidance on
Risk Management, Internal Control and Related Financial and
Business Reporting issued in September 2014. The Board and Audit
Committee are aware of the additional requirements relating to
risk management and internal control set out in the UK Corporate
Governance Code 2024.
During 2024 and part of 2025 the Group did not have a dedicated
internal audit function and relied instead on third-party financial and
technical reviews, together with targeted internal reviews overseen
by management, with the results reported to the relevant Board
committee.
In late 2025 the Group established a dedicated Internal Audit
function. The function has recently commenced its activities and is
currently in the process of formalising its internal audit framework,
including the Internal Audit Charter and the audit plan, which are
subject to approval by the Audit Committee. Initial work has begun in
support of the establishment of the function and the development of
its assurance approach. Internal Audit is intended to operate as the
third line of defence and to provide independent assurance to the
Audit Committee and the Board over the effectiveness of the Group’s
systems of risk management and internal control.
The Board and Audit Committee obtain assurance over the
effectiveness of the internal control framework through: (a) regular,
detailed and timely operational and financial reporting against key
performance targets, historical trends and industry norms, together
with investigation of any material deviations or failures; (b)
independent expert opinions on matters of importance, including
changes or disputes in the legal or regulatory environment; (c) visits to
the Group’s operations in Kazakhstan and enquiries of local staff and
management; (d) reinforcement of the internal whistleblowing
system; (e) evaluation of material investment policies and proposals;
and (f) external professional advice on the Group’s risk register and
Board assurance framework.
Following the end of 2025, the Board continues to monitor closely
internal control over financial reporting and the related party
identification and disclosure processes. More detailed information can
be found in the Risk management and internal controls section of the
Audit Committee report on page 78.
Environmental, social and governance (ESG) matters
ESG matters form an integral part of the areas covered by the Group’s
systems of risk management and internal controls, and the Board
recognises their significance and importance. Identified ESG risks and
related responses can be seen within Operational, Climate Change
and Other risks in the “Principal risks and uncertainties” disclosure on
pages 22-26.
The Board receives regular information relevant to the management
of such risks. Management is responsible for ensuring that systems of
risk management and internal control are in place to effectively
manage and monitor energy risks and other ESG matters.
More detailed disclosure on the established policies and procedures in
these areas can be found on pages 35-54.
Changes from prior-year risk assessment
In 2025, the principal risks and uncertainties managed and monitored
by the Board and senior management included most of the risks for
2024 and for which the related risk assessments did not change
significantly.
The Board has carried out a review of the effectiveness of the Group’s
risk management and internal controls systems, covering all material
controls including financial, operational and compliance controls. The
Board has carried out a robust assessment of the Company’s
emerging and principal risks.
STRATEGIC REPORT
RISK MANAGEMENT
The Group’s system of internal control includes
its governance framework, segregation of
authorities and duties, policies and procedures,
training, supervision, internal communications,
and monitoring by senior management and the
Board of planning and decision-making
processes.
Risk management framework
The Board, supported by the Audit Committee and senior
management, has ultimate responsibility for risk management and
internal control, including determining the nature and extent of the
principal risks it is willing to accept in pursuing the Group’s strategic
objectives, and for ensuring that an appropriate risk-awareness
culture is embedded throughout the Group.
Operational day-to-day risks are inherent in the Group’s various
business functions and processes. These are categorised as business
function risks and are identified and managed by relevant staff and
managers in the course of their activities to support safety,
compliance and efficiency. Members of the Senior Management
Team have overall responsibility for managing such business function
risks within their areas of responsibility, although this may be
delegated to direct reports. At the highest level, identified risks are
aggregated and categorised into the following principal risk
categories: strategic, operational, financial, compliance and other,
which are monitored by senior management and the Board.
Based on risk registers, related analysis and discussions, senior
management and the Board periodically review previously identified
significant risks, update their understanding of the likelihood of
occurrence and potential impact, and identify potential new
significant risks.
These significant risks are discussed in more detail in the Principal Risks
and Uncertainties section.
In 2025, the processes related to risk management and internal
control continued to be developed and operated having regard to
the UK Corporate Governance Code and the FRC’s Guidance on
Risk Management, Internal Control and Related Financial and
Business Reporting issued in September 2014. The Board and Audit
Committee are aware of the additional requirements relating to
risk management and internal control set out in the UK Corporate
Governance Code 2024.
During 2024 and part of 2025 the Group did not have a dedicated
internal audit function and relied instead on third-party financial and
technical reviews, together with targeted internal reviews overseen
by management, with the results reported to the relevant Board
committee.
In late 2025 the Group established a dedicated Internal Audit
function. The function has recently commenced its activities and is
currently in the process of formalising its internal audit framework,
including the Internal Audit Charter and the audit plan, which are
subject to approval by the Audit Committee. Initial work has begun in
support of the establishment of the function and the development of
its assurance approach. Internal Audit is intended to operate as the
third line of defence and to provide independent assurance to the
Audit Committee and the Board over the effectiveness of the Group’s
systems of risk management and internal control.
The Board and Audit Committee obtain assurance over the
effectiveness of the internal control framework through: (a) regular,
detailed and timely operational and financial reporting against key
performance targets, historical trends and industry norms, together
with investigation of any material deviations or failures; (b)
independent expert opinions on matters of importance, including
changes or disputes in the legal or regulatory environment; (c) visits to
the Group’s operations in Kazakhstan and enquiries of local staff and
management; (d) reinforcement of the internal whistleblowing
system; (e) evaluation of material investment policies and proposals;
and (f) external professional advice on the Group’s risk register and
Board assurance framework.
Following the end of 2025, the Board continues to monitor closely
internal control over financial reporting and the related party
identification and disclosure processes. More detailed information can
be found in the Risk management and internal controls section of the
Audit Committee report on page 78.
Environmental, social and governance (ESG) matters
ESG matters form an integral part of the areas covered by the Group’s
systems of risk management and internal controls, and the Board
recognises their significance and importance. Identified ESG risks and
related responses can be seen within Operational, Climate Change
and Other risks in the “Principal risks and uncertainties” disclosure on
pages 22-26.
The Board receives regular information relevant to the management
of such risks. Management is responsible for ensuring that systems of
risk management and internal control are in place to effectively
manage and monitor energy risks and other ESG matters.
More detailed disclosure on the established policies and procedures in
these areas can be found on pages 35-54.
Changes from prior-year risk assessment
In 2025, the principal risks and uncertainties managed and monitored
by the Board and senior management included most of the risks for
2024 and for which the related risk assessments did not change
significantly.
The Board has carried out a review of the effectiveness of the Group’s
risk management and internal controls systems, covering all material
controls including financial, operational and compliance controls. The
Board has carried out a robust assessment of the Company’s
emerging and principal risks.
21
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
Risk management framework
Strategic goals/KPIs Reports
Principal risks and
uncertainties Board (supported by Audit Committee)
Directors’ risks
register
Heads of
business sub-
functions
Risk
management,
Compliance,
QHSE, Security,
Controlling
Internal audit,
process audits
and
investigations
1. Risk identification
2. Risk assessment
3. Risk response (tolerate, treat, transfer, terminate)
4. Resourcing controls
5. Reaction planning
6. Reporting
and monitoring
7. Reviewing
risk
management
framework
Roles and responsibilities (The Three Lines of
Defence)
1st line of defence 2nd line of defence 3rd line of defence
Risk management process
Business function risks Heads of business functions, acting
as the 1st line of defence, own and
manage operational risks related to
their respective areas of activity.
The 2nd line of defence provides
oversight and support to help
ensure that risk management
practices are effective.
Internal audit, acting as the 3rd line
of defence, provides independent
assurance over the effectiveness of
systems of risk management and
internal control.
The Senior Management Team
supports the Board in its oversight
and monitoring role and performs
management and reporting at the
level of directors’ risks.
The Board oversees the design and
implementation of systems of risk
management and internal control
and manages and reports on
principal risks.
Risk universe
Senior management team
Risk management framework
Strategic goals/KPIs Reports
Principal risks and
uncertainties Board (supported by Audit Committee)
Directors’ risks
register
Heads of
business sub-
functions
Risk
management,
Compliance,
QHSE, Security,
Controlling
Internal audit,
process audits
and
investigations
1. Risk identification
2. Risk assessment
3. Risk response (tolerate, treat, transfer, terminate)
4. Resourcing controls
5. Reaction planning
6. Reporting
and monitoring
7. Reviewing
risk
management
framework
Roles and responsibilities (The Three Lines of
Defence)
1st line of defence 2nd line of defence 3rd line of defence
Risk management process
Business function risks Heads of business functions, acting
as the 1st line of defence, own and
manage operational risks related to
their respective areas of activity.
The 2nd line of defence provides
oversight and support to help
ensure that risk management
practices are effective.
Internal audit, acting as the 3rd line
of defence, provides independent
assurance over the effectiveness of
systems of risk management and
internal control.
The Senior Management Team
supports the Board in its oversight
and monitoring role and performs
management and reporting at the
level of directors’ risks.
The Board oversees the design and
implementation of systems of risk
management and internal control
and manages and reports on
principal risks.
Risk universe
Senior management team
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
22
STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES
Strategic risks
Geopolitical factors
The Group’s operations are exposed to risks associated with the
political and business environment in Kazakhstan, which is the
Group’s sole country of commercial operations, as well as
neighbouring jurisdictions relevant to its logistics, trading and
regulatory environment. Nostrum has historically benefited from its
geo-strategic position in the heart of an export corridor between
Russia and markets to the west of the Caspian, however, the Group
remains exposed to the risks of the ongoing economic and political
impact on Russia of its actions in Ukraine, being reliant on its transport
routes and ports. Ongoing severe sanctions and trade restrictions
imposed by, among others, the US, UK and EU on Russia, have
increased the economic and political uncertainty and may have a
material adverse impact on the Group’s business, results of
operations, financial condition and prospects.
Risk management: Nostrum’s Senior Management Team is
proactively engaged with key stakeholders among state authorities to
address and resolve any potential issues at early stages. In addition,
the Group endeavours to identify legislative changes at early stages
before their introduction and, to the extent possible, participate in the
relevant working groups engaged in development of such changes. To
mitigate geopolitical, regional and customer risks, the Group
continues to strengthen customer relationships through establishing
long-term off-take agreements whilst also looking at possibilities to
geographically diversify its customer portfolio. The Group has
implemented robust internal controls and procedures to ensure
compliance with international sanctions on Russian and Belarus
individuals, organisations and supplies of goods and services, including
the evaluation of counterparties and their banks, contract procedures,
and liaising with external legal advisers. The Group regularly updates
lists of all persons/entities and products sanctioned in order to ensure
Nostrum does not enter into transactions which violate applicable
sanctions.
Product price volatilities
The Group’s operations and financial performance are exposed to
changes in the market prices for its products driven by external
business and political factors, which are outside the Group’s control.
Oil and gas prices are subject to volatility due to a variety of factors
beyond the Group’s control.
In particular, throughout 2025 the average Brent crude oil price
demonstrated a decline of 14%. The long-term outlook for oil prices
remained at US$70/bbl.
Factors affecting crude oil prices include supply and demand
fundamentals, global geopolitical events, production quotas set by
OPEC and non-OPEC producers. Because the domestic selling price of
dry gas is directly linked to crude oil pricing, the Group may also face
volatility in realised gas prices. Also, the Group could be required by
governmental authorities to sell its oil, condensate, LPG and gas
domestically at prices determined by the RoK Government, which
could be significantly lower than prices the Group might otherwise
achieve. Lower oil and gas prices may reduce the economic viability of
the Group’s operations and proposed operations and materially
adversely affect its business, results of operations, financial condition
and prospects. In particular, the Group’s ability to produce
economically from the Chinarevskoye Field or any prospective fields
will be determined, in large part, by the difference between the
revenue received for its products and the operating costs, taxation
costs, royalties and costs incurred in transporting and selling those
products.
Risk management: The Group quarterly revisits the product price
assumptions used in its short-term, medium-term and long-term
financial models, and performs stress testing of such forecasts to
fluctuations in product prices and these are monitored by senior
management and the Board. The Group continues to take prudent
actions to protect liquidity, including identifying reductions in
operating costs, general and administrative, and selling and
transportation costs that could be implemented without having a
negative impact on production or operations in the going concern
period. Senior management constantly monitors the Group’s
exposure to foreign currency exchange rate changes and makes plans
for necessary measures. In addition, the Group maintains its
relationships with multiple financial institutions should it need to
implement commodity price hedging contracts. No such contracts
were entered into in 2025.
Filling the spare gas processing capacity
The Chinarevskoye field is a mature declining asset with a proved and
probable reserves base at a level that will produce volumes of
hydrocarbons including raw gas sufficient to utilise less than 15
percent of capacity available at the Group’s gas treatment facilities,
which have a combined 4.2 billion cubic meters capacity per annum.
The Group is therefore reliant on acquiring and developing nearby
assets with significant resource potential and/or processing third
party gas through its processing facilities to continue to produce free
cash flows and build sufficient cash reserves to repay future
indebtedness. The ability to negotiate and secure these strategic
acquisitions is highly uncertain and the ability to fund the
development of such projects, the costs of which may be substantial
and require external funding, may not materialise. Oil and gas
exploration and production activities are capital intensive and subject
to financing limitations and inherent uncertainty in their outcome.
Further, significant expenditure is required to establish the extent of
oil and gas reserves through seismic re-processing and mapping, other
surveys as well as drilling. Therefore, there can be no certainty that
further commercial quantities of oil and gas will be discovered at
Chinarevskoye or acquired by the Group to enable it to utilise the
spare capacity in its treatment facilities.
Risk management: The Group’s strategy is aimed at diversification of
its sources of feed stock to the processing facilities, which is expected
to provide the Group with an opportunity to gain from expanding the
use of available capacities, technological resources and human capital,
and ultimately benefit from its under utilised infrastructure. The GTU-
3 plant was upgraded and prepared to receive future gas supplies.
Throughout 2025, GTU 1, GTU 2 and GTU 3 gas processing facilities
operated simultaneously, processing inlet gas from the Chinarevskoe
field and Ural O&G gas from the Rozhkovskoe field.
In March 2025, Zhaikmunai LLP entered into a binding agreement to
extend its processing of third-party hydrocarbons delivered by Ural
O&G on new terms until May 2031. The Group also continues to
optimise the operation of its existing processing facilities to support
flexible utilisation and maintain operational reliability.
The two-well appraisal programme at the Stepnoy Leopard fields has
generated substantial data. However, the Group is now undertaking a
broader reassessment of the development concept, including
subsurface modelling, project scope, economics, infrastructure access
and regulatory requirements. A new independent CPR has been
commissioned to support that reassessment, and the timing and
STRATEGIC REPORT
PRINCIPAL RISKS AND UNCERTAINTIES
Strategic risks
Geopolitical factors
The Group’s operations are exposed to risks associated with the
political and business environment in Kazakhstan, which is the
Group’s sole country of commercial operations, as well as
neighbouring jurisdictions relevant to its logistics, trading and
regulatory environment. Nostrum has historically benefited from its
geo-strategic position in the heart of an export corridor between
Russia and markets to the west of the Caspian, however, the Group
remains exposed to the risks of the ongoing economic and political
impact on Russia of its actions in Ukraine, being reliant on its transport
routes and ports. Ongoing severe sanctions and trade restrictions
imposed by, among others, the US, UK and EU on Russia, have
increased the economic and political uncertainty and may have a
material adverse impact on the Group’s business, results of
operations, financial condition and prospects.
Risk management: Nostrum’s Senior Management Team is
proactively engaged with key stakeholders among state authorities to
address and resolve any potential issues at early stages. In addition,
the Group endeavours to identify legislative changes at early stages
before their introduction and, to the extent possible, participate in the
relevant working groups engaged in development of such changes. To
mitigate geopolitical, regional and customer risks, the Group
continues to strengthen customer relationships through establishing
long-term off-take agreements whilst also looking at possibilities to
geographically diversify its customer portfolio. The Group has
implemented robust internal controls and procedures to ensure
compliance with international sanctions on Russian and Belarus
individuals, organisations and supplies of goods and services, including
the evaluation of counterparties and their banks, contract procedures,
and liaising with external legal advisers. The Group regularly updates
lists of all persons/entities and products sanctioned in order to ensure
Nostrum does not enter into transactions which violate applicable
sanctions.
Product price volatilities
The Group’s operations and financial performance are exposed to
changes in the market prices for its products driven by external
business and political factors, which are outside the Group’s control.
Oil and gas prices are subject to volatility due to a variety of factors
beyond the Group’s control.
In particular, throughout 2025 the average Brent crude oil price
demonstrated a decline of 14%. The long-term outlook for oil prices
remained at US$70/bbl.
Factors affecting crude oil prices include supply and demand
fundamentals, global geopolitical events, production quotas set by
OPEC and non-OPEC producers. Because the domestic selling price of
dry gas is directly linked to crude oil pricing, the Group may also face
volatility in realised gas prices. Also, the Group could be required by
governmental authorities to sell its oil, condensate, LPG and gas
domestically at prices determined by the RoK Government, which
could be significantly lower than prices the Group might otherwise
achieve. Lower oil and gas prices may reduce the economic viability of
the Group’s operations and proposed operations and materially
adversely affect its business, results of operations, financial condition
and prospects. In particular, the Group’s ability to produce
economically from the Chinarevskoye Field or any prospective fields
will be determined, in large part, by the difference between the
revenue received for its products and the operating costs, taxation
costs, royalties and costs incurred in transporting and selling those
products.
Risk management: The Group quarterly revisits the product price
assumptions used in its short-term, medium-term and long-term
financial models, and performs stress testing of such forecasts to
fluctuations in product prices and these are monitored by senior
management and the Board. The Group continues to take prudent
actions to protect liquidity, including identifying reductions in
operating costs, general and administrative, and selling and
transportation costs that could be implemented without having a
negative impact on production or operations in the going concern
period. Senior management constantly monitors the Group’s
exposure to foreign currency exchange rate changes and makes plans
for necessary measures. In addition, the Group maintains its
relationships with multiple financial institutions should it need to
implement commodity price hedging contracts. No such contracts
were entered into in 2025.
Filling the spare gas processing capacity
The Chinarevskoye field is a mature declining asset with a proved and
probable reserves base at a level that will produce volumes of
hydrocarbons including raw gas sufficient to utilise less than 15
percent of capacity available at the Group’s gas treatment facilities,
which have a combined 4.2 billion cubic meters capacity per annum.
The Group is therefore reliant on acquiring and developing nearby
assets with significant resource potential and/or processing third
party gas through its processing facilities to continue to produce free
cash flows and build sufficient cash reserves to repay future
indebtedness. The ability to negotiate and secure these strategic
acquisitions is highly uncertain and the ability to fund the
development of such projects, the costs of which may be substantial
and require external funding, may not materialise. Oil and gas
exploration and production activities are capital intensive and subject
to financing limitations and inherent uncertainty in their outcome.
Further, significant expenditure is required to establish the extent of
oil and gas reserves through seismic re-processing and mapping, other
surveys as well as drilling. Therefore, there can be no certainty that
further commercial quantities of oil and gas will be discovered at
Chinarevskoye or acquired by the Group to enable it to utilise the
spare capacity in its treatment facilities.
Risk management: The Group’s strategy is aimed at diversification of
its sources of feed stock to the processing facilities, which is expected
to provide the Group with an opportunity to gain from expanding the
use of available capacities, technological resources and human capital,
and ultimately benefit from its under utilised infrastructure. The GTU-
3 plant was upgraded and prepared to receive future gas supplies.
Throughout 2025, GTU 1, GTU 2 and GTU 3 gas processing facilities
operated simultaneously, processing inlet gas from the Chinarevskoe
field and Ural O&G gas from the Rozhkovskoe field.
In March 2025, Zhaikmunai LLP entered into a binding agreement to
extend its processing of third-party hydrocarbons delivered by Ural
O&G on new terms until May 2031. The Group also continues to
optimise the operation of its existing processing facilities to support
flexible utilisation and maintain operational reliability.
The two-well appraisal programme at the Stepnoy Leopard fields has
generated substantial data. However, the Group is now undertaking a
broader reassessment of the development concept, including
subsurface modelling, project scope, economics, infrastructure access
and regulatory requirements. A new independent CPR has been
commissioned to support that reassessment, and the timing and
PRINCIPAL RISKS AND UNCERTAINTIES
23 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
scope of future development activity remain under review. In April
2025, the Ministry of Energy of the Republic of Kazakhstan approved a
phased full-field development plan extending to 2044; however, the
Group’s current strategic review may result in proposed amendments
to that development concept. Subject to the review, the first
production well, Wtp-102, is currently planned to be drilled in H2
2026, and is expected to include an extended testing programme to
support confirmation or refinement of the proposed development
concept.
Also, the Group has several additional area-wide opportunities under
review that may serve to strengthen the Group’s upstream and
midstream portfolio in the coming years.
Operational risks
Oil and gas reserves and production
Reserve and resource estimates are inherently uncertain and depend
on a number of assumptions, including reservoir performance,
interpretation of geological and geophysical data, recovery rates,
future commodity prices, operating and development costs and the
commercial viability of production. These assumptions may differ
materially from actual outcomes, resulting in revisions to reserves,
production forecasts and expected cash flows.
The Group has previously experienced significant reclassifications of
reserves, including the transfer of volumes from 2P reserves to
contingent resources in 2020 –2021 (Chinarevskoye reservoir),
reflecting the crystallisation of such uncertainties. There is a risk that
further revisions may occur in the future.
Appraisal, development and production activities involve operational
and subsurface uncertainties and may not deliver the expected
outcomes, particularly in mature fields. The natural decline of the
Chinarevskoye reservoir, combined with increasing water cut, further
contributes to variability in future production levels.
Similar uncertainty also applies to the Stepnoy Leopard fields.
Although an independent third-party reserves evaluation has
previously been obtained, reserve estimates may change as additional
drilling results, testing data and technical analysis become available.
These factors may adversely affect the Group’s production profile,
financial performance, reserves base and ability to achieve its
strategic objectives.
Risk management: The Group has a department of geologists and
reservoir engineers who perform periodic assessments of its oil and
gas reserves in accordance with international standards on reserve
estimations and prepare production forecasting using advanced
exploration risk and resource assessment systems. For drilling and
well workover activities, the Group engages skilled personnel and
leading service suppliers, as well as employing internationally
accredited operations and cost monitoring systems, based on which
management oversees the work progress. The Group continued its
well workover and intervention programme in 2025 to minimise the
production decline and in 2026, the Group will reevaluate the
requirement and necessity of the drilling and well intervention
campaigns. Maintenance of wells and surface facilities is scheduled in
advance, in accordance with technical requirements, and all necessary
preparations are performed in a timely manner ensuring a high
quality of work. In addition, the Group has emergency response and
disaster recovery plans in place and periodically conducts necessary
training and testing procedures.
Cybersecurity risks
The Group may be vulnerable to the unauthorised or inappropriate
access to data, or the unlawful use, disclosure, disruption, deletion,
corruption, modification, inspection, recording, or devaluation of
information. Such cybersecurity failures may significantly adversely
affect the Group’s operations and financial results through
disruptions, shutdowns and delays in production and other activities.
Risk management: The Group uses Microsoft security solutions and
related monitoring tools to protect its data and systems, monitor
security and compliance, and identify areas where controls may be
enhanced..
At the start of employment each new employee is briefed on the
Group’s Information Security Policy and signs a confidentiality
agreement. All mailboxes and data are placed on Microsoft servers
with appropriate levels of protection. Passwords have complexity
requirement and double authorisation has been introduced for most
users. All data traffic, servers and computers are subject to scanning
and protection by anti-virus software. Physical access to data storage
is restricted to authorised personnel.
Environmental, Social and Governance risks
Risks of incidents, including risk of explosion
The Group’s activities involve a range of risks and hazards typical of
the oil and gas industry. These include, among other things, the
possibility of encountering unexpected geological formations or
abnormal reservoir pressures, fires or explosions, interruptions in
power supply, equipment malfunctions or operational accidents, early
depletion of reservoirs, well blowouts, uncontrolled releases of oil, gas
or well fluids, increasing water cut, environmental contamination and
other related environmental risks.
If such hazards are not effectively prevented or properly controlled,
they may result in a variety of consequences, including injuries to
employees or nearby communities, partial or complete suspension of
operations, significant damage to facilities and equipment, as well as
the suspension or revocation of licences and the imposition of
regulatory sanctions. Any of these events could have a material
adverse impact on the Group’s operations, financial performance,
overall financial position and future development.
It should also be noted that the regulatory framework governing
operational and industrial safety in Kazakhstan is still evolving. In
addition, due to ongoing changes in environmental legislation, there
remains a risk that the Group may not always be able to maintain full
compliance with all applicable regulatory requirements. At the same
time, the Group continuously monitors changes in applicable
legislation and regulatory requirements in order to ensure that its
activities remain aligned with current safety and environmental
standards.
Risk management: The Group’s QHSE policies are regularly reviewed
and updated to ensure alignment with evolving legal requirements
and industry standards. Employees receive periodic training on these
policies and applicable regulations to maintain a high level of
awareness and compliance.
Operations are conducted in accordance with five core QHSE pillars:
HSE leadership, comprehensive incident investigation, identification
and maintenance of safety-critical elements, effective contractor HSE
management, and environmental and climate change management.
QHSE performance is monitored through regular reporting across the
organisation.
Employees and contractors are encouraged to report unsafe
situations or conditions through established internal mechanisms,
supporting early identification of potential risks. All incidents are
investigated to determine root causes, with corrective actions
subsequently defined and implemented.
Equipment is classified as critical or non-critical, with safety-critical
elements designed to maintain safe operating conditions and prevent
failures, including automatic shut-in devices that isolate wells and
prevent uncontrolled releases.
23 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
scope of future development activity remain under review. In April
2025, the Ministry of Energy of the Republic of Kazakhstan approved a
phased full-field development plan extending to 2044; however, the
Group’s current strategic review may result in proposed amendments
to that development concept. Subject to the review, the first
production well, Wtp-102, is currently planned to be drilled in H2
2026, and is expected to include an extended testing programme to
support confirmation or refinement of the proposed development
concept.
Also, the Group has several additional area-wide opportunities under
review that may serve to strengthen the Group’s upstream and
midstream portfolio in the coming years.
Operational risks
Oil and gas reserves and production
Reserve and resource estimates are inherently uncertain and depend
on a number of assumptions, including reservoir performance,
interpretation of geological and geophysical data, recovery rates,
future commodity prices, operating and development costs and the
commercial viability of production. These assumptions may differ
materially from actual outcomes, resulting in revisions to reserves,
production forecasts and expected cash flows.
The Group has previously experienced significant reclassifications of
reserves, including the transfer of volumes from 2P reserves to
contingent resources in 2020 –2021 (Chinarevskoye reservoir),
reflecting the crystallisation of such uncertainties. There is a risk that
further revisions may occur in the future.
Appraisal, development and production activities involve operational
and subsurface uncertainties and may not deliver the expected
outcomes, particularly in mature fields. The natural decline of the
Chinarevskoye reservoir, combined with increasing water cut, further
contributes to variability in future production levels.
Similar uncertainty also applies to the Stepnoy Leopard fields.
Although an independent third-party reserves evaluation has
previously been obtained, reserve estimates may change as additional
drilling results, testing data and technical analysis become available.
These factors may adversely affect the Group’s production profile,
financial performance, reserves base and ability to achieve its
strategic objectives.
Risk management: The Group has a department of geologists and
reservoir engineers who perform periodic assessments of its oil and
gas reserves in accordance with international standards on reserve
estimations and prepare production forecasting using advanced
exploration risk and resource assessment systems. For drilling and
well workover activities, the Group engages skilled personnel and
leading service suppliers, as well as employing internationally
accredited operations and cost monitoring systems, based on which
management oversees the work progress. The Group continued its
well workover and intervention programme in 2025 to minimise the
production decline and in 2026, the Group will reevaluate the
requirement and necessity of the drilling and well intervention
campaigns. Maintenance of wells and surface facilities is scheduled in
advance, in accordance with technical requirements, and all necessary
preparations are performed in a timely manner ensuring a high
quality of work. In addition, the Group has emergency response and
disaster recovery plans in place and periodically conducts necessary
training and testing procedures.
Cybersecurity risks
The Group may be vulnerable to the unauthorised or inappropriate
access to data, or the unlawful use, disclosure, disruption, deletion,
corruption, modification, inspection, recording, or devaluation of
information. Such cybersecurity failures may significantly adversely
affect the Group’s operations and financial results through
disruptions, shutdowns and delays in production and other activities.
Risk management: The Group uses Microsoft security solutions and
related monitoring tools to protect its data and systems, monitor
security and compliance, and identify areas where controls may be
enhanced..
At the start of employment each new employee is briefed on the
Group’s Information Security Policy and signs a confidentiality
agreement. All mailboxes and data are placed on Microsoft servers
with appropriate levels of protection. Passwords have complexity
requirement and double authorisation has been introduced for most
users. All data traffic, servers and computers are subject to scanning
and protection by anti-virus software. Physical access to data storage
is restricted to authorised personnel.
Environmental, Social and Governance risks
Risks of incidents, including risk of explosion
The Group’s activities involve a range of risks and hazards typical of
the oil and gas industry. These include, among other things, the
possibility of encountering unexpected geological formations or
abnormal reservoir pressures, fires or explosions, interruptions in
power supply, equipment malfunctions or operational accidents, early
depletion of reservoirs, well blowouts, uncontrolled releases of oil, gas
or well fluids, increasing water cut, environmental contamination and
other related environmental risks.
If such hazards are not effectively prevented or properly controlled,
they may result in a variety of consequences, including injuries to
employees or nearby communities, partial or complete suspension of
operations, significant damage to facilities and equipment, as well as
the suspension or revocation of licences and the imposition of
regulatory sanctions. Any of these events could have a material
adverse impact on the Group’s operations, financial performance,
overall financial position and future development.
It should also be noted that the regulatory framework governing
operational and industrial safety in Kazakhstan is still evolving. In
addition, due to ongoing changes in environmental legislation, there
remains a risk that the Group may not always be able to maintain full
compliance with all applicable regulatory requirements. At the same
time, the Group continuously monitors changes in applicable
legislation and regulatory requirements in order to ensure that its
activities remain aligned with current safety and environmental
standards.
Risk management: The Group’s QHSE policies are regularly reviewed
and updated to ensure alignment with evolving legal requirements
and industry standards. Employees receive periodic training on these
policies and applicable regulations to maintain a high level of
awareness and compliance.
Operations are conducted in accordance with five core QHSE pillars:
HSE leadership, comprehensive incident investigation, identification
and maintenance of safety-critical elements, effective contractor HSE
management, and environmental and climate change management.
QHSE performance is monitored through regular reporting across the
organisation.
Employees and contractors are encouraged to report unsafe
situations or conditions through established internal mechanisms,
supporting early identification of potential risks. All incidents are
investigated to determine root causes, with corrective actions
subsequently defined and implemented.
Equipment is classified as critical or non-critical, with safety-critical
elements designed to maintain safe operating conditions and prevent
failures, including automatic shut-in devices that isolate wells and
prevent uncontrolled releases.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
24
STRATEGIC REPORT
Contractor HSE performance is managed through defined
requirements, monitoring, audits and regular reporting, with results
considered in contractor evaluation and selection.
The Group implements an annual programme of planned
maintenance in accordance with regulatory requirements and internal
standards. This includes periodic inspection, testing and maintenance
of key equipment, pipelines and facilities to ensure their integrity and
safe operation. In addition, regular technical inspections and risk-
based assessments are performed to identify potential equipment
degradation at an early stage and to prioritise maintenance and
remediation activities.
Governance risks
Nostrum adheres to UK corporate governance and reporting
requirements. Governance risk factors are usually related to board
composition and structure, executive remuneration, internal controls
and risk management framework, corporate policies and procedures,
risks of corruption and bribery, and others. Lack of adequate controls
and policies, or a failure of those to operate effectively, could lead to
loss of company resources, non-compliance with regulations, and
corresponding fines, penalties and reputational damage.
Risk management: As described elsewhere in this Annual Report, the
Group has established a governance framework covering its principal
activities through the Board, its committees and functional teams
under senior management. Although Nostrum generally seeks to
comply with the ‘comply or explain’ provisions of the UK Corporate
Governance Code, during the reporting period the composition of the
Board and certain committees did not comply with all provisions of
the Code. See the Corporate Governance section for further detail.
Please see pages 63-97.
Nostrum’s corporate governance framework is supported by an
extensive range of policies and procedures covering numerous areas
including delegation of authority, inside information disclosure,
related party transactions, anticorruption and bribery, anti-facilitation
of tax evasion and whistle-blowing, as described on page 72 and
various other policies and practices related to social and
environmental matters described across other sections of the report.
Such policies and procedures are designed and implemented to
ensure that all required compliance obligations are met.
Environmental risks
i) Emissions, effluents, and waste management risks
The Group’s operations are subject to environmental risks inherent in
oil and gas exploration and production industries. Examples of
environmental risks include risks stemming from more intense
extreme weather events, rising energy intensity in the oil and gas
industry, the changing regulatory landscape, the risk of fugitive
emissions and climate change policies driving down demand.
Compliance with environmental regulations may make it necessary
for the Group, at substantial cost, to undertake measures in
connection with the storage, handling, transportation, treatment or
disposal of hazardous materials and waste and the remediation of
contamination. In addition, the legal framework for environmental
protection and operational safety is not yet fully developed in
Kazakhstan. Stricter environmental requirements may be adopted in
the near future, and the environmental authorities may move
towards a stricter interpretation of existing legislation. The costs
associated with compliance with such regulations could have a
material adverse effect on the Group’s business, results of operations,
financial condition and prospects.
Risk management: Nostrum actively manages emissions, effluents,
and waste-related risks through related policies, targeted initiatives,
and established governance framework. Oversight is provided by the
CEO through the HSE committee, with regular reporting to the Board.
GHG emissions management is one of the KPIs, with efforts focused
on improving energy efficiency, minimising flaring and leaks, and
monitoring emissions. The Group reports Scope 1, 2, and
disaggregated Scope 3 emissions for transparency. Key initiatives
include energy efficiency improvements, waste management, GHG
emissions, renewable energy integration, methane mitigation, and an
oil spill response plan. The Sulphur recovery unit reduces harmful
emissions turning waste into a saleable by-product. Environmental
management is further strengthened by emergency response plans,
an energy policy, and strict permit compliance. Nostrum annually
reports to the CDP Climate Questionnaire, and earned a score of “B”
in December 2025, demonstrating its commitment to environmental
responsibility.
ii) Water source management risks
As an oil and gas exploration and production company, the Group
requires significant water use, with activities like hydraulic fracturing
and enhanced hydrocarbon recovery permanently removing water
from the cycle. Growing water scarcity, climate change, and
competing demands increase risks, potentially leading to business
disruptions, regulatory restrictions, and higher costs. Companies must
adopt best practices such as water recycling, alternative sourcing, and
treatment technologies to enhance sustainability, compliance, and
resilience.
Risk management: Nostrum takes a proactive approach to managing
water-related risks, ensuring sustainable water use and compliance
with regulations through a structured environmental and water
stewardship framework. The company has a well established Health
Safety and Environment Policy that emphasises stakeholder
engagement, raising environmental awareness, and continuous
improvement through an Environmental Management System. Water
management is a key focus, with a dedicated Water Management
Policy in place. Effluent management is regularly monitored, with
initiatives aimed at reducing, reusing, and recycling wastewater. Any
incidents are thoroughly investigated, and corrective measures are
implemented as needed. Responsibility for managing water-related
risks is assigned at both the senior management and executive levels,
reinforcing the company’s commitment to responsible water
management and ensuring that risk assessment outcomes are
integrated into business strategy. The company recognises the
physical, regulatory, and reputational risks linked to water use and
takes them into account when making strategic decisions. Nostrum
also participates in the annual CDP Water questionnaire and received
a B score in December2025, reflecting strong environmental
management. Key initiatives include assessing the quality of injection
water, improving water treatment processes, and maintaining
Emergency Response Plans to mitigate potential risks.
iii) Climate-related risks
Nostrum faces climate-related transition and physical risks, including
regulatory, technological, market, and reputational challenges.
Stricter emissions regulations, carbon pricing, and evolving policies
may increase costs and compliance burdens, impacting
competitiveness and financing. Technological shifts require high
investment, with risks of stranded assets, while reputational pressures
could affect stakeholder trust. Kazakhstan’s carbon market seeks to
systematically transition businesses to low-carbon technologies by
gradually reducing free GHG emission quotas and advancing the
emissions trading system. Kazakhstan aims to achieve carbon
neutrality by 2060 and acknowledges the importance of transitioning
from fossil fuels to alternative fuels and energy sources. However,
significant uncertainty remains regarding the rate of quota reductions,
carbon pricing, and other regulatory mechanisms, making it
challenging to establish reliable assumptions for project planning and
investment decisions. Additionally, acute and chronic physical risks
STRATEGIC REPORT
Contractor HSE performance is managed through defined
requirements, monitoring, audits and regular reporting, with results
considered in contractor evaluation and selection.
The Group implements an annual programme of planned
maintenance in accordance with regulatory requirements and internal
standards. This includes periodic inspection, testing and maintenance
of key equipment, pipelines and facilities to ensure their integrity and
safe operation. In addition, regular technical inspections and risk-
based assessments are performed to identify potential equipment
degradation at an early stage and to prioritise maintenance and
remediation activities.
Governance risks
Nostrum adheres to UK corporate governance and reporting
requirements. Governance risk factors are usually related to board
composition and structure, executive remuneration, internal controls
and risk management framework, corporate policies and procedures,
risks of corruption and bribery, and others. Lack of adequate controls
and policies, or a failure of those to operate effectively, could lead to
loss of company resources, non-compliance with regulations, and
corresponding fines, penalties and reputational damage.
Risk management: As described elsewhere in this Annual Report, the
Group has established a governance framework covering its principal
activities through the Board, its committees and functional teams
under senior management. Although Nostrum generally seeks to
comply with the ‘comply or explain’ provisions of the UK Corporate
Governance Code, during the reporting period the composition of the
Board and certain committees did not comply with all provisions of
the Code. See the Corporate Governance section for further detail.
Please see pages 63-97.
Nostrum’s corporate governance framework is supported by an
extensive range of policies and procedures covering numerous areas
including delegation of authority, inside information disclosure,
related party transactions, anticorruption and bribery, anti-facilitation
of tax evasion and whistle-blowing, as described on page 72 and
various other policies and practices related to social and
environmental matters described across other sections of the report.
Such policies and procedures are designed and implemented to
ensure that all required compliance obligations are met.
Environmental risks
i) Emissions, effluents, and waste management risks
The Group’s operations are subject to environmental risks inherent in
oil and gas exploration and production industries. Examples of
environmental risks include risks stemming from more intense
extreme weather events, rising energy intensity in the oil and gas
industry, the changing regulatory landscape, the risk of fugitive
emissions and climate change policies driving down demand.
Compliance with environmental regulations may make it necessary
for the Group, at substantial cost, to undertake measures in
connection with the storage, handling, transportation, treatment or
disposal of hazardous materials and waste and the remediation of
contamination. In addition, the legal framework for environmental
protection and operational safety is not yet fully developed in
Kazakhstan. Stricter environmental requirements may be adopted in
the near future, and the environmental authorities may move
towards a stricter interpretation of existing legislation. The costs
associated with compliance with such regulations could have a
material adverse effect on the Group’s business, results of operations,
financial condition and prospects.
Risk management: Nostrum actively manages emissions, effluents,
and waste-related risks through related policies, targeted initiatives,
and established governance framework. Oversight is provided by the
CEO through the HSE committee, with regular reporting to the Board.
GHG emissions management is one of the KPIs, with efforts focused
on improving energy efficiency, minimising flaring and leaks, and
monitoring emissions. The Group reports Scope 1, 2, and
disaggregated Scope 3 emissions for transparency. Key initiatives
include energy efficiency improvements, waste management, GHG
emissions, renewable energy integration, methane mitigation, and an
oil spill response plan. The Sulphur recovery unit reduces harmful
emissions turning waste into a saleable by-product. Environmental
management is further strengthened by emergency response plans,
an energy policy, and strict permit compliance. Nostrum annually
reports to the CDP Climate Questionnaire, and earned a score of “B”
in December 2025, demonstrating its commitment to environmental
responsibility.
ii) Water source management risks
As an oil and gas exploration and production company, the Group
requires significant water use, with activities like hydraulic fracturing
and enhanced hydrocarbon recovery permanently removing water
from the cycle. Growing water scarcity, climate change, and
competing demands increase risks, potentially leading to business
disruptions, regulatory restrictions, and higher costs. Companies must
adopt best practices such as water recycling, alternative sourcing, and
treatment technologies to enhance sustainability, compliance, and
resilience.
Risk management: Nostrum takes a proactive approach to managing
water-related risks, ensuring sustainable water use and compliance
with regulations through a structured environmental and water
stewardship framework. The company has a well established Health
Safety and Environment Policy that emphasises stakeholder
engagement, raising environmental awareness, and continuous
improvement through an Environmental Management System. Water
management is a key focus, with a dedicated Water Management
Policy in place. Effluent management is regularly monitored, with
initiatives aimed at reducing, reusing, and recycling wastewater. Any
incidents are thoroughly investigated, and corrective measures are
implemented as needed. Responsibility for managing water-related
risks is assigned at both the senior management and executive levels,
reinforcing the company’s commitment to responsible water
management and ensuring that risk assessment outcomes are
integrated into business strategy. The company recognises the
physical, regulatory, and reputational risks linked to water use and
takes them into account when making strategic decisions. Nostrum
also participates in the annual CDP Water questionnaire and received
a B score in December2025, reflecting strong environmental
management. Key initiatives include assessing the quality of injection
water, improving water treatment processes, and maintaining
Emergency Response Plans to mitigate potential risks.
iii) Climate-related risks
Nostrum faces climate-related transition and physical risks, including
regulatory, technological, market, and reputational challenges.
Stricter emissions regulations, carbon pricing, and evolving policies
may increase costs and compliance burdens, impacting
competitiveness and financing. Technological shifts require high
investment, with risks of stranded assets, while reputational pressures
could affect stakeholder trust. Kazakhstan’s carbon market seeks to
systematically transition businesses to low-carbon technologies by
gradually reducing free GHG emission quotas and advancing the
emissions trading system. Kazakhstan aims to achieve carbon
neutrality by 2060 and acknowledges the importance of transitioning
from fossil fuels to alternative fuels and energy sources. However,
significant uncertainty remains regarding the rate of quota reductions,
carbon pricing, and other regulatory mechanisms, making it
challenging to establish reliable assumptions for project planning and
investment decisions. Additionally, acute and chronic physical risks
PRINCIPAL RISKS AND UNCERTAINTIES
25 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
such as floods, extreme temperatures, and severe weather may
disrupt operations, damage infrastructure, and raise costs. Failure to
adapt could lead to financial penalties, operational constraints, and
reduced long-term viability.
Risk management: Nostrum manages climate risks through strategic
planning, compliance, and operational resilience. To address physical
risks, the Group integrates climate considerations into risk
assessments and strengthens emergency response measures. For
policy and legal risks, it ensures compliance through regular
monitoring and legal oversight. To mitigate market risks, Nostrum
diversifies into gas processing and optimises operations for efficiency.
For technology risks, it invests in digitalisation, automation, and
emission management. To manage reputational risks, the Group
maintains transparent climate disclosures and engages with
stakeholders to align with regulatory and social expectations. For a
more detailed description of the climate-related risks and the Group’s
strategy in this regard, please see the Climate-related Financial
Disclosures section of this Annual Report.
iv) Land use and biodiversity impact risks
Nostrum’s operations have the potential to impact biodiversity
through land use and infrastructure development, as is typical for the
oil and gas industry. However, the physical footprint of operations
remains relatively limited, with well sites and associated infrastructure
dispersed over large areas.
As a result, much of the surrounding land remains largely undisturbed,
and restricted access to operational areas may contribute to the
preservation of local ecosystems and wildlife habitats. Nevertheless,
there remains a risk that operational activities, including infrastructure
development and handling of materials, could affect biodiversity if not
appropriately managed, potentially leading to regulatory,
reputational, or financial implications.
Risk management: Nostrum maintains a framework of environmental
and HSE-related policies that set general principles for responsible
land use and environmental protection. Biodiversity considerations
are addressed as part of broader environmental and operational
practices.
Given the relatively low density of infrastructure and limited access to
operational areas, the overall disturbance to surrounding ecosystems
is currently considered to be localised. In some areas, restricted access
may contribute to the preservation of natural habitats.
The Company continues to monitor environmental aspects of its
operations and remains committed to complying with applicable
environmental regulations and standards. Where relevant, site
restoration and rehabilitation activities are undertaken following
operational use.
Compliance risks
Subsoil use agreements
As the Group performs exploration, development and production
activities in accordance with related licences for the oil and gas fields,
there are related risks that the Group might not be able to obtain
extensions or agree amendments to the field development plan,
when necessary, risks of non-compliance with the licence
requirements owing to ambiguities, risks of alteration of the licence
terms by the authorities and others. These risks may result in the
Group’s inability to fulfil scheduled activities; fines, penalties,
suspension or termination of licences by authorities; and, respectively,
significant and adverse impact on the Group’s business, financial
performance and prospects.
Risk management: The Group has procedures and processes in place
for the timely application for extension of licence periods or for
amendments to field development plans, when it is considered
appropriate. However, uncertainty remains in relation to timing and
results of decisions of authorities. The Group maintains an open
dialogue with RoK governmental authorities regarding its subsoil use
agreement. The Group is in material compliance with such
agreements but in the event of non-compliance with an obligation
under such agreements, the Group endeavours to have such terms
modified or pays any penalties and fines that may apply.
Compliance with laws and regulations
The Group carries out its activities in a number of jurisdictions and,
therefore, must comply with a range of laws and regulations, which
exposes the Group to the respective risks of non-compliance. In
addition, the Group must comply with the Listing Rules, the Disclosure
Guidance and Transparency Rules, FRC guidance and requirements, as
well as requirements in connection with its restructured debt, in light
of its publicly traded shares and notes. Hence, there are non-
compliance risks, including reputational, litigation and government
sanction risks, to which the Group is exposed. The impact of these
risks may vary in magnitude and include regulatory actions, fines and
penalties by authorities, diversion of management time, and may
have an overall adverse effect on the Group’s performance and
activities towards achieving its strategic objectives.
Risk management: For the purpose of effective corporate governance
and compliance with laws, regulations and rules, the Group has
adopted a number of policies and procedures, as mentioned above.
The Group also performs periodic updates based on the changes in
regulatory requirements and carries out related communications and
training for employees. Necessary communication lines are
established with authorities to ensure timely and adequate inbound
and outbound flow of information. Management and the Board
monitor significant matters related to legal and compliance matters in
order to act promptly in response to any actions. In addition,
management maintains an open dialogue with its sponsors in relation
to any matter related to non-compliance with Listing Rules and other
regulatory requirements.
Financial risks
Liquidity risks
Maintaining an adequate liquidity position depends on forecasting
based on assumptions and information that may prove inaccurate, as
well as on counterparties meeting their contractual obligations.
Moreover, the Group’s current and planned expenditures are subject
to unexpected problems, costs and delays, and the economic results
and actual costs may differ significantly from the Group’s current
estimates. Prices for the materials and services the Group depends on
to conduct and expand its business may increase to levels that no
longer enable the Group to operate profitably. All the above factors in
combination with a significant negative movement in world energy
prices could result in the Group’s liquidity position becoming more
strained than the severe but plausible downside scenario in the Going
Concern assessment.
Risk management: Management and the Board constantly monitor
the Group’s actual and forecast liquidity position to ensure that
sufficient funds are available to meet any commitments as they arise.
In addition, management and the Board assess key financial ratios,
sensitivity tests of its liquidity position for changes in crude oil price,
production volumes and timing of completion of various ongoing
projects, to understand the resilience of the business and to be
prepared for taking necessary remedies. Further efforts are made on
cost optimisation to reduce capital expenditures, operating costs and
general and administration costs.
25 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
such as floods, extreme temperatures, and severe weather may
disrupt operations, damage infrastructure, and raise costs. Failure to
adapt could lead to financial penalties, operational constraints, and
reduced long-term viability.
Risk management: Nostrum manages climate risks through strategic
planning, compliance, and operational resilience. To address physical
risks, the Group integrates climate considerations into risk
assessments and strengthens emergency response measures. For
policy and legal risks, it ensures compliance through regular
monitoring and legal oversight. To mitigate market risks, Nostrum
diversifies into gas processing and optimises operations for efficiency.
For technology risks, it invests in digitalisation, automation, and
emission management. To manage reputational risks, the Group
maintains transparent climate disclosures and engages with
stakeholders to align with regulatory and social expectations. For a
more detailed description of the climate-related risks and the Group’s
strategy in this regard, please see the Climate-related Financial
Disclosures section of this Annual Report.
iv) Land use and biodiversity impact risks
Nostrum’s operations have the potential to impact biodiversity
through land use and infrastructure development, as is typical for the
oil and gas industry. However, the physical footprint of operations
remains relatively limited, with well sites and associated infrastructure
dispersed over large areas.
As a result, much of the surrounding land remains largely undisturbed,
and restricted access to operational areas may contribute to the
preservation of local ecosystems and wildlife habitats. Nevertheless,
there remains a risk that operational activities, including infrastructure
development and handling of materials, could affect biodiversity if not
appropriately managed, potentially leading to regulatory,
reputational, or financial implications.
Risk management: Nostrum maintains a framework of environmental
and HSE-related policies that set general principles for responsible
land use and environmental protection. Biodiversity considerations
are addressed as part of broader environmental and operational
practices.
Given the relatively low density of infrastructure and limited access to
operational areas, the overall disturbance to surrounding ecosystems
is currently considered to be localised. In some areas, restricted access
may contribute to the preservation of natural habitats.
The Company continues to monitor environmental aspects of its
operations and remains committed to complying with applicable
environmental regulations and standards. Where relevant, site
restoration and rehabilitation activities are undertaken following
operational use.
Compliance risks
Subsoil use agreements
As the Group performs exploration, development and production
activities in accordance with related licences for the oil and gas fields,
there are related risks that the Group might not be able to obtain
extensions or agree amendments to the field development plan,
when necessary, risks of non-compliance with the licence
requirements owing to ambiguities, risks of alteration of the licence
terms by the authorities and others. These risks may result in the
Group’s inability to fulfil scheduled activities; fines, penalties,
suspension or termination of licences by authorities; and, respectively,
significant and adverse impact on the Group’s business, financial
performance and prospects.
Risk management: The Group has procedures and processes in place
for the timely application for extension of licence periods or for
amendments to field development plans, when it is considered
appropriate. However, uncertainty remains in relation to timing and
results of decisions of authorities. The Group maintains an open
dialogue with RoK governmental authorities regarding its subsoil use
agreement. The Group is in material compliance with such
agreements but in the event of non-compliance with an obligation
under such agreements, the Group endeavours to have such terms
modified or pays any penalties and fines that may apply.
Compliance with laws and regulations
The Group carries out its activities in a number of jurisdictions and,
therefore, must comply with a range of laws and regulations, which
exposes the Group to the respective risks of non-compliance. In
addition, the Group must comply with the Listing Rules, the Disclosure
Guidance and Transparency Rules, FRC guidance and requirements, as
well as requirements in connection with its restructured debt, in light
of its publicly traded shares and notes. Hence, there are non-
compliance risks, including reputational, litigation and government
sanction risks, to which the Group is exposed. The impact of these
risks may vary in magnitude and include regulatory actions, fines and
penalties by authorities, diversion of management time, and may
have an overall adverse effect on the Group’s performance and
activities towards achieving its strategic objectives.
Risk management: For the purpose of effective corporate governance
and compliance with laws, regulations and rules, the Group has
adopted a number of policies and procedures, as mentioned above.
The Group also performs periodic updates based on the changes in
regulatory requirements and carries out related communications and
training for employees. Necessary communication lines are
established with authorities to ensure timely and adequate inbound
and outbound flow of information. Management and the Board
monitor significant matters related to legal and compliance matters in
order to act promptly in response to any actions. In addition,
management maintains an open dialogue with its sponsors in relation
to any matter related to non-compliance with Listing Rules and other
regulatory requirements.
Financial risks
Liquidity risks
Maintaining an adequate liquidity position depends on forecasting
based on assumptions and information that may prove inaccurate, as
well as on counterparties meeting their contractual obligations.
Moreover, the Group’s current and planned expenditures are subject
to unexpected problems, costs and delays, and the economic results
and actual costs may differ significantly from the Group’s current
estimates. Prices for the materials and services the Group depends on
to conduct and expand its business may increase to levels that no
longer enable the Group to operate profitably. All the above factors in
combination with a significant negative movement in world energy
prices could result in the Group’s liquidity position becoming more
strained than the severe but plausible downside scenario in the Going
Concern assessment.
Risk management: Management and the Board constantly monitor
the Group’s actual and forecast liquidity position to ensure that
sufficient funds are available to meet any commitments as they arise.
In addition, management and the Board assess key financial ratios,
sensitivity tests of its liquidity position for changes in crude oil price,
production volumes and timing of completion of various ongoing
projects, to understand the resilience of the business and to be
prepared for taking necessary remedies. Further efforts are made on
cost optimisation to reduce capital expenditures, operating costs and
general and administration costs.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
26
STRATEGIC REPORT
Refinancing risks
The Group’s Notes will mature in June 2026 and there is a risk that the
Group may not complete the proposed extension or any alternative
refinancing on acceptable terms, or at all, before that date.
In addition, during 2025, certain administrative and regulatory
constraints have resulted in delays in the settlement of interest
payments on the Notes. While no event of default has arisen, such
delays contribute to uncertainty in the management of the Group’s
financial obligations.
Failure to successfully refinance its debt or resolve such constraints
could adversely affect the Group’s liquidity position, financial stability
and ability to meet its obligations as they fall due.
Risk management: The Group is actively pursuing the proposed bond
maturity extension and continues to engage with noteholders,
advisers and relevant authorities in relation to its SSNs and SUNs.
In parallel, the Group is working to resolve administrative and
regulatory matters affecting payment processes, including obtaining
the necessary approvals and licences to enable settlement of
outstanding obligations.
The Board notes that uncertainty remains related to the Group’s
ability to repay/ meet its liabilities, including the repayment of its
Notes due in 2026 and the risk that the Group may require refinancing
by the bond maturity date. Relevant considerations were made as
part of the viability assessment as described on pages 27-28.
Tax risks and uncertainties
Uncertainty in the application, including retroactive application, of tax
laws, together with the evolution of tax laws in Kazakhstan, creates
risks relating to additional tax liabilities and the recoverability of tax
assets. Kazakhstan’s tax legislation and regulations are subject to
ongoing changes and varying interpretations. Instances of inconsistent
opinions between local, regional, and national tax authorities are not
unusual. The current regime of penalties and interest related to
reported and discovered violations of Kazakhstan’s tax laws are severe
and where the tax authorities disagree with the positions taken by the
Group the financial outcomes could be material. Fiscal periods remain
open to review by tax authorities for five calendar years preceding the
year of review. Under certain circumstances reviews may cover longer
periods. Tax risks and uncertainties may adversely affect the Group’s
profitability, liquidity and planned growth.
The Group is currently involved in ongoing discussions and disputes
with the tax authorities regarding certain tax positions, including the
application of withholding tax rules and treaty benefits. Differences in
interpretation may result in material financial exposures if resolved
unfavourably.
Tax risks and uncertainties could adversely affect the Group’s financial
position, liquidity and future performance.
Risk management: The Group has policies and procedures related to
various tax assessments and positions, supported by internal controls
to ensure the timely assessment and filing of tax returns, settlement
of tax obligations and recovery of tax assets. Tax positions are
reviewed on a regular basis, including in areas requiring judgement or
interpretation, with involvement of internal specialists and, where
appropriate, external advisors.
The Group regularly challenges tax assessments that it considers
inapplicable, either through engagement with the tax authorities of
the Republic of Kazakhstan or via the court system, in accordance with
applicable legislation and the terms of its subsoil use agreements.
Management monitors developments in tax legislation and
administrative practice and assesses potential exposures on an
ongoing basis.
In relation to the ongoing withholding tax claims for 2018-2020, the
Group is actively pursuing available legal and treaty-based remedies.
Following the rejection of its administrative appeal, the Group is
proceeding with appeals through the courts of the Republic of
Kazakhstan.
In parallel, the Group has initiated procedures under the applicable
double taxation treaty, including engagement with the competent
authorities, with the aim of resolving the matter and avoiding double
taxation.
Other risks
Other significant risks, including emerging risks
Other risks are those that are not specifically identified within any of
the principal risks and uncertainties but may be related to several
such areas or be organisation wide. These include risks related to:
• fraudulent activities;
• the Group’s supply chains;
• accounting and reporting management systems; or
• the availability of human resources.
They may also significantly impact the Group’s financial performance,
reputation and achievement of its strategic objectives.
Risk management: The Group has an Anti-Bribery and Corruption
Policy, and provisions relating to the same are also included in the
Group’s Code of Conduct. Related training and updates are
periodically provided for employees in relation to their obligations in
this area. The Group has a wide range of internal controls over its
supply chains and accounting and reporting processes, including
policies, procedures, segregation of duties for authorisation of
matters, periodic training for employees. The Contracts Board was
established to meet weekly to review and approve the placement of
contracts or expenditures.
During 2025, the Group enhanced and further formalised its approach
to fraud risk management, with the Security function supporting the
identification and initial assessment of potential issues and Internal
Audit involved, where appropriate, in reviewing such matters and
monitoring corrective actions.
Senior management and the Board stay alert to emerging challenges
related to various management systems and related governance
matters and, when necessary, initiate change initiatives to ensure
enhancement and integration of certain management systems.
STRATEGIC REPORT
Refinancing risks
The Group’s Notes will mature in June 2026 and there is a risk that the
Group may not complete the proposed extension or any alternative
refinancing on acceptable terms, or at all, before that date.
In addition, during 2025, certain administrative and regulatory
constraints have resulted in delays in the settlement of interest
payments on the Notes. While no event of default has arisen, such
delays contribute to uncertainty in the management of the Group’s
financial obligations.
Failure to successfully refinance its debt or resolve such constraints
could adversely affect the Group’s liquidity position, financial stability
and ability to meet its obligations as they fall due.
Risk management: The Group is actively pursuing the proposed bond
maturity extension and continues to engage with noteholders,
advisers and relevant authorities in relation to its SSNs and SUNs.
In parallel, the Group is working to resolve administrative and
regulatory matters affecting payment processes, including obtaining
the necessary approvals and licences to enable settlement of
outstanding obligations.
The Board notes that uncertainty remains related to the Group’s
ability to repay/ meet its liabilities, including the repayment of its
Notes due in 2026 and the risk that the Group may require refinancing
by the bond maturity date. Relevant considerations were made as
part of the viability assessment as described on pages 27-28.
Tax risks and uncertainties
Uncertainty in the application, including retroactive application, of tax
laws, together with the evolution of tax laws in Kazakhstan, creates
risks relating to additional tax liabilities and the recoverability of tax
assets. Kazakhstan’s tax legislation and regulations are subject to
ongoing changes and varying interpretations. Instances of inconsistent
opinions between local, regional, and national tax authorities are not
unusual. The current regime of penalties and interest related to
reported and discovered violations of Kazakhstan’s tax laws are severe
and where the tax authorities disagree with the positions taken by the
Group the financial outcomes could be material. Fiscal periods remain
open to review by tax authorities for five calendar years preceding the
year of review. Under certain circumstances reviews may cover longer
periods. Tax risks and uncertainties may adversely affect the Group’s
profitability, liquidity and planned growth.
The Group is currently involved in ongoing discussions and disputes
with the tax authorities regarding certain tax positions, including the
application of withholding tax rules and treaty benefits. Differences in
interpretation may result in material financial exposures if resolved
unfavourably.
Tax risks and uncertainties could adversely affect the Group’s financial
position, liquidity and future performance.
Risk management: The Group has policies and procedures related to
various tax assessments and positions, supported by internal controls
to ensure the timely assessment and filing of tax returns, settlement
of tax obligations and recovery of tax assets. Tax positions are
reviewed on a regular basis, including in areas requiring judgement or
interpretation, with involvement of internal specialists and, where
appropriate, external advisors.
The Group regularly challenges tax assessments that it considers
inapplicable, either through engagement with the tax authorities of
the Republic of Kazakhstan or via the court system, in accordance with
applicable legislation and the terms of its subsoil use agreements.
Management monitors developments in tax legislation and
administrative practice and assesses potential exposures on an
ongoing basis.
In relation to the ongoing withholding tax claims for 2018-2020, the
Group is actively pursuing available legal and treaty-based remedies.
Following the rejection of its administrative appeal, the Group is
proceeding with appeals through the courts of the Republic of
Kazakhstan.
In parallel, the Group has initiated procedures under the applicable
double taxation treaty, including engagement with the competent
authorities, with the aim of resolving the matter and avoiding double
taxation.
Other risks
Other significant risks, including emerging risks
Other risks are those that are not specifically identified within any of
the principal risks and uncertainties but may be related to several
such areas or be organisation wide. These include risks related to:
• fraudulent activities;
• the Group’s supply chains;
• accounting and reporting management systems; or
• the availability of human resources.
They may also significantly impact the Group’s financial performance,
reputation and achievement of its strategic objectives.
Risk management: The Group has an Anti-Bribery and Corruption
Policy, and provisions relating to the same are also included in the
Group’s Code of Conduct. Related training and updates are
periodically provided for employees in relation to their obligations in
this area. The Group has a wide range of internal controls over its
supply chains and accounting and reporting processes, including
policies, procedures, segregation of duties for authorisation of
matters, periodic training for employees. The Contracts Board was
established to meet weekly to review and approve the placement of
contracts or expenditures.
During 2025, the Group enhanced and further formalised its approach
to fraud risk management, with the Security function supporting the
identification and initial assessment of potential issues and Internal
Audit involved, where appropriate, in reviewing such matters and
monitoring corrective actions.
Senior management and the Board stay alert to emerging challenges
related to various management systems and related governance
matters and, when necessary, initiate change initiatives to ensure
enhancement and integration of certain management systems.
27
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
VIABILITY STATEMENT
The Group’s prospects over the future medium-term were assessed
by the Directors in accordance with provision 31 of the UK Corporate
Governance Code 2024. The viability assessment is performed by
stress-testing a medium-term financial model to the principal risks
and uncertainties (described on pages 22 –26) and their combinations.
The key features of the financial model reflect the following elements
of the Group’s corporate planning and modelling process:
• Medium-term development planning based on three-to-four-year
financial projections, using management’s internal estimate of
forecast production from the Chinarevskoye field, processing
hydrocarbons from Ural O&G and a development case for the Stepnoy
Leopard fields based on management’s current planning assumptions.
No other third-party volumes or strategic initiative projects have been
included in the viability assessment as there is currently no certainty
that they will arrive within the assessment period; and
• Annual budgeting and forecasting process incorporating preparation
of an annual budget for the following year, which is reviewed and
approved by the Board, and followed up with quarterly forecasts,
which are monitored by senior management and the Board.
Viability time horizon
Considering the uncertainties inherent to the Group’s operations as
well as the medium-term development planning mentioned above,
the Board concluded that a viability assessment over a three-year
period to 30 June 2029 provides a robust and realistic evaluation of
the Group’s future performance.
With this approach the Board continues to believe that the
assessment:
• maintains an optimal balance between a reasonable degree of
confidence and an appropriate longer-term outlook;
• is aligned with medium-term development planning mentioned
above;
• is consistent with other current and/or recent communications (e.g.
production forecasts etc.); and
• is appropriate current stage of development of the Group and allows
reasonable assessment of sensitivity to principal risks during the
period in which the Group is seeking to implement its major strategic
objectives (described on page 8).
Viability assessment
The three-year financial model used as a base-case scenario for the
viability assessment assumed the following:
• Production forecasts reflecting management’s internal view of
Chinarevskoye production, which is broadly aligned with the proved
developed producing (PDP) reserves case and considered more
relevant given the medium-term nature of the assessment; ;
• Inclusion of throughput processing volumes from Ural O&G based on
management’s internal view, and
• Capital expenditures over 2026 –2028 in respect of the Stepnoy
Leopard fields, based on management’s current development
assumptions and including minimum licence commitment
expenditures;
• No additional utilization of the spare capacity of Gas Treatment
Facilities despite this remaining a key strategic focus for management
over the medium term; and
• Product price assumptions based on a Brent oil price of US$85/bbl for
the rest of 2026 and US$75/bbl for 2027 and onwards, which is
consistent with the most recent price forecasts.
For the purpose of sensitivity testing, several principal risks and
uncertainties were selected (from those described on pages 22 –26),
which were deemed to have the highest potential financial impact on
the Group’s future performance, taking into account prior period
assessments. The effect of those principal risks and uncertainties on
the base-case scenario were analyzed with the assumptions as
described below.
The Directors also considered severe but plausible scenarios in which
a combination of two or three of the risks shown in the table below
occur together.
The scenarios took into account the mitigating actions that might be
required if the Group was exposed in the medium- term to negative
impacts. Such mitigating actions are in place or could be implemented
to avoid or reduce the impact or occurrence of the underlying risks. In
considering the likely effectiveness of such actions, the conclusions of
the Board’s regular monitoring and review of risk and internal control
systems were taken into account.
Principal risk and uncertainty
The effect of the following principal risks and uncertainties on the
base-case scenario were analyzed with the relevant changes in the
assumptions.
Strategic risks – Deterioration in the business and market
environment and geopolitical risks. Sensitivity to 10% reduction in oil,
LPG and gas prices over the period of assessment.
Operational risks – Production issues from the field and/or
transportation issues along the sales routes. Sensitivity to 10%
reduction in forecast production and sales volumes over the period of
assessment
Liquidity risks – Cost pressures in the ordinary course of business
supply chain and with Group personnel. Sensitivity to 10% increase in
capital expenditures and operating cost over the period of assessment
Compliance risks – Unexpected and unbudgeted fines and penalties
for various non-compliance issues. Sensitivity to US$5m per annum
regulator fines and US$10m per annum legal claim over the period of
assessment.
Climate-related risks – Implementation of carbon emission taxes in
RoK. Sensitivity to US$10/mt of CO 2 tax rate in 2026 increasing by
US$5/mt annually.
Climate-related financial disclosure
As part of the viability assessment the Directors also performed
resilience analysis as per the requirements of the Task Force on
Climate-related Financial Disclosure (“TCFD”). TCFD requires the
Directors to describe the resilience of the organization’s strategy,
taking into consideration different climate-related scenarios, including
a 2°C or lower scenario.
The Directors chose the International Energy Agency’s Net Zero
Emissions by 2050 Scenario (“NZE Scenario”) as the reference point
for the resilience test and also took into account Kazakhstan’s Strategy
on Achieving Carbon Neutrality by 2060. NZE Scenario is aimed at an
emissions trajectory consistent with keeping the temperature rise in
2100 below 1.5 °C (with at least a 50% probability).
VIABILITY STATEMENT
The Group’s prospects over the future medium-term were assessed
by the Directors in accordance with provision 31 of the UK Corporate
Governance Code 2024. The viability assessment is performed by
stress-testing a medium-term financial model to the principal risks
and uncertainties (described on pages 22 –26) and their combinations.
The key features of the financial model reflect the following elements
of the Group’s corporate planning and modelling process:
• Medium-term development planning based on three-to-four-year
financial projections, using management’s internal estimate of
forecast production from the Chinarevskoye field, processing
hydrocarbons from Ural O&G and a development case for the Stepnoy
Leopard fields based on management’s current planning assumptions.
No other third-party volumes or strategic initiative projects have been
included in the viability assessment as there is currently no certainty
that they will arrive within the assessment period; and
• Annual budgeting and forecasting process incorporating preparation
of an annual budget for the following year, which is reviewed and
approved by the Board, and followed up with quarterly forecasts,
which are monitored by senior management and the Board.
Viability time horizon
Considering the uncertainties inherent to the Group’s operations as
well as the medium-term development planning mentioned above,
the Board concluded that a viability assessment over a three-year
period to 30 June 2029 provides a robust and realistic evaluation of
the Group’s future performance.
With this approach the Board continues to believe that the
assessment:
• maintains an optimal balance between a reasonable degree of
confidence and an appropriate longer-term outlook;
• is aligned with medium-term development planning mentioned
above;
• is consistent with other current and/or recent communications (e.g.
production forecasts etc.); and
• is appropriate current stage of development of the Group and allows
reasonable assessment of sensitivity to principal risks during the
period in which the Group is seeking to implement its major strategic
objectives (described on page 8).
Viability assessment
The three-year financial model used as a base-case scenario for the
viability assessment assumed the following:
• Production forecasts reflecting management’s internal view of
Chinarevskoye production, which is broadly aligned with the proved
developed producing (PDP) reserves case and considered more
relevant given the medium-term nature of the assessment; ;
• Inclusion of throughput processing volumes from Ural O&G based on
management’s internal view, and
• Capital expenditures over 2026 –2028 in respect of the Stepnoy
Leopard fields, based on management’s current development
assumptions and including minimum licence commitment
expenditures;
• No additional utilization of the spare capacity of Gas Treatment
Facilities despite this remaining a key strategic focus for management
over the medium term; and
• Product price assumptions based on a Brent oil price of US$85/bbl for
the rest of 2026 and US$75/bbl for 2027 and onwards, which is
consistent with the most recent price forecasts.
For the purpose of sensitivity testing, several principal risks and
uncertainties were selected (from those described on pages 22 –26),
which were deemed to have the highest potential financial impact on
the Group’s future performance, taking into account prior period
assessments. The effect of those principal risks and uncertainties on
the base-case scenario were analyzed with the assumptions as
described below.
The Directors also considered severe but plausible scenarios in which
a combination of two or three of the risks shown in the table below
occur together.
The scenarios took into account the mitigating actions that might be
required if the Group was exposed in the medium- term to negative
impacts. Such mitigating actions are in place or could be implemented
to avoid or reduce the impact or occurrence of the underlying risks. In
considering the likely effectiveness of such actions, the conclusions of
the Board’s regular monitoring and review of risk and internal control
systems were taken into account.
Principal risk and uncertainty
The effect of the following principal risks and uncertainties on the
base-case scenario were analyzed with the relevant changes in the
assumptions.
Strategic risks – Deterioration in the business and market
environment and geopolitical risks. Sensitivity to 10% reduction in oil,
LPG and gas prices over the period of assessment.
Operational risks – Production issues from the field and/or
transportation issues along the sales routes. Sensitivity to 10%
reduction in forecast production and sales volumes over the period of
assessment
Liquidity risks – Cost pressures in the ordinary course of business
supply chain and with Group personnel. Sensitivity to 10% increase in
capital expenditures and operating cost over the period of assessment
Compliance risks – Unexpected and unbudgeted fines and penalties
for various non-compliance issues. Sensitivity to US$5m per annum
regulator fines and US$10m per annum legal claim over the period of
assessment.
Climate-related risks – Implementation of carbon emission taxes in
RoK. Sensitivity to US$10/mt of CO 2 tax rate in 2026 increasing by
US$5/mt annually.
Climate-related financial disclosure
As part of the viability assessment the Directors also performed
resilience analysis as per the requirements of the Task Force on
Climate-related Financial Disclosure (“TCFD”). TCFD requires the
Directors to describe the resilience of the organization’s strategy,
taking into consideration different climate-related scenarios, including
a 2°C or lower scenario.
The Directors chose the International Energy Agency’s Net Zero
Emissions by 2050 Scenario (“NZE Scenario”) as the reference point
for the resilience test and also took into account Kazakhstan’s Strategy
on Achieving Carbon Neutrality by 2060. NZE Scenario is aimed at an
emissions trajectory consistent with keeping the temperature rise in
2100 below 1.5 °C (with at least a 50% probability).
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
28
STRATEGIC REPORT
Two key assumptions were taken from NZE Scenario for the purpose
of severe but plausible development scenario for stress-testing the
company’s resilience:
• oil prices projections decreasing to US$50 per barrel by 2031; and
• carbon price of US$90 per tonne of CO 2 from 2027 onwards. Please
refer to pages 22 –26 for further details.
The Group maintains sufficient cash reserves at the end of the viability
period when sensitizing the base case for the above climate-related
assumptions. Following the assessment, the Directors confirm the
future strategy and future viability remain resilient against the chosen
climate-related scenario.
Longer term viability
The Directors also considered the viability of the business beyond the
medium term. The Notes issued by the Group mature in June 2026
and, under the base-case scenario used in the viability assessment,
the Directors have assumed successful completion before 30 June
2026 of the proposed extension of the maturity date of the SSNs and
the SUNs to 31 December 2030 (refer to pages 56 –62).
Viability statement conclusion
Considering the above, the following conclusions can be drawn from
the viability assessment:
• The Group’s viability conclusion is not exposed to plausible downside
risks arising in isolation relating to the Group’s strategy, operations,
liquidity or compliance;
• In the event that a combination of three of the five plausible downside
scenarios were to arise together, the Group may require additional
funding to cover the capital expenditures required for development of
the Stepnoy Leopard fields;
• The Directors do not consider it plausible that four or five of the
assessed downside risks would arise together, given the mitigating
actions that would be expected to be taken by the Group if strategic,
operational or compliance risks were to materialise.
Based on these assessments and other matters considered by the
Board, the Directors have a reasonable expectation that the Group
will continue in operation and meet its liabilities as they fall due
throughout the three-year viability assessment period ending 30 June
2029, subject to successful completion of the proposed extension of
the maturity date of the SSNs and the SUNs to 31 December 2030.
STRATEGIC REPORT
Two key assumptions were taken from NZE Scenario for the purpose
of severe but plausible development scenario for stress-testing the
company’s resilience:
• oil prices projections decreasing to US$50 per barrel by 2031; and
• carbon price of US$90 per tonne of CO 2 from 2027 onwards. Please
refer to pages 22 –26 for further details.
The Group maintains sufficient cash reserves at the end of the viability
period when sensitizing the base case for the above climate-related
assumptions. Following the assessment, the Directors confirm the
future strategy and future viability remain resilient against the chosen
climate-related scenario.
Longer term viability
The Directors also considered the viability of the business beyond the
medium term. The Notes issued by the Group mature in June 2026
and, under the base-case scenario used in the viability assessment,
the Directors have assumed successful completion before 30 June
2026 of the proposed extension of the maturity date of the SSNs and
the SUNs to 31 December 2030 (refer to pages 56 –62).
Viability statement conclusion
Considering the above, the following conclusions can be drawn from
the viability assessment:
• The Group’s viability conclusion is not exposed to plausible downside
risks arising in isolation relating to the Group’s strategy, operations,
liquidity or compliance;
• In the event that a combination of three of the five plausible downside
scenarios were to arise together, the Group may require additional
funding to cover the capital expenditures required for development of
the Stepnoy Leopard fields;
• The Directors do not consider it plausible that four or five of the
assessed downside risks would arise together, given the mitigating
actions that would be expected to be taken by the Group if strategic,
operational or compliance risks were to materialise.
Based on these assessments and other matters considered by the
Board, the Directors have a reasonable expectation that the Group
will continue in operation and meet its liabilities as they fall due
throughout the three-year viability assessment period ending 30 June
2029, subject to successful completion of the proposed extension of
the maturity date of the SSNs and the SUNs to 31 December 2030.
FINANCIAL REVIEW
29 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
FINANCIAL REVIEW
Results of operations for the years ended 31 December 2025 and 2024
The table below sets forth the line items of the Group’s consolidated statement
of income for the years ended 31 December 2025 and 2024 in US Dollars and as a
percentage of revenue. For the year ended 31 December
In thousands of US Dollars
2025 % of
revenue
2024 % of
revenue
Revenue 118,020 100.0% 137,076 100.0%
Cost of sales (79,262) 67.2% (72,002) 52.5%
Gross profit 38,758 32.8% 65,074 47.5%
General and administrative expenses (15,072) 12.8% (13,952) 10.2%
Selling and transportation expenses (8,107) 6.9% (14,556) 10.6%
Taxes other than income tax (11,258) 9.5% (13,181) 9.6%
Finance costs (146,644) 124.3% (117,229) 85.5%
Impairment charge/ (reversal) (87,199) 73.9% 86,668 63.2%
Foreign exchange gain, net 251 0.2% 843 0.6%
Interest income 5,050 4.3% 7,139 5.2%
Other income 20,896 17.7% 13,425 9.8%
Other expenses (29,527) 25.0% (12,404) 9.0%
(Loss)/income before income tax (232,852) 197.3% 1,827 1.3%
Income tax expense 18,625 15.8% (28,404) 20.7%
Loss for the year (214,227) 181.5% (26,577) 19.4%
Currency translation difference (48) 0.0% (231) 0.2%
Total comprehensive loss for the year (214,275) 181.6% (26,808) 19.6%
General note
For the year ended 31 December 2025 (the “Reporting
Period”), the Group recorded a total comprehensive loss
of US$214.3 million, as opposed to US$26.8m total
comprehensive loss in 2024. This change is mainly due to:
• a US$86.7 million impairment reversal in 2024, which was
primarily driven by the value attributed to both processing of
Ural O&G volumes and development of Stepnoy Leopard
fields, vs US$87.2 million impairment charge in 2025, which
was primarily driven by a revision of the Chinarevskoye field
proved and probable reserves estimates (see pages 15 –18
for further details).
• A US$19.1 million decrease in revenues, which is primarily
due to decrease in Chinarevskoye production/sales volumes,
lower exportsales volumes and 14.3% decrease in the
average Brent crude oil price; which was partially offset by
increase in third-party hydrocarbon processing.
• A US$29.4 million increase in finance costs, resulting from
higher interest expense on borrowings and amortisation of
fair value adjustments and transaction cost on the Notes.
• A deferred tax benefit of US$23.4 million in 2025 as opposed
to deferred tax expense of US$24.5 million in 2024, primarily
reflecting the impairment charge recognised in 2025 and the
impairment reversal recognised in 2024, respectively.
Revenue
The following table shows details of the Group’s revenues by products with relevant
variances:
For the year ended 31 December
In thousands of US Dollar 2025 2024 Variance Variance, %
Revenue from oil and gas
condensate sales 67,998 89,335 (21,337) (23.9%)
Revenue from gas and LPG
sales 33,354 33,405 (51) (0.2%)
Revenue from external raw
material processing 16,535 14,336 2,199 15.3%
Revenue from sulphur sales 133 – 133 100.0%
Total revenue 118,020 137,076 (19,056) (13.9%)
Average Brent crude oil price
(US$/bbl) 69.1 80.6 (11.5) (14.3%)
The Group’s revenue decreased by US$19.1 million to
US$118.0 million compared with US$137.1 million in
2024. This reflected lower oil and condensate
revenues, driven by lower realised prices and lower
Chinarevskoye production, partially offset by higher
domestic revenues from increased sales volumes of dry
gas and LPG and a US$2.2 million increase in revenues
from external raw material processing.
The following table shows the Group’s revenue breakdown by export and domestic
sales:
For the year ended 31 December
In thousands of US Dollar 2025 2024 Variance Variance, %
Revenue from export sales 66,473 94,582 (28,109) (29.7%)
Revenue from domestic sales 51,547 42,494 9,053 21.3%
Total revenue 118,020 137,076 (19,056) (13.9%)
The Group’s sales volumes by product categories as well as total production volumes
are presented as follows:
For the year ended 31 December
In thousands of US Dollar 2025 2024 Variance Variance, %
Oil and gas condensate sales
volumes 1,507,145 1,555,288 (48,143) (3.1%)
Gas and LPG sales volumes 4,021,146 3,216,629 804,517 25.0%
Total sales volumes 5,528,291 4,771,917 756,374 15.9%
Production volumes 6,156,149 5,466,229 689,919 12.6%
Export revenues decreased due to lower average Brent
price, as well as continuing natural decline in
production from the Chinarevskoye field and lower
export ratio.
Increase in the domestic sales is driven by higher
processing volumes from Ural O&G with four additional
wells added in Q3 2024.
Pricing of the Group’s products is, directly or indirectly,
related to the price of Brent crude oil. The average
Brent crude oil price for 2025 was US$69.1/bbl (2024:
US$80.6/bbl)
29 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
FINANCIAL REVIEW
Results of operations for the years ended 31 December 2025 and 2024
The table below sets forth the line items of the Group’s consolidated statement
of income for the years ended 31 December 2025 and 2024 in US Dollars and as a
percentage of revenue. For the year ended 31 December
In thousands of US Dollars
2025 % of
revenue
2024 % of
revenue
Revenue 118,020 100.0% 137,076 100.0%
Cost of sales (79,262) 67.2% (72,002) 52.5%
Gross profit 38,758 32.8% 65,074 47.5%
General and administrative expenses (15,072) 12.8% (13,952) 10.2%
Selling and transportation expenses (8,107) 6.9% (14,556) 10.6%
Taxes other than income tax (11,258) 9.5% (13,181) 9.6%
Finance costs (146,644) 124.3% (117,229) 85.5%
Impairment charge/ (reversal) (87,199) 73.9% 86,668 63.2%
Foreign exchange gain, net 251 0.2% 843 0.6%
Interest income 5,050 4.3% 7,139 5.2%
Other income 20,896 17.7% 13,425 9.8%
Other expenses (29,527) 25.0% (12,404) 9.0%
(Loss)/income before income tax (232,852) 197.3% 1,827 1.3%
Income tax expense 18,625 15.8% (28,404) 20.7%
Loss for the year (214,227) 181.5% (26,577) 19.4%
Currency translation difference (48) 0.0% (231) 0.2%
Total comprehensive loss for the year (214,275) 181.6% (26,808) 19.6%
General note
For the year ended 31 December 2025 (the “Reporting
Period”), the Group recorded a total comprehensive loss
of US$214.3 million, as opposed to US$26.8m total
comprehensive loss in 2024. This change is mainly due to:
• a US$86.7 million impairment reversal in 2024, which was
primarily driven by the value attributed to both processing of
Ural O&G volumes and development of Stepnoy Leopard
fields, vs US$87.2 million impairment charge in 2025, which
was primarily driven by a revision of the Chinarevskoye field
proved and probable reserves estimates (see pages 15 –18
for further details).
• A US$19.1 million decrease in revenues, which is primarily
due to decrease in Chinarevskoye production/sales volumes,
lower exportsales volumes and 14.3% decrease in the
average Brent crude oil price; which was partially offset by
increase in third-party hydrocarbon processing.
• A US$29.4 million increase in finance costs, resulting from
higher interest expense on borrowings and amortisation of
fair value adjustments and transaction cost on the Notes.
• A deferred tax benefit of US$23.4 million in 2025 as opposed
to deferred tax expense of US$24.5 million in 2024, primarily
reflecting the impairment charge recognised in 2025 and the
impairment reversal recognised in 2024, respectively.
Revenue
The following table shows details of the Group’s revenues by products with relevant
variances:
For the year ended 31 December
In thousands of US Dollar 2025 2024 Variance Variance, %
Revenue from oil and gas
condensate sales 67,998 89,335 (21,337) (23.9%)
Revenue from gas and LPG
sales 33,354 33,405 (51) (0.2%)
Revenue from external raw
material processing 16,535 14,336 2,199 15.3%
Revenue from sulphur sales 133 – 133 100.0%
Total revenue 118,020 137,076 (19,056) (13.9%)
Average Brent crude oil price
(US$/bbl) 69.1 80.6 (11.5) (14.3%)
The Group’s revenue decreased by US$19.1 million to
US$118.0 million compared with US$137.1 million in
2024. This reflected lower oil and condensate
revenues, driven by lower realised prices and lower
Chinarevskoye production, partially offset by higher
domestic revenues from increased sales volumes of dry
gas and LPG and a US$2.2 million increase in revenues
from external raw material processing.
The following table shows the Group’s revenue breakdown by export and domestic
sales:
For the year ended 31 December
In thousands of US Dollar 2025 2024 Variance Variance, %
Revenue from export sales 66,473 94,582 (28,109) (29.7%)
Revenue from domestic sales 51,547 42,494 9,053 21.3%
Total revenue 118,020 137,076 (19,056) (13.9%)
The Group’s sales volumes by product categories as well as total production volumes
are presented as follows:
For the year ended 31 December
In thousands of US Dollar 2025 2024 Variance Variance, %
Oil and gas condensate sales
volumes 1,507,145 1,555,288 (48,143) (3.1%)
Gas and LPG sales volumes 4,021,146 3,216,629 804,517 25.0%
Total sales volumes 5,528,291 4,771,917 756,374 15.9%
Production volumes 6,156,149 5,466,229 689,919 12.6%
Export revenues decreased due to lower average Brent
price, as well as continuing natural decline in
production from the Chinarevskoye field and lower
export ratio.
Increase in the domestic sales is driven by higher
processing volumes from Ural O&G with four additional
wells added in Q3 2024.
Pricing of the Group’s products is, directly or indirectly,
related to the price of Brent crude oil. The average
Brent crude oil price for 2025 was US$69.1/bbl (2024:
US$80.6/bbl)
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
30
STRATEGIC REPORT
Cost of Sales
For the year ended 31 December
In thousands of US Dollars 2025 2024 Variance Variance, %
Depreciation, depletion and
amortisation 33,121 25,489 7,632 29.9%
Payroll and related taxes 17,317 18,647 (1,330) (7.1%)
Materials and supplies 11,197 9,918 1,279 12.9%
Repair, maintenance and other
services 8,240 8,476 (236) (2.8%)
Transportation services 3,108 3,568 (460) (12.9%)
Well repair and maintenance costs 5,764 4,667 1,097 23.5%
Environmental levies 292 163 129 79.1%
Change in stock (535) 292 (827) (283.2%)
Other 758 782 (24) (3.1%)
Total 79,262 72,002 7,260 10.1%
Cost of sales for the reporting period increased by 10.1% to US$79.3 million (2024:
US$72.0 million). The following main components of cost of sales changed materially:
• Depreciation, depletion, and amortization (DD&A) costs increased by 29.9% to US$33.1
million (2024: US$25.5 million). The increase in DD&A primarily reflects effect of the
impairment recognised as at 31 December 2024 and the resulting higher depreciation
charges in 2025 relating to the Group’s production assetsan .
• Well repair and maintenance costs increased by 23.5%
to US$5.8 million (2024: US$4.7 million), reflecting
additional maintenance activities aimed at sustaining the
productivity of the Group’s wells.
• Materials and supplies expenses increased by 12.9% to
US$11.2 million (2024: US$9.9 million), primarily due to
increased consumption of materials associated with
production and processing activities.
• Transportation services decreased by 12.9% to US$3.1
million (2024: US$3.6 million), mainly due to the
optimisation of these services.
• Payroll and related taxes decreased by 7.1% to US$17.3
million (2024: US$18.6 million), reflecting changes in
staffing levels and cost optimisation measures.
General and administrative expenses
For the year ended 31 December
In thousands of US Dollars 2025 2024 Variance Variance, %
Payroll and related taxes 8,636 8,550 86 1.0%
Professional services 4,080 3,556 524 14.7%
Insurance fees 533 457 76 16.6%
Business travel 571 497 74 14.9%
Short-term leases 159 129 30 23.3%
Communication 156 160 (4) (2.5%)
Depreciation and amortisation 364 66 298 451.5%
Materials and supplies 147 147 – –
Bank charges 36 28 8 28.6%
Other 390 362 28 7.7%
Total 15,072 13,952 1,120 8.0%
General and administrative expenses increased
to US$15.1 million in 2025 (2024: US$14.0 million),
which was mainly driven by an increase in professional
services costs by 14.7%, from US$3.6 million to US$4.1
million, as well as increase in depreciation expense by
to US$0.4 million resulting from the impairment
reversal as of 1 January 2025.
Selling and transportation expenses
For the year ended 31 December
In thousands of US Dollars 2025 2024 Variance Variance, %
Transportation costs 3,261 6,268 (3,007) (48.0%)
Loading and storage costs 1,094 4,520 (3,426) (75.8%)
Payroll and related taxes 1,847 1,844 3 0.2%
Other 1,905 1,924 (19) (1.0%)
Total 8,107 14,556 (6,449) (44.3%)
Selling and transportation expenses for the reporting
period decreased by 44.3% to US$8.1 million (2024:
US$14.6 million). This decrease was primarily driven
by 48.0% decrease in transportation costs, and 75.8%
decrease in loading and storage costs. These changes
were driven mainly by changes in condensate export
delivery terms to FCA Beles together with a
corresponding increase in price discount.
Taxes & Other Income Tax
For the year ended 31 December
In thousands of US Dollars 2025 2024 Variance Variance, %
Export customs duty 6,383 7,069 (686) (9.7%)
Royalties 3,235 4,464 (1,229) (27.5%)
Government profit share 765 1,106 (341) (30.8%)
Other taxes 875 542 333 61.4%
Total 11,258 13,181 (1,923) (14.6%)
The reduction export customs duty, royalties and
government profit share were driven by the combined
effects of lower market prices and reduced oil and
condensate export revenues.
The overall effect of these factors resulted in a total tax
expense, excluding income tax, of US$11.3 million,
representing a 14.6% decrease from US$13.2 million in
2024.
STRATEGIC REPORT
Cost of Sales
For the year ended 31 December
In thousands of US Dollars 2025 2024 Variance Variance, %
Depreciation, depletion and
amortisation 33,121 25,489 7,632 29.9%
Payroll and related taxes 17,317 18,647 (1,330) (7.1%)
Materials and supplies 11,197 9,918 1,279 12.9%
Repair, maintenance and other
services 8,240 8,476 (236) (2.8%)
Transportation services 3,108 3,568 (460) (12.9%)
Well repair and maintenance costs 5,764 4,667 1,097 23.5%
Environmental levies 292 163 129 79.1%
Change in stock (535) 292 (827) (283.2%)
Other 758 782 (24) (3.1%)
Total 79,262 72,002 7,260 10.1%
Cost of sales for the reporting period increased by 10.1% to US$79.3 million (2024:
US$72.0 million). The following main components of cost of sales changed materially:
• Depreciation, depletion, and amortization (DD&A) costs increased by 29.9% to US$33.1
million (2024: US$25.5 million). The increase in DD&A primarily reflects effect of the
impairment recognised as at 31 December 2024 and the resulting higher depreciation
charges in 2025 relating to the Group’s production assetsan .
• Well repair and maintenance costs increased by 23.5%
to US$5.8 million (2024: US$4.7 million), reflecting
additional maintenance activities aimed at sustaining the
productivity of the Group’s wells.
• Materials and supplies expenses increased by 12.9% to
US$11.2 million (2024: US$9.9 million), primarily due to
increased consumption of materials associated with
production and processing activities.
• Transportation services decreased by 12.9% to US$3.1
million (2024: US$3.6 million), mainly due to the
optimisation of these services.
• Payroll and related taxes decreased by 7.1% to US$17.3
million (2024: US$18.6 million), reflecting changes in
staffing levels and cost optimisation measures.
General and administrative expenses
For the year ended 31 December
In thousands of US Dollars 2025 2024 Variance Variance, %
Payroll and related taxes 8,636 8,550 86 1.0%
Professional services 4,080 3,556 524 14.7%
Insurance fees 533 457 76 16.6%
Business travel 571 497 74 14.9%
Short-term leases 159 129 30 23.3%
Communication 156 160 (4) (2.5%)
Depreciation and amortisation 364 66 298 451.5%
Materials and supplies 147 147 – –
Bank charges 36 28 8 28.6%
Other 390 362 28 7.7%
Total 15,072 13,952 1,120 8.0%
General and administrative expenses increased
to US$15.1 million in 2025 (2024: US$14.0 million),
which was mainly driven by an increase in professional
services costs by 14.7%, from US$3.6 million to US$4.1
million, as well as increase in depreciation expense by
to US$0.4 million resulting from the impairment
reversal as of 1 January 2025.
Selling and transportation expenses
For the year ended 31 December
In thousands of US Dollars 2025 2024 Variance Variance, %
Transportation costs 3,261 6,268 (3,007) (48.0%)
Loading and storage costs 1,094 4,520 (3,426) (75.8%)
Payroll and related taxes 1,847 1,844 3 0.2%
Other 1,905 1,924 (19) (1.0%)
Total 8,107 14,556 (6,449) (44.3%)
Selling and transportation expenses for the reporting
period decreased by 44.3% to US$8.1 million (2024:
US$14.6 million). This decrease was primarily driven
by 48.0% decrease in transportation costs, and 75.8%
decrease in loading and storage costs. These changes
were driven mainly by changes in condensate export
delivery terms to FCA Beles together with a
corresponding increase in price discount.
Taxes & Other Income Tax
For the year ended 31 December
In thousands of US Dollars 2025 2024 Variance Variance, %
Export customs duty 6,383 7,069 (686) (9.7%)
Royalties 3,235 4,464 (1,229) (27.5%)
Government profit share 765 1,106 (341) (30.8%)
Other taxes 875 542 333 61.4%
Total 11,258 13,181 (1,923) (14.6%)
The reduction export customs duty, royalties and
government profit share were driven by the combined
effects of lower market prices and reduced oil and
condensate export revenues.
The overall effect of these factors resulted in a total tax
expense, excluding income tax, of US$11.3 million,
representing a 14.6% decrease from US$13.2 million in
2024.
FINANCIAL REVIEW
31 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Finance Costs
For the year ended 31 December
In thousands of US Dollars 2025 2024 Variance Variance, %
Interest expense on borrowings 144,137 114,391 29,746 26.0%
Unwinding of discount on
abandonment and site
restoration provision
1,182 1,006 176 17.5%
Unwinding of discount on amounts
due to Government of
Kazakhstan
550 606 (56) (9.2%)
Other finance costs 775 1,226 (451) (36.8%)
Total 146,644 117,229 29,415 25.1%
Finance costs in 2025 increased by 25.1% driven
primarily by higher interest expense on borrowings
arising from accelerated amortisation of fair value
adjustments and transaction costs on the SSNs and
SUNs, capitalisation of PIK coupon on the SUNs, and
one-off consent fees of US$3.9 million accrued in
relation to delays in payment of coupons due on 30
June 2025 and 31 December 2025.
Other expenses
Other expenses in 2025 increased to US$29.5 million compared to
US$12.4 million in 2024. This increase was primarily driven by:
• Management Incentive Plan (MIP) payments, including quarterly
instalments in respect of MIP Award 1 (US$1.0 million and US$2.0
million) and US$14.35 million paid in 2025 in respect of MIP Award 2
after its performance conditions were met in April 2025.
• US$3.5 million of agent expenses paid in 2025 for transportation and
loading of LPG (2024: nil), which were reimbursed by the customers
and corresponding income recognized within Other income.
• Partly offset by a US$1.1 million decrease in other taxes and penalties
to US$0.5 million.
• A lower level of social contribution expenses in 2025 compared with
the US$1.2 million of one-off expenses incurred in 2024 for aid
provided to victims of flooding in Western Kazakhstan.
Income tax
In 2025 the Group recognised US$18.6 million income tax benefit as
opposed to US$28.4 million income tax expense in 2024. A change of
US$47.0 million was driven by:
• Deferred tax benefit of US$23.4 million recognized during Reporting
period (FY 2024: expense of US$24.5 million). The deferred tax benefit
resulted from impairment charge recognized in 2025, as well as
fluctuation of the FX rate of the tenge against the US dollar, combined
with the effect of differences in depreciation between tax and IFRS
accounting.
• Deferred tax expense in 2024 resulting from impairment reversal at 31
December 2024 as well as fluctuation of the FX rate of the tenge
against the US dollar, combined with the effect of differences in
depreciation between tax and IFRS accounting.
• Increase in current income tax expense from US$3.9 million in 2024 to
US$4.8 million in 2025. This was a result of one-off income tax credits
related to previous periods recognized in 2024.
Liquidity and capital resources
During the period under review, Nostrum primarily relied on cash generated from operations together with limited use of existing cash reserves.
In allocating capital, the Group continues to assess the relative risk and return of available opportunities before making decisions on capital
expenditure and external financing requirements. Further details on the short-term and medium-term liquidity analysis are described in the
Going concern statement (page 32) and Viability statement (pages 27 –28).
FY 2025 FY 2024
In thousands of US Dollars Before one-off
items
One-off
items Total Before one-off
items
One-off
items Total
Net cash flows from operating activities 29,857 (16,350) 13,507 33,076 – 33,076
Net cash used in investing activities (9,691) (9,270) (18,961) 1,241 (27,710) (26,469)
Net cash used in financing activities (2,750) 1,060 (1,690) (17,713) – (17,713)
Effects of exchange rate changes on cash and cash equivalents 13 – 13 (186) – (186)
Net cashflows for the year 17,429 (24,560) (7,131) 16,418 (27,710) (11,292)
Cash and cash equivalents at the beginning of the year 150,419 161,711
Cash and cash equivalents at the end of the year* 143,288 150,419
Net cash flows from operating activities before one-off items
Net cash from operating activities before one-off items amounted to
US$29.9 million for the reporting period (2024: US$33.1 million). This
change was driven lower revenues, effect cost optimisation and
working capital movements.
Net cash used in investing activities
Net cash used in investing activities before one-off items reflects
US$13.6 million spent (2024: US$5.6 million) on various capital repairs,
upgrades of facilities (including LPS3) and capital expenditure related
to well workover & intervention programme, offset by US$4.6 million
interest received from term deposits and money market funds (2024:
US$6.8 million).
Net cash used in financing activities
Net cash used in financing activities for the reporting period amounted to
US$2.7 million (2024: US$17.7 million) and was mainly represented by
various finance costs payments. In 2024, the outflow was mainly
represented by a US$16.5 million coupon payment on the SSNs and SUNs
(none in 2025 due to the technical delay in payments).
Net cash used for one-off items in 2025
Net cash flows from operating activities include US$16.4 million in MIP
payments during 2025. Investing activities include US$6.3 million spent on
Chinarevskoye drilling programmes expenditures and US$3.0 million spent
on the Stepnoy Leopard fields.
Net cash used for one-off items in 2024
US$27.7 million net cash used in investing activities for the reporting
period was mainly due to drilling programmes, with US$21.2 million spent
on the Chinarevskoye field and US$5.8 million spent on the Stepnoy
Leopard fields.
31 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Finance Costs
For the year ended 31 December
In thousands of US Dollars 2025 2024 Variance Variance, %
Interest expense on borrowings 144,137 114,391 29,746 26.0%
Unwinding of discount on
abandonment and site
restoration provision
1,182 1,006 176 17.5%
Unwinding of discount on amounts
due to Government of
Kazakhstan
550 606 (56) (9.2%)
Other finance costs 775 1,226 (451) (36.8%)
Total 146,644 117,229 29,415 25.1%
Finance costs in 2025 increased by 25.1% driven
primarily by higher interest expense on borrowings
arising from accelerated amortisation of fair value
adjustments and transaction costs on the SSNs and
SUNs, capitalisation of PIK coupon on the SUNs, and
one-off consent fees of US$3.9 million accrued in
relation to delays in payment of coupons due on 30
June 2025 and 31 December 2025.
Other expenses
Other expenses in 2025 increased to US$29.5 million compared to
US$12.4 million in 2024. This increase was primarily driven by:
• Management Incentive Plan (MIP) payments, including quarterly
instalments in respect of MIP Award 1 (US$1.0 million and US$2.0
million) and US$14.35 million paid in 2025 in respect of MIP Award 2
after its performance conditions were met in April 2025.
• US$3.5 million of agent expenses paid in 2025 for transportation and
loading of LPG (2024: nil), which were reimbursed by the customers
and corresponding income recognized within Other income.
• Partly offset by a US$1.1 million decrease in other taxes and penalties
to US$0.5 million.
• A lower level of social contribution expenses in 2025 compared with
the US$1.2 million of one-off expenses incurred in 2024 for aid
provided to victims of flooding in Western Kazakhstan.
Income tax
In 2025 the Group recognised US$18.6 million income tax benefit as
opposed to US$28.4 million income tax expense in 2024. A change of
US$47.0 million was driven by:
• Deferred tax benefit of US$23.4 million recognized during Reporting
period (FY 2024: expense of US$24.5 million). The deferred tax benefit
resulted from impairment charge recognized in 2025, as well as
fluctuation of the FX rate of the tenge against the US dollar, combined
with the effect of differences in depreciation between tax and IFRS
accounting.
• Deferred tax expense in 2024 resulting from impairment reversal at 31
December 2024 as well as fluctuation of the FX rate of the tenge
against the US dollar, combined with the effect of differences in
depreciation between tax and IFRS accounting.
• Increase in current income tax expense from US$3.9 million in 2024 to
US$4.8 million in 2025. This was a result of one-off income tax credits
related to previous periods recognized in 2024.
Liquidity and capital resources
During the period under review, Nostrum primarily relied on cash generated from operations together with limited use of existing cash reserves.
In allocating capital, the Group continues to assess the relative risk and return of available opportunities before making decisions on capital
expenditure and external financing requirements. Further details on the short-term and medium-term liquidity analysis are described in the
Going concern statement (page 32) and Viability statement (pages 27 –28).
FY 2025 FY 2024
In thousands of US Dollars Before one-off
items
One-off
items Total Before one-off
items
One-off
items Total
Net cash flows from operating activities 29,857 (16,350) 13,507 33,076 – 33,076
Net cash used in investing activities (9,691) (9,270) (18,961) 1,241 (27,710) (26,469)
Net cash used in financing activities (2,750) 1,060 (1,690) (17,713) – (17,713)
Effects of exchange rate changes on cash and cash equivalents 13 – 13 (186) – (186)
Net cashflows for the year 17,429 (24,560) (7,131) 16,418 (27,710) (11,292)
Cash and cash equivalents at the beginning of the year 150,419 161,711
Cash and cash equivalents at the end of the year* 143,288 150,419
Net cash flows from operating activities before one-off items
Net cash from operating activities before one-off items amounted to
US$29.9 million for the reporting period (2024: US$33.1 million). This
change was driven lower revenues, effect cost optimisation and
working capital movements.
Net cash used in investing activities
Net cash used in investing activities before one-off items reflects
US$13.6 million spent (2024: US$5.6 million) on various capital repairs,
upgrades of facilities (including LPS3) and capital expenditure related
to well workover & intervention programme, offset by US$4.6 million
interest received from term deposits and money market funds (2024:
US$6.8 million).
Net cash used in financing activities
Net cash used in financing activities for the reporting period amounted to
US$2.7 million (2024: US$17.7 million) and was mainly represented by
various finance costs payments. In 2024, the outflow was mainly
represented by a US$16.5 million coupon payment on the SSNs and SUNs
(none in 2025 due to the technical delay in payments).
Net cash used for one-off items in 2025
Net cash flows from operating activities include US$16.4 million in MIP
payments during 2025. Investing activities include US$6.3 million spent on
Chinarevskoye drilling programmes expenditures and US$3.0 million spent
on the Stepnoy Leopard fields.
Net cash used for one-off items in 2024
US$27.7 million net cash used in investing activities for the reporting
period was mainly due to drilling programmes, with US$21.2 million spent
on the Chinarevskoye field and US$5.8 million spent on the Stepnoy
Leopard fields.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
32
STRATEGIC REPORT
Commitments
Liquidity risk is the risk that the Group will encounter difficulty raising funds to meet
commitments associated with its financial liabilities.
Liquidity requirements are monitored on a regular basis and management seeks to
ensure that sufficient funds are available to meet any commitments as they arise. The
table below summarizes the maturity profile of the Group’s financial liabilities as at
31 December 2025 based on contractual undiscounted payments (as audited).
In thousands of US Dollars On
demand
Less
than 3
months
3-12
months
1-5
years
More
than 5
years Total
Borrowings 739,858 – – – – 739,858
Trade payables 10,451 – 216 – – 10,667
Other current liabilities 9,409 – – – – 9,409
Due to Government of
Kazakhstan
– 258 773 4,124 257 5,412
759,718 258 989 4,124 257 765,346
Capital commitments
During the reporting period, Nostrum’s cash used
in capital expenditures for the purchase of PPE for
both the Chinarevskoye and Stepnoy Leopard
fields, as well as drilling programme, infrastructure
development projects and well workover and
intervention works at the Chinarevskoye field,
amounted to US$19.0 million. These works
enhanced production capacities over 2025 - 2026
and beyond.
Dividend policy
The Group currently pays no dividend and has not
done so since 2015, as the Board determined it was
not in the Company’s best interests to do so. This
will be reviewed annually by the Board.
Going concern
The Group monitors on an ongoing basis its liquidity position, near-term
forecasts, and key financial ratios to ensure that sufficient funds are
available to meet its commitments as they arise and liabilities as they fall
due. The Group reforecasts its rolling 3-year cashflows on a quarterly basis
and stress tests its future liquidity position for changes in product prices,
production volumes, costs and other significant events.
The Directors are focused on a range of potential opportunities and actions
aimed at improving the liquidity outlook in the near-term and creating value
from long-term growth opportunities. These actions include, amongst other
things, the ongoing base case scenario efforts to further optimize capital
expenditures, operating expenses and general and administration expenses,
improving netbacks realized from product sales, and increasing utilisation of
the Group’s processing infrastructure.
The Directors’ going concern assessment is supported by the future cash
flow forecasts covering the going concern period to 30 June 2027. As at 31
December 2025, the Group had unrestricted cash balances of US$143.3
million (including liquid current investments of US$136.0 million) and
US$17.0 million held in the debt service retention account (DSRA). The Base
Case reflects production forecasts consistent with the Board approved
plans, assumes a Brent oil price of US$85/bbl for the rest of 2026 and
US$75/bbl for 2027 and onwards, includes minimum licence commitment
expenditures for the Chinarevskoye and Stepnoy Leopard Fields, and
assumes completion of the Proposed Transaction before 30 June 2026
(please refer to page 34 ). Under this Base Case, the Group forecasts to have
a cash balance of more than US$115 million as of 30 June 2027.
The Base Case has been tested for sensitivity against the key assumptions,
including a US$15/bbl reduction in Brent oil prices, a 10% reduction in
forecast Chinarevskoye production and third-party UOG processing
volumes, a 10% increase in operating and G&A expenses, additional
contingent capital expenditure, and possible tax and other audit fines and
penalties. Based on this analysis, assuming that the Proposed Transaction is
completed, the Directors concluded that the Group would be able to
withstand downside movements in these assumptions individually, and in in
combination. In addition, a reverse stress testing was performed by
modelling a combination of all downside sensitivities, in which case the
Company might be unable to meet its liabilities as they fall due before the
end of the going concern assessment period, however such scenario is not
considered plausible.
On 30 March 2026 the Group announced that it had reached an in-principle
agreement with an ad hoc group of beneficial owners of its Notes regarding
the key commercial terms for a proposed extension of the maturity date of
the SSNs and the SUNs to 31 December 2030 (the “Proposed Transaction”),
as more fully described on page 34 . Whilst this marked a key milestone in
the Company’s bond restructuring process and established an agreed
framework for the proposed amendments and maturity extension of the
Notes, the Proposed Transaction had not, as at the date of the approval of
these consolidated financial statements, been contractually completed. The
completion of the Proposed Transaction remains subject to a number of
further steps and conditions, including:
• the receipt of required regulatory and sanctions-related approvals relevant
to the implementation of the Proposed Transaction;
• completion of the consent solicitations in respect of the SSNs and SUNs and
the related SSN offer process.
The Group is continuing to pursue the required licences and approvals as
soon as practicable and has developed contingency plans in case such
licences are not received in time for completion of the Proposed Transaction
before the maturity of the bonds on 30 June 2026. Pending receipt of the
relevant sanctions-related licences, the Group does not expect to be in a
position to make interest payments in respect of the SSNs and the SUNs.
As at the date of approval of these consolidated financial statements, the
above matters remained unresolved, with the outcomes uncertain and
largely outside of the Group’s control. If one or more of these matters is not
resolved in time, the Proposed Transaction may not be completed on the
agreed terms, or at all, before the SSNs and SUNs mature on 30 June 2026.
Accordingly, there is a material uncertainty related to events and conditions
that may cast significant doubt on the Group’s and the Company’s ability to
continue as a going concern for the period to 30 June 2027.
Directors also have considered the risks and uncertainties that tax legislation
and practice in Kazakhstan can be subject to differing interpretations by tax
authorities and courts, with an unfavourable outcome for the Group as
further described in the Notes 30 and 32 to the consolidated financial
statements. However, the Directors intends to continue to defend the
Group’s position in these matters through the available administrative,
judicial and other legal processes, and have included any impact of these
matters in the future cash flow forecasts.
After careful consideration, and assuming completion of the Proposed
Transaction substantially in accordance with the terms currently
contemplated, the Directors have a reasonable expectation that the Group
will have sufficient financial resources to continue in operation throughout
the going concern period to 30 June 2027. The Directors will continue to
assess this position and have developed contingency plans in the event that
the the Proposed Transaction does not proceed on the agreed set of terms.
The Directors have also considered events and conditions beyond that
period, and draw attention to the Viability Statement on pages 27 – 28 .
In accordance with Provision 30 of the UK Corporate Governance Code
2024, the Directors consider it appropriate to adopt the going concern basis
of accounting in preparing these consolidated financial statements.
The consolidated financial statements do not include any adjustments
relative to the recoverability or classification of recorded assets amounts or,
to the amounts and classification of liabilities that might be necessary
should the Group not continue as a going concern.
STRATEGIC REPORT
Commitments
Liquidity risk is the risk that the Group will encounter difficulty raising funds to meet
commitments associated with its financial liabilities.
Liquidity requirements are monitored on a regular basis and management seeks to
ensure that sufficient funds are available to meet any commitments as they arise. The
table below summarizes the maturity profile of the Group’s financial liabilities as at
31 December 2025 based on contractual undiscounted payments (as audited).
In thousands of US Dollars On
demand
Less
than 3
months
3-12
months
1-5
years
More
than 5
years Total
Borrowings 739,858 – – – – 739,858
Trade payables 10,451 – 216 – – 10,667
Other current liabilities 9,409 – – – – 9,409
Due to Government of
Kazakhstan
– 258 773 4,124 257 5,412
759,718 258 989 4,124 257 765,346
Capital commitments
During the reporting period, Nostrum’s cash used
in capital expenditures for the purchase of PPE for
both the Chinarevskoye and Stepnoy Leopard
fields, as well as drilling programme, infrastructure
development projects and well workover and
intervention works at the Chinarevskoye field,
amounted to US$19.0 million. These works
enhanced production capacities over 2025 - 2026
and beyond.
Dividend policy
The Group currently pays no dividend and has not
done so since 2015, as the Board determined it was
not in the Company’s best interests to do so. This
will be reviewed annually by the Board.
Going concern
The Group monitors on an ongoing basis its liquidity position, near-term
forecasts, and key financial ratios to ensure that sufficient funds are
available to meet its commitments as they arise and liabilities as they fall
due. The Group reforecasts its rolling 3-year cashflows on a quarterly basis
and stress tests its future liquidity position for changes in product prices,
production volumes, costs and other significant events.
The Directors are focused on a range of potential opportunities and actions
aimed at improving the liquidity outlook in the near-term and creating value
from long-term growth opportunities. These actions include, amongst other
things, the ongoing base case scenario efforts to further optimize capital
expenditures, operating expenses and general and administration expenses,
improving netbacks realized from product sales, and increasing utilisation of
the Group’s processing infrastructure.
The Directors’ going concern assessment is supported by the future cash
flow forecasts covering the going concern period to 30 June 2027. As at 31
December 2025, the Group had unrestricted cash balances of US$143.3
million (including liquid current investments of US$136.0 million) and
US$17.0 million held in the debt service retention account (DSRA). The Base
Case reflects production forecasts consistent with the Board approved
plans, assumes a Brent oil price of US$85/bbl for the rest of 2026 and
US$75/bbl for 2027 and onwards, includes minimum licence commitment
expenditures for the Chinarevskoye and Stepnoy Leopard Fields, and
assumes completion of the Proposed Transaction before 30 June 2026
(please refer to page 34 ). Under this Base Case, the Group forecasts to have
a cash balance of more than US$115 million as of 30 June 2027.
The Base Case has been tested for sensitivity against the key assumptions,
including a US$15/bbl reduction in Brent oil prices, a 10% reduction in
forecast Chinarevskoye production and third-party UOG processing
volumes, a 10% increase in operating and G&A expenses, additional
contingent capital expenditure, and possible tax and other audit fines and
penalties. Based on this analysis, assuming that the Proposed Transaction is
completed, the Directors concluded that the Group would be able to
withstand downside movements in these assumptions individually, and in in
combination. In addition, a reverse stress testing was performed by
modelling a combination of all downside sensitivities, in which case the
Company might be unable to meet its liabilities as they fall due before the
end of the going concern assessment period, however such scenario is not
considered plausible.
On 30 March 2026 the Group announced that it had reached an in-principle
agreement with an ad hoc group of beneficial owners of its Notes regarding
the key commercial terms for a proposed extension of the maturity date of
the SSNs and the SUNs to 31 December 2030 (the “Proposed Transaction”),
as more fully described on page 34 . Whilst this marked a key milestone in
the Company’s bond restructuring process and established an agreed
framework for the proposed amendments and maturity extension of the
Notes, the Proposed Transaction had not, as at the date of the approval of
these consolidated financial statements, been contractually completed. The
completion of the Proposed Transaction remains subject to a number of
further steps and conditions, including:
• the receipt of required regulatory and sanctions-related approvals relevant
to the implementation of the Proposed Transaction;
• completion of the consent solicitations in respect of the SSNs and SUNs and
the related SSN offer process.
The Group is continuing to pursue the required licences and approvals as
soon as practicable and has developed contingency plans in case such
licences are not received in time for completion of the Proposed Transaction
before the maturity of the bonds on 30 June 2026. Pending receipt of the
relevant sanctions-related licences, the Group does not expect to be in a
position to make interest payments in respect of the SSNs and the SUNs.
As at the date of approval of these consolidated financial statements, the
above matters remained unresolved, with the outcomes uncertain and
largely outside of the Group’s control. If one or more of these matters is not
resolved in time, the Proposed Transaction may not be completed on the
agreed terms, or at all, before the SSNs and SUNs mature on 30 June 2026.
Accordingly, there is a material uncertainty related to events and conditions
that may cast significant doubt on the Group’s and the Company’s ability to
continue as a going concern for the period to 30 June 2027.
Directors also have considered the risks and uncertainties that tax legislation
and practice in Kazakhstan can be subject to differing interpretations by tax
authorities and courts, with an unfavourable outcome for the Group as
further described in the Notes 30 and 32 to the consolidated financial
statements. However, the Directors intends to continue to defend the
Group’s position in these matters through the available administrative,
judicial and other legal processes, and have included any impact of these
matters in the future cash flow forecasts.
After careful consideration, and assuming completion of the Proposed
Transaction substantially in accordance with the terms currently
contemplated, the Directors have a reasonable expectation that the Group
will have sufficient financial resources to continue in operation throughout
the going concern period to 30 June 2027. The Directors will continue to
assess this position and have developed contingency plans in the event that
the the Proposed Transaction does not proceed on the agreed set of terms.
The Directors have also considered events and conditions beyond that
period, and draw attention to the Viability Statement on pages 27 – 28 .
In accordance with Provision 30 of the UK Corporate Governance Code
2024, the Directors consider it appropriate to adopt the going concern basis
of accounting in preparing these consolidated financial statements.
The consolidated financial statements do not include any adjustments
relative to the recoverability or classification of recorded assets amounts or,
to the amounts and classification of liabilities that might be necessary
should the Group not continue as a going concern.
33
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
FIVE-YEAR SUMMARY
In millions of US$ (unless mentioned otherwise) 2025 2024 2023 2022 2021
EBITDA reconcillation
Profit/(loss) before income tax (232.9) 1.8 836.3 (81.8) 5.6
Add back
Finance costs 146.6 117.2 102.8 123.1 116.7
Impairment reversal 87.2 (86.7) – – (74.2)
Gain on debt-to-equity exchange – – (769.6) – –
Fair value adjustment on recognition of debt instruments – – (174.4) – –
Employee share options-fair value adjustment – – – – (0.2)
Foreign exchange loss/ (gain), net (0.3) (0.9) 1.0 (0.3) 0.3
Interest income (5.1) (7.1) (2.7) (0.3) (0.3)
Other expenses 29.5 12.4 14.7 29.8 13.2
Other income (20.9) (13.4) (6.4) (6.8) (5.9)
Depriciation, depletion and amortisation 33.5 25.6 40.5 51.8 57.3
EBITDA 37.6 48.9 42.1 115.5 112.5
Operating costs reconcilliation
Cost of sales 79.3 72.0 77.6 84.1 87.8
Less:
Depriciation, depletion and amortisation (33.1) (25.5) (40.3) (40.3) (55.6)
Cost of raw materials purchased (5.9) (4.1) – – –
Change in stock 0.5 (0.3) (0.7) (1.2) (0.4)
Operating costs 40.8 42.1 36.6 42.6 31.8
G&A reconcillation
General and administrative expenses 15.1 14.0 13.8 12.1 12.1
Adjusted for:
Depreciation and amortisation (0.4) (0.1) (0.2) (0.2) (0.2)
G&A 14.7 13.9 13.6 11.9 11.9
Net debt reconcilliation
Long-term borrowings – 571.4 471.7 – –
Current portion of long-term borrowings 701.8 0.2 0.2 1,396.5 1,289.6
Less:
Cash and cash equivalents 143.3 150.4 161.7 233.6 165.2
DSRA / Escrow account 17.0 16.8 16.5 22.8 22.7
Net debt 541.5 404.4 293.7 1,140.1 1,101.7
Net cash flows from operating activities 13.5 33.1 (2.2) 102.2 117.4
Net cash used in investing activities (19.0) (26.5) (28.1) (15.8) (19.8)
Net cash (used in)/ from financing activities (1.7) (17.7) (41.6) (17.5) (10.9)
EBITDA margin 4 31.9% 35.7% 35.2% 57.9% 57.6%
Share price at end of period (US$) 0.05 0.09 0.09 0.03 0.07
Shares outstanding (`000s) 165,245 169,382 169,382 188,183 188,183
Options outstanding (`000s) 2,949 2,949 2,949 3,432 3,432
FIVE-YEAR SUMMARY
In millions of US$ (unless mentioned otherwise) 2025 2024 2023 2022 2021
EBITDA reconcillation
Profit/(loss) before income tax (232.9) 1.8 836.3 (81.8) 5.6
Add back
Finance costs 146.6 117.2 102.8 123.1 116.7
Impairment reversal 87.2 (86.7) – – (74.2)
Gain on debt-to-equity exchange – – (769.6) – –
Fair value adjustment on recognition of debt instruments – – (174.4) – –
Employee share options-fair value adjustment – – – – (0.2)
Foreign exchange loss/ (gain), net (0.3) (0.9) 1.0 (0.3) 0.3
Interest income (5.1) (7.1) (2.7) (0.3) (0.3)
Other expenses 29.5 12.4 14.7 29.8 13.2
Other income (20.9) (13.4) (6.4) (6.8) (5.9)
Depriciation, depletion and amortisation 33.5 25.6 40.5 51.8 57.3
EBITDA 37.6 48.9 42.1 115.5 112.5
Operating costs reconcilliation
Cost of sales 79.3 72.0 77.6 84.1 87.8
Less:
Depriciation, depletion and amortisation (33.1) (25.5) (40.3) (40.3) (55.6)
Cost of raw materials purchased (5.9) (4.1) – – –
Change in stock 0.5 (0.3) (0.7) (1.2) (0.4)
Operating costs 40.8 42.1 36.6 42.6 31.8
G&A reconcillation
General and administrative expenses 15.1 14.0 13.8 12.1 12.1
Adjusted for:
Depreciation and amortisation (0.4) (0.1) (0.2) (0.2) (0.2)
G&A 14.7 13.9 13.6 11.9 11.9
Net debt reconcilliation
Long-term borrowings – 571.4 471.7 – –
Current portion of long-term borrowings 701.8 0.2 0.2 1,396.5 1,289.6
Less:
Cash and cash equivalents 143.3 150.4 161.7 233.6 165.2
DSRA / Escrow account 17.0 16.8 16.5 22.8 22.7
Net debt 541.5 404.4 293.7 1,140.1 1,101.7
Net cash flows from operating activities 13.5 33.1 (2.2) 102.2 117.4
Net cash used in investing activities (19.0) (26.5) (28.1) (15.8) (19.8)
Net cash (used in)/ from financing activities (1.7) (17.7) (41.6) (17.5) (10.9)
EBITDA margin 4 31.9% 35.7% 35.2% 57.9% 57.6%
Share price at end of period (US$) 0.05 0.09 0.09 0.03 0.07
Shares outstanding (`000s) 165,245 169,382 169,382 188,183 188,183
Options outstanding (`000s) 2,949 2,949 2,949 3,432 3,432
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
34
STRATEGIC REPORT
BOND MATURITY EXTENSION
During the second half of 2025 and early 2026, one of the Group’s key
priorities was to address the upcoming maturity of its Senior Secured
Notes (SSNs) and Senior Unsecured Notes (SUNs), both due on 30
June 2026, with the objective of supporting a more sustainable capital
structure and preserving financial flexibility.
In 2025, Group was required to pay accrued interest on the
outstanding Notes on 30 June and 31 December 2025 in accordance
with their terms and conditions, but those amounts remain unpaid.
The delay resulted from the continuing payment administration issue.
The Group has applied for the relevant regulatory and sanctions-
related licences required to make the interest payments and, in the
meantime, announced two consent fee payments on the terms set
out in the consent solicitation.
Management and the Board have engaged with noteholders
regarding a potential restructuring of the Notes and, on 30 March
2026, the Group announced that it had reached an agreement in
principle with an ad hoc group of beneficial owners of the SSNs and
SUNs regarding the key commercial terms of a proposed extension of
their maturity date to 31 December 2030 (the “Proposed
Transaction”), as described further below.
More specifically, the Proposed Transaction contemplates the
following:
• Extension. An extension of the maturity date of the SSNs and the SUNs
from 30 June 2026 to 31 December 2030.
• Cash coupon. Effective from 1 July 2026 an increase in the cash pay
interest rate on the SSNs from 5.00% to 5.50% per annum, and an
increase in the cash-pay interest rate on the SUNs from 1.00% to
2.00% per annum, together with the removal of the payment-in-kind
(PIK) interest rate on the SUNs.
• Capitalization of interest. An option for the Company, at the election
of the Board and based on working capital needs, to capitalise interest
payments, provided that such election cannot be made in respect of
two consecutive interest periods.
• PIK coupon accrued. As at the date of the Proposed Transaction, any
SUN payment-in-kind interest for each of the interest payment dates
falling on 30 June 2025, 31 December 2025 and 30 June 2026, and
which has not been allocated to the principal amount of the SUNs
through the clearing system, shall be deemed to be issued and
capitalized.
• Tender for repurchase of Notes. An invitation to holders of the SSNs
and SUNs to tender their Notes for repurchase by way of a reverse
Dutch auction:
- SSNs: subject to a consideration cap of up to US$30 million,
with an expected acceptable price range of 40c-60c (the
"Available Consideration");
- SUNs: subject to a consideration cap of the Available
Consideration (if any) remaining following the SSN Offer, with
an expected acceptable price range of 16c-22c;
- The final acceptable price ranges are subject to market
conditions and the circumstances of the Group at the time the
Proposed Transaction is implemented.
• Security. SUNs shall receive the same security as the SSNs, on a second
ranking basis.
• Warrants. The existing warrants shall expire on the date the Proposed
Transaction is implemented.
Implementation of the Proposed Transaction described above is
subject to the receipt of additional regulatory and sanctions-related
licences and approvals relevant to sanctioned noteholders. The Group
is working to obtain these as soon as practicable.
Pending receipt of such additional regulatory licences, the Group does
not expect to be in a position to make any interest payments with
respect to the SSNs and the SUNs.
Consent fees will continue to be payable to applicable non-sanctioned
noteholders with respect to interest payments that fall due (if any) on
the same basis as described in the Issuer's consent solicitation
memorandum dated 2 September 2025.
STRATEGIC REPORT
BOND MATURITY EXTENSION
During the second half of 2025 and early 2026, one of the Group’s key
priorities was to address the upcoming maturity of its Senior Secured
Notes (SSNs) and Senior Unsecured Notes (SUNs), both due on 30
June 2026, with the objective of supporting a more sustainable capital
structure and preserving financial flexibility.
In 2025, Group was required to pay accrued interest on the
outstanding Notes on 30 June and 31 December 2025 in accordance
with their terms and conditions, but those amounts remain unpaid.
The delay resulted from the continuing payment administration issue.
The Group has applied for the relevant regulatory and sanctions-
related licences required to make the interest payments and, in the
meantime, announced two consent fee payments on the terms set
out in the consent solicitation.
Management and the Board have engaged with noteholders
regarding a potential restructuring of the Notes and, on 30 March
2026, the Group announced that it had reached an agreement in
principle with an ad hoc group of beneficial owners of the SSNs and
SUNs regarding the key commercial terms of a proposed extension of
their maturity date to 31 December 2030 (the “Proposed
Transaction”), as described further below.
More specifically, the Proposed Transaction contemplates the
following:
• Extension. An extension of the maturity date of the SSNs and the SUNs
from 30 June 2026 to 31 December 2030.
• Cash coupon. Effective from 1 July 2026 an increase in the cash pay
interest rate on the SSNs from 5.00% to 5.50% per annum, and an
increase in the cash-pay interest rate on the SUNs from 1.00% to
2.00% per annum, together with the removal of the payment-in-kind
(PIK) interest rate on the SUNs.
• Capitalization of interest. An option for the Company, at the election
of the Board and based on working capital needs, to capitalise interest
payments, provided that such election cannot be made in respect of
two consecutive interest periods.
• PIK coupon accrued. As at the date of the Proposed Transaction, any
SUN payment-in-kind interest for each of the interest payment dates
falling on 30 June 2025, 31 December 2025 and 30 June 2026, and
which has not been allocated to the principal amount of the SUNs
through the clearing system, shall be deemed to be issued and
capitalized.
• Tender for repurchase of Notes. An invitation to holders of the SSNs
and SUNs to tender their Notes for repurchase by way of a reverse
Dutch auction:
- SSNs: subject to a consideration cap of up to US$30 million,
with an expected acceptable price range of 40c-60c (the
"Available Consideration");
- SUNs: subject to a consideration cap of the Available
Consideration (if any) remaining following the SSN Offer, with
an expected acceptable price range of 16c-22c;
- The final acceptable price ranges are subject to market
conditions and the circumstances of the Group at the time the
Proposed Transaction is implemented.
• Security. SUNs shall receive the same security as the SSNs, on a second
ranking basis.
• Warrants. The existing warrants shall expire on the date the Proposed
Transaction is implemented.
Implementation of the Proposed Transaction described above is
subject to the receipt of additional regulatory and sanctions-related
licences and approvals relevant to sanctioned noteholders. The Group
is working to obtain these as soon as practicable.
Pending receipt of such additional regulatory licences, the Group does
not expect to be in a position to make any interest payments with
respect to the SSNs and the SUNs.
Consent fees will continue to be payable to applicable non-sanctioned
noteholders with respect to interest payments that fall due (if any) on
the same basis as described in the Issuer's consent solicitation
memorandum dated 2 September 2025.
35
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
ESG REVIEW
Our ESG strategy and targets
Transitioning to cleaner energy, empowering people, and upholding transparency and ethics.
Our commitments Material ESG topics Alignment with the UN SDGs Our medium-term goals
Environment
Our focus: Environmental protection and climate action
Contribute to the shift toward
cleaner energy while minimising
the environmental impact of our
operations
Climate action/GHG emissions/
Energy efficiency/ Emissions,
effluents, waste and resource
use/ Land Use and Biodiversity
• Maintain strong Environmental
leadership to ensure safe
operations and minimise
environmental impacts.
• Ensure full compliance with
emissions, effluents and wastes
regulations and limits, adhering
to the highest environmental
standards.
Social
Our focus: Safe Operations
Ensure the safety of our
employees, contractors, and
communities, adhere to the
highest industry standards and
continuously improve our safety
culture
Occupational Health and Safety • Enhance Health and Safety
practices to safeguard
employees, contractors, and
neighbouring communities.
Our focus: Empowering people and communities
Foster an inclusive, and diverse
workplace while supporting local
economic growth and advancing
social development
Community Relations/ Human
Capital
• Support local development
through funding, employment,
and sustainable partnerships.
• Advance diversity and talent
development with inclusive
initiatives and skill-building
programmes.
Governance
Our focus: Business Ethics
Maintain strong corporate
governance, uphold strict
compliance standards, and foster
a culture rooted in ethics and
integrity
Bribery and Corruption • Continue to develop
environmental and climate
related disclosures.
• Maintain a zero-tolerance
approach to ethical breaches
and human rights violations.
In 2025, the Company decided to pause the update of its Sustainalytics ESG Risk Rating while continuing to strengthen its internal ESG
management practices and disclosures.
In 2025, the Company continued CDP disclosures and received a score of B for both Climate and Water, consistent with 2024 and corresponding
to the Management level.
ESG REVIEW
Our ESG strategy and targets
Transitioning to cleaner energy, empowering people, and upholding transparency and ethics.
Our commitments Material ESG topics Alignment with the UN SDGs Our medium-term goals
Environment
Our focus: Environmental protection and climate action
Contribute to the shift toward
cleaner energy while minimising
the environmental impact of our
operations
Climate action/GHG emissions/
Energy efficiency/ Emissions,
effluents, waste and resource
use/ Land Use and Biodiversity
• Maintain strong Environmental
leadership to ensure safe
operations and minimise
environmental impacts.
• Ensure full compliance with
emissions, effluents and wastes
regulations and limits, adhering
to the highest environmental
standards.
Social
Our focus: Safe Operations
Ensure the safety of our
employees, contractors, and
communities, adhere to the
highest industry standards and
continuously improve our safety
culture
Occupational Health and Safety • Enhance Health and Safety
practices to safeguard
employees, contractors, and
neighbouring communities.
Our focus: Empowering people and communities
Foster an inclusive, and diverse
workplace while supporting local
economic growth and advancing
social development
Community Relations/ Human
Capital
• Support local development
through funding, employment,
and sustainable partnerships.
• Advance diversity and talent
development with inclusive
initiatives and skill-building
programmes.
Governance
Our focus: Business Ethics
Maintain strong corporate
governance, uphold strict
compliance standards, and foster
a culture rooted in ethics and
integrity
Bribery and Corruption • Continue to develop
environmental and climate
related disclosures.
• Maintain a zero-tolerance
approach to ethical breaches
and human rights violations.
In 2025, the Company decided to pause the update of its Sustainalytics ESG Risk Rating while continuing to strengthen its internal ESG
management practices and disclosures.
In 2025, the Company continued CDP disclosures and received a score of B for both Climate and Water, consistent with 2024 and corresponding
to the Management level.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
36
STRATEGIC REPORT
Material ESG topics
Management of Material Topics
To ensure our ESG reporting continues to address the issues most
relevant to our stakeholders, we periodically review our materiality
assessments. These assessments provide valuable insights that form
the foundation of our ESG reporting and strategy.
Through this process, we have identified seven key ESG material
topics that are fundamental to achieving our strategic objectives.
These topics have been prioritised based on their relevance to our
business operations and their significance to stakeholders, aligning
with the principle of double materiality.
Double materiality reflects both the impact of sustainable
development on our organisation and the impact of our operations on
sustainable development. These material topics represent areas that
may significantly influence our financial and operational performance,
as well as the societies and ecosystems in the regions where we
operate. Each material ESG topic also represents a potential ESG risk
for our business, reinforcing their importance in shaping our
management approach and long-term resilience.
In 2025, we initiated a review of our ESG policies, practices and
governance framework as part of a broader internal transformation
programme. As a result, the previously identified material ESG topics
continue to guide our approach to sustainability and risk
management.
Assessing material ESG topics
STEP 1: Analyse the internal and external environment
Regulatory and Industry Analysis
• Oil and gas industry associations (IPIECA, API, IOGP)
• Environmental, labour laws, safety standards, national reporting
requirements
Internal Data Collection
• Environmental reports, records
• Safety records
• Governance practices
Analysis of international standards and ESG rating agencies
• Rating agencies (Sustainalytics, MSCI, Refinitiv, EcoVadis, ISS)
• Global reporting initiatives (GRI, SDGs, CDP, SASB, IFRS)
• Engagement with stakeholders
• Regular direct engagement with stakeholders
• Membership in industry associations (KazEnergy, ESG-Club)
• Global leading Oil and Gas companies
Analysis of media, research, consulting, audit companies
• Articles
• Researchers, consultants, auditors (McKinsey, KPMG, EY, PWC, BCG,
S&P, etc.)
STEP 2: Identify actual and potential impact
Forming a pool of topics that reflect the industry’s characteristics
STEP 3: Assess the significance of the impact
STEP 4: Select material issues for reporting
STEP 5: Performance, reporting, periodic updates of the materiality
analysis
ESG Management
At Nostrum, we maintain corporate governance practices designed to
support effective oversight of ESG matters. Our governance structure
integrates ESG-related risks, impacts and opportunities into business
decision-making across the Company.
During 2025, management began reviewing the Company’s ESG
policies, procedures and governance arrangements to ensure they
remain aligned with the Company’s evolving strategy and operational
priorities. This process is intended to further strengthen ESG
management practices and support the continued integration of
sustainability considerations into the Company’s activities.
In order to enact the principle of senior management engagement in
sustainability management, key performance indicators (KPIs) remain
part of the Company’s management framework. See pages 84 and 87.
Material ESG
issues
Impact on Nostrum’s business
Climate action / GHG
emissions/ energy
efficiency
Community
relations
Emissions, effluents,
waste and resource use
Occupational health
and safety
Bribery
and
corruption
Land use and
biodiversity
Human
capital
Moderate Very
high
Moderate Very
high
Importance to Nostrum’s stakeholders
STRATEGIC REPORT
Material ESG topics
Management of Material Topics
To ensure our ESG reporting continues to address the issues most
relevant to our stakeholders, we periodically review our materiality
assessments. These assessments provide valuable insights that form
the foundation of our ESG reporting and strategy.
Through this process, we have identified seven key ESG material
topics that are fundamental to achieving our strategic objectives.
These topics have been prioritised based on their relevance to our
business operations and their significance to stakeholders, aligning
with the principle of double materiality.
Double materiality reflects both the impact of sustainable
development on our organisation and the impact of our operations on
sustainable development. These material topics represent areas that
may significantly influence our financial and operational performance,
as well as the societies and ecosystems in the regions where we
operate. Each material ESG topic also represents a potential ESG risk
for our business, reinforcing their importance in shaping our
management approach and long-term resilience.
In 2025, we initiated a review of our ESG policies, practices and
governance framework as part of a broader internal transformation
programme. As a result, the previously identified material ESG topics
continue to guide our approach to sustainability and risk
management.
Assessing material ESG topics
STEP 1: Analyse the internal and external environment
Regulatory and Industry Analysis
• Oil and gas industry associations (IPIECA, API, IOGP)
• Environmental, labour laws, safety standards, national reporting
requirements
Internal Data Collection
• Environmental reports, records
• Safety records
• Governance practices
Analysis of international standards and ESG rating agencies
• Rating agencies (Sustainalytics, MSCI, Refinitiv, EcoVadis, ISS)
• Global reporting initiatives (GRI, SDGs, CDP, SASB, IFRS)
• Engagement with stakeholders
• Regular direct engagement with stakeholders
• Membership in industry associations (KazEnergy, ESG-Club)
• Global leading Oil and Gas companies
Analysis of media, research, consulting, audit companies
• Articles
• Researchers, consultants, auditors (McKinsey, KPMG, EY, PWC, BCG,
S&P, etc.)
STEP 2: Identify actual and potential impact
Forming a pool of topics that reflect the industry’s characteristics
STEP 3: Assess the significance of the impact
STEP 4: Select material issues for reporting
STEP 5: Performance, reporting, periodic updates of the materiality
analysis
ESG Management
At Nostrum, we maintain corporate governance practices designed to
support effective oversight of ESG matters. Our governance structure
integrates ESG-related risks, impacts and opportunities into business
decision-making across the Company.
During 2025, management began reviewing the Company’s ESG
policies, procedures and governance arrangements to ensure they
remain aligned with the Company’s evolving strategy and operational
priorities. This process is intended to further strengthen ESG
management practices and support the continued integration of
sustainability considerations into the Company’s activities.
In order to enact the principle of senior management engagement in
sustainability management, key performance indicators (KPIs) remain
part of the Company’s management framework. See pages 84 and 87.
Material ESG
issues
Impact on Nostrum’s business
Climate action / GHG
emissions/ energy
efficiency
Community
relations
Emissions, effluents,
waste and resource use
Occupational health
and safety
Bribery
and
corruption
Land use and
biodiversity
Human
capital
Moderate Very
high
Moderate Very
high
Importance to Nostrum’s stakeholders
ESG REVIEW
37 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Safe operations
The safety of our employees and contractors remains a top priority for Nostrum, and we are
committed to maintaining high health, safety and environmental standards in line with
international best practice. In 2025, we continued to strengthen our HSE management system and
safety culture across operations, delivering stable safety performance with zero fatalities and no
Lost Time Incidents recorded during the year.
2025 highlights
Safety culture
Nostrum places the highest priority on safety and compliance with
established standards. Our approach is shaped by the collective
attitudes, values, and understanding of risk shared by employees
across the organisation, workplace, and wider community.
At Nostrum, building and maintaining a strong safety culture is
fundamental to protecting our people, improving operational
performance, and safeguarding the reputation of our brand. By
putting safety first, we demonstrate our commitment to providing
a safe and healthy working environment for all stakeholders. This
commitment helps prevent workplace incidents and injuries,
strengthens trust and confidence within our teams, and supports a
more resilient organisation. In addition, a mature safety culture
contributes to higher productivity, lower operating costs, and
stronger employee morale. Ultimately, a comprehensive safety
culture reflects our long-term commitment to employee well-being
and sustainable business performance.
Nostrum’s safety and environmental performance is built on four
core pillars: HSE leadership, incident management, process safety
and asset integrity, and contractor HSE management.
Each pillar plays a critical role in maintaining a safe, secure and
environmentally responsible workplace. HSE leadership embeds
safety at every level of the Company, while robust incident
investigation helps us learn from experience and continuously
improve our systems and processes. Process safety supports the
safe and reliable operation of our assets, and effective contractor
HSE management ensures alignment with Nostrum’s safety values
and expectations.
In addition, we enforce the Golden Rules, provide extensive
training on safe working practices, and apply a comprehensive
governance framework, including alignment with the TCFD
Governance recommendations (pages 56 –62). Our HSE
Management System standards and procedures are regularly
reviewed, updated, and implemented across the organisation.
In 2025 the following procedures have been developed, updated
and issued:
• Water Policy
• Hot works procedure
• Road safety procedure
• Biodiversity Policy
• Passenger Intervention Policy
• Drug, alcohol and smoking Policy
• Medical сheck up procedure
• Safety signs procedure
• Radiation safety
• Incident Management procedure
2021 2022 2023 2024 2025
TRIs (incidents per
million man-hours) 2.42 1.56 0.75 0.63 0.92
Target TRIR (incidents
per million man-
hours)
3.0 2.0 1.9 1.9 2.0
LTIs (incidents per
million man-hours) 0.81 - 0.37 - -
Target LTIR (incidents
per million man-
hours)
1.3 1.0 0.9 1.05 1.15
RTIs (incidents per
million km driven) 1.46 - - 0.5 0.21
Target RTI (incidents
per million km
driven)
0.8 0.8 0.75 0.75 1.0
Risk Management
In 2025, the Workplace Hazard Observation Programme continued
as part of the campaign launched in 2019. The campaign is
designed to train all employees to intervene and report whenever
they observe unsafe conditions or hazardous behaviour. During the
year, the Workplace Hazard Procedure was implemented, and
workshops were delivered to all staff.
Whenever a hazard is identified, any employee may complete a
Hazard Observation Card to report unsafe workplace conditions,
safe or unsafe behaviours observed during work activities, and
suggestions for HSE improvement.
To encourage active participation, Nostrum maintains an HSE
Incentive Scheme and presents HSE awards, including promotional
items, to employees who submit the most valuable hazard
observations.
A comprehensive Stop Work Policy is in place, granting every
employee the authority to stop any task or job assignment if they
believe it poses an immediate risk to their own safety or the safety
of others. This responsibility applies at all levels of the organisation,
from senior management to frontline personnel. If there is a
disagreement between the person intervening and their direct
manager, the matter must be escalated immediately to the next
management level. The Stop Work Policy supports early
identification of unsafe conditions by encouraging employees to
remain vigilant and proactive in recognizing hazards.
To ensure effective implementation of the Golden Rules, Nostrum
applies strict consequence management based on a risk-based
approach. This framework helps employees and leaders respond
appropriately when unsafe or unacceptable workplace behaviour is
observed or reported. Serious breaches of safety requirements
may result in immediate dismissal for both employees and
contractors.
Fatalities Zero
Lost Time Incidents Frequency Zero
Road Traffic Incidents 0.21
Total Recordable Incidents Frequency 0.92
37 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Safe operations
The safety of our employees and contractors remains a top priority for Nostrum, and we are
committed to maintaining high health, safety and environmental standards in line with
international best practice. In 2025, we continued to strengthen our HSE management system and
safety culture across operations, delivering stable safety performance with zero fatalities and no
Lost Time Incidents recorded during the year.
2025 highlights
Safety culture
Nostrum places the highest priority on safety and compliance with
established standards. Our approach is shaped by the collective
attitudes, values, and understanding of risk shared by employees
across the organisation, workplace, and wider community.
At Nostrum, building and maintaining a strong safety culture is
fundamental to protecting our people, improving operational
performance, and safeguarding the reputation of our brand. By
putting safety first, we demonstrate our commitment to providing
a safe and healthy working environment for all stakeholders. This
commitment helps prevent workplace incidents and injuries,
strengthens trust and confidence within our teams, and supports a
more resilient organisation. In addition, a mature safety culture
contributes to higher productivity, lower operating costs, and
stronger employee morale. Ultimately, a comprehensive safety
culture reflects our long-term commitment to employee well-being
and sustainable business performance.
Nostrum’s safety and environmental performance is built on four
core pillars: HSE leadership, incident management, process safety
and asset integrity, and contractor HSE management.
Each pillar plays a critical role in maintaining a safe, secure and
environmentally responsible workplace. HSE leadership embeds
safety at every level of the Company, while robust incident
investigation helps us learn from experience and continuously
improve our systems and processes. Process safety supports the
safe and reliable operation of our assets, and effective contractor
HSE management ensures alignment with Nostrum’s safety values
and expectations.
In addition, we enforce the Golden Rules, provide extensive
training on safe working practices, and apply a comprehensive
governance framework, including alignment with the TCFD
Governance recommendations (pages 56 –62). Our HSE
Management System standards and procedures are regularly
reviewed, updated, and implemented across the organisation.
In 2025 the following procedures have been developed, updated
and issued:
• Water Policy
• Hot works procedure
• Road safety procedure
• Biodiversity Policy
• Passenger Intervention Policy
• Drug, alcohol and smoking Policy
• Medical сheck up procedure
• Safety signs procedure
• Radiation safety
• Incident Management procedure
2021 2022 2023 2024 2025
TRIs (incidents per
million man-hours) 2.42 1.56 0.75 0.63 0.92
Target TRIR (incidents
per million man-
hours)
3.0 2.0 1.9 1.9 2.0
LTIs (incidents per
million man-hours) 0.81 - 0.37 - -
Target LTIR (incidents
per million man-
hours)
1.3 1.0 0.9 1.05 1.15
RTIs (incidents per
million km driven) 1.46 - - 0.5 0.21
Target RTI (incidents
per million km
driven)
0.8 0.8 0.75 0.75 1.0
Risk Management
In 2025, the Workplace Hazard Observation Programme continued
as part of the campaign launched in 2019. The campaign is
designed to train all employees to intervene and report whenever
they observe unsafe conditions or hazardous behaviour. During the
year, the Workplace Hazard Procedure was implemented, and
workshops were delivered to all staff.
Whenever a hazard is identified, any employee may complete a
Hazard Observation Card to report unsafe workplace conditions,
safe or unsafe behaviours observed during work activities, and
suggestions for HSE improvement.
To encourage active participation, Nostrum maintains an HSE
Incentive Scheme and presents HSE awards, including promotional
items, to employees who submit the most valuable hazard
observations.
A comprehensive Stop Work Policy is in place, granting every
employee the authority to stop any task or job assignment if they
believe it poses an immediate risk to their own safety or the safety
of others. This responsibility applies at all levels of the organisation,
from senior management to frontline personnel. If there is a
disagreement between the person intervening and their direct
manager, the matter must be escalated immediately to the next
management level. The Stop Work Policy supports early
identification of unsafe conditions by encouraging employees to
remain vigilant and proactive in recognizing hazards.
To ensure effective implementation of the Golden Rules, Nostrum
applies strict consequence management based on a risk-based
approach. This framework helps employees and leaders respond
appropriately when unsafe or unacceptable workplace behaviour is
observed or reported. Serious breaches of safety requirements
may result in immediate dismissal for both employees and
contractors.
Fatalities Zero
Lost Time Incidents Frequency Zero
Road Traffic Incidents 0.21
Total Recordable Incidents Frequency 0.92
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
38
STRATEGIC REPORT
Consequence management is structured in two levels, with the most
severe level—leading to immediate dismissal—applied in cases such
as alcohol or drug abuse. Less severe violations, such as failure to
wear a seat belt, may initially result in a warning, followed by
dismissal in the event of a repeat offence.
Incidence rates and investigation
In 2025, our Total Recordable Incidents Frequency (TRIF) rate
increased slightly to 0.92 per million man-hours, representing a 46%
rise compared with 2024. No Lost Time Incidents (LTIs) were recorded
in 2025, and we are pleased to announce that the Company has
achieved more than two years of LTI-free operations.
One Road Traffic Incident (RTI) occurred in 2025 during contractor
operations; no injuries were sustained and only minor vehicle damage
was reported. The incident was thoroughly investigated and
preventive measures were implemented to reduce the risk of
recurrence.
Nostrum recognizes that its operations involve inherent hazards. The
Group’s leadership, employees and contractors are trained with the
clear understanding that incidents are not inevitable, and we aim to
build a culture in which strong safety awareness and proactive risk
controls make a zero-incident performance both realistic and
achievable.
For every incident, we follow our investigation procedure using the
“Five Whys” and “Why Tree” methodologies to identify underlying
root causes, and we implement SMART corrective actions to minimise
recurrence and prevent future risks.
In 2025, the Company delivered incident investigation training for 19
employees from the production division. The course covered a range
of incident investigation tools, including the 5 Whys and Cause Tree
Analysis, and was supported by practical exercises to strengthen
participants’ ability to identify root causes and contribute to effective
corrective actions.
Contractors
Nostrum expects its contractors and suppliers to meet the same high
standards that apply to our employees. Therefore, robust contractor
selection, clear communication, training in our safety culture and
practices, and effective performance monitoring are all essential to
maintaining the high level of safety upheld across our operation.
In 2025, five contractors were audited against contractual HSE
requirements to assess compliance with Nostrum’s HSE management
system.
Nostrum is committed to promoting safe behaviour among
contractors and has implemented a broad range of measures to
ensure that activities at our facilities are carried out in full compliance
with local legislation and Nostrum’s internal rules and standards.
In April 2025, we held our regular annual Contractor HSE Forum,
bringing together contractor CEOs, management teams, and HSE
representatives to review HSE performance, share results, and
communicate key lessons learned.
Department Managers acting as Contract Owners also conduct
contractor kick-off meetings, as well as regular progress and
performance review sessions, to monitor and improve contractors’
HSE performance.
We remain committed to ongoing engagement and support to
strengthen our HSE practices and maintain the highest safety
standards for everyone involved in our operations.
To support effective implementation of the Golden Rules, Nostrum
applies strict consequence management based on a risk-based
approach. This framework enables employees and leaders to respond
consistently and appropriately when unsafe or unacceptable
behaviour is observed or reported. Serious breaches of safety
requirements may result in immediate dismissal for both employees
and contractors.
Consequence management is structured in two levels, with the most
severe level—resulting in immediate dismissal—applied in cases such
as alcohol or drug abuse. Less severe violations, such as failure to
wear a seat belt, may result in an initial warning, followed by dismissal
in the event of a repeated breach.
Promoting a safer workplace
As part of the campaign launched in 2019, the Workplace Hazard
Observation (WHO) Programme remained an important tool for
strengthening proactive safety behaviour across the Company. The
programme is aimed at training all employees to intervene and report
whenever they observe unsafe conditions or hazardous behaviour. To
support this, the Workplace Hazard Procedure was implemented and
awareness workshops were delivered to all staff.
Whenever a hazard is identified, any employee can complete a Hazard
Observation Card to report unsafe workplace conditions, safe or
unsafe behaviours observed during work activities, and suggestions
for HSE improvement. This approach encourages active employee
involvement, timely hazard identification, and continuous
improvement of HSE performance.
To reinforce participation and recognition, Nostrum maintains an HSE
Incentive Scheme and presents HSE awards, including promotional
items, to employees who submit the most valuable hazard
observations. This recognition helps promote a stronger reporting
culture, increases workforce engagement, and supports the
development of a more proactive and safety-conscious workplace.
Golden Rules
1) Seatbelts must always be worn by the driver and all passengers.
2) Do not exceed the speed limit and reduce speed for impaired road
conditions.
3) Do not use phones or operate devices while operating a motor
vehicle
4) Alcohol and drugs of any kind (excluding approved medicines) are
forbidden.
5) Where required, work with a valid permit.
6) Obtain authorisation before entering a confined space.
7) Confirm that hazardous energy sources have been isolated,
enclosed and tagged.
8) Obtain authorisation before overriding or disabling safety
controls.
9) Never walk under a suspended load.
10) Protect yourself against a fall when working at heights.
For every service contract in the Company at the time a purchase
requisition is raised, a Contract HSE Risk Assessment relevant to the
work is performed and documented by the Contract Holder. This
process is more fully described below:
Stage 1 – Vendor Qualification
To be a qualified bidder, vendors must meet our qualification
standards. This process is meant to help us select those vendors that
both adhere to and support our basic HSE culture. The Vendor
Assessment stage helps to assess the corporate capability of the
vendor to deliver the required HSE Performance.
Manhours worked in 2025 % of total
Nostrum employees: 1,115,005 34%
Contractors: 2,150,046 66%
STRATEGIC REPORT
Consequence management is structured in two levels, with the most
severe level—leading to immediate dismissal—applied in cases such
as alcohol or drug abuse. Less severe violations, such as failure to
wear a seat belt, may initially result in a warning, followed by
dismissal in the event of a repeat offence.
Incidence rates and investigation
In 2025, our Total Recordable Incidents Frequency (TRIF) rate
increased slightly to 0.92 per million man-hours, representing a 46%
rise compared with 2024. No Lost Time Incidents (LTIs) were recorded
in 2025, and we are pleased to announce that the Company has
achieved more than two years of LTI-free operations.
One Road Traffic Incident (RTI) occurred in 2025 during contractor
operations; no injuries were sustained and only minor vehicle damage
was reported. The incident was thoroughly investigated and
preventive measures were implemented to reduce the risk of
recurrence.
Nostrum recognizes that its operations involve inherent hazards. The
Group’s leadership, employees and contractors are trained with the
clear understanding that incidents are not inevitable, and we aim to
build a culture in which strong safety awareness and proactive risk
controls make a zero-incident performance both realistic and
achievable.
For every incident, we follow our investigation procedure using the
“Five Whys” and “Why Tree” methodologies to identify underlying
root causes, and we implement SMART corrective actions to minimise
recurrence and prevent future risks.
In 2025, the Company delivered incident investigation training for 19
employees from the production division. The course covered a range
of incident investigation tools, including the 5 Whys and Cause Tree
Analysis, and was supported by practical exercises to strengthen
participants’ ability to identify root causes and contribute to effective
corrective actions.
Contractors
Nostrum expects its contractors and suppliers to meet the same high
standards that apply to our employees. Therefore, robust contractor
selection, clear communication, training in our safety culture and
practices, and effective performance monitoring are all essential to
maintaining the high level of safety upheld across our operation.
In 2025, five contractors were audited against contractual HSE
requirements to assess compliance with Nostrum’s HSE management
system.
Nostrum is committed to promoting safe behaviour among
contractors and has implemented a broad range of measures to
ensure that activities at our facilities are carried out in full compliance
with local legislation and Nostrum’s internal rules and standards.
In April 2025, we held our regular annual Contractor HSE Forum,
bringing together contractor CEOs, management teams, and HSE
representatives to review HSE performance, share results, and
communicate key lessons learned.
Department Managers acting as Contract Owners also conduct
contractor kick-off meetings, as well as regular progress and
performance review sessions, to monitor and improve contractors’
HSE performance.
We remain committed to ongoing engagement and support to
strengthen our HSE practices and maintain the highest safety
standards for everyone involved in our operations.
To support effective implementation of the Golden Rules, Nostrum
applies strict consequence management based on a risk-based
approach. This framework enables employees and leaders to respond
consistently and appropriately when unsafe or unacceptable
behaviour is observed or reported. Serious breaches of safety
requirements may result in immediate dismissal for both employees
and contractors.
Consequence management is structured in two levels, with the most
severe level—resulting in immediate dismissal—applied in cases such
as alcohol or drug abuse. Less severe violations, such as failure to
wear a seat belt, may result in an initial warning, followed by dismissal
in the event of a repeated breach.
Promoting a safer workplace
As part of the campaign launched in 2019, the Workplace Hazard
Observation (WHO) Programme remained an important tool for
strengthening proactive safety behaviour across the Company. The
programme is aimed at training all employees to intervene and report
whenever they observe unsafe conditions or hazardous behaviour. To
support this, the Workplace Hazard Procedure was implemented and
awareness workshops were delivered to all staff.
Whenever a hazard is identified, any employee can complete a Hazard
Observation Card to report unsafe workplace conditions, safe or
unsafe behaviours observed during work activities, and suggestions
for HSE improvement. This approach encourages active employee
involvement, timely hazard identification, and continuous
improvement of HSE performance.
To reinforce participation and recognition, Nostrum maintains an HSE
Incentive Scheme and presents HSE awards, including promotional
items, to employees who submit the most valuable hazard
observations. This recognition helps promote a stronger reporting
culture, increases workforce engagement, and supports the
development of a more proactive and safety-conscious workplace.
Golden Rules
1) Seatbelts must always be worn by the driver and all passengers.
2) Do not exceed the speed limit and reduce speed for impaired road
conditions.
3) Do not use phones or operate devices while operating a motor
vehicle
4) Alcohol and drugs of any kind (excluding approved medicines) are
forbidden.
5) Where required, work with a valid permit.
6) Obtain authorisation before entering a confined space.
7) Confirm that hazardous energy sources have been isolated,
enclosed and tagged.
8) Obtain authorisation before overriding or disabling safety
controls.
9) Never walk under a suspended load.
10) Protect yourself against a fall when working at heights.
For every service contract in the Company at the time a purchase
requisition is raised, a Contract HSE Risk Assessment relevant to the
work is performed and documented by the Contract Holder. This
process is more fully described below:
Stage 1 – Vendor Qualification
To be a qualified bidder, vendors must meet our qualification
standards. This process is meant to help us select those vendors that
both adhere to and support our basic HSE culture. The Vendor
Assessment stage helps to assess the corporate capability of the
vendor to deliver the required HSE Performance.
Manhours worked in 2025 % of total
Nostrum employees: 1,115,005 34%
Contractors: 2,150,046 66%
ESG REVIEW
39 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Stage 2 – Contract HSE requirements
HSE requirements are specified in Appendix to Contract which is part
of all contracts. Two types of Appendices with HSE requirements are
developed: for high risk level and for works/services with low risk
level.
Stage 3 – Contractor Engagement
After Tender stage is over and when contract is awarded, prior to the
commencement of work, a Contractor Kick-off Meeting is held, The
objectives of the meeting is to provide foundations for good
performance including HSE from the start of the contract.
For all high risk contracts the Pre-mobilisation HSE Audit is conducted.
Stage 4 – Contract execution
Contractor HSE Performance is monitored during contract execution.
Worksite HSE Inspections and HSE Management System Audits are
conducted to ensure compliance with Contract HSE Requirements.
The regular meeting to communicate with Contractors are conducted
to discuss their HSE performance and to provide any support to
achieve the HSE goals.
One of the tools to evaluate and monitor Contractor HSE Performance
is Monthly scorecard. The Monthly Scorecard comprises of minimum
leading and lagging HSE indicators. The data are used to identify areas
for continuous improvements in Contractor HSE Management System
and to review the effectiveness of Contractor HSE Management
processes against the other Contractors.
Stage 5 – Contract Close-out
Upon delivery of the contract a HSE performance review is conducted
to identify both positive and negative lessons learned that may be
used for a variety of purposes including pre-qualification and
identifying areas for improvements
Within one month following contract expiry the Contract close-out
meetings are conducted to discuss and reflect on Contractor’s HSE
performance during the execution of the work.
Contract HSE Performance feedback is documented and saved on
vendor’s database. The results of the feedback evaluation are
considered while contract prolongation or for any new tenders.
Road Safety
In 2025, Nostrum continued to carry out and strengthen a range of
long-established activities implemented over previous years:
• Planned /unplanned inspections of the technical conditions of the
vehicles at Nostrum facilities by our employees and Contractor
representatives.
• Road safety inductions, training and safety stand-downs are being held
on a permanent basis with Contractor personnel.
• Nostrum enforces compliance with the Road Safety Procedure,
Journey Management Plan, and the procedure for organizing and
performing oversized cargo transportation, ensuring alignment with
Company road safety requirements.
• Routes for the transportation of oversized cargo are pre-coordinated
(and escorted where required) to ensure safe movement across
Nostrum facilities.
• The Company regularly checks the traffic safety condition of roads,
bridges, railway crossings, and other road infrastructure within facility
boundaries and along routes to and from Nostrum production sites.
• Planned and unplanned inspections of vehicle technical condition are
carried out at Nostrum facilities by Company personnel together with
contractor representatives.
• Compliance with pre-trip medical examinations for Company and
contractor drivers is systematically monitored.
• Road safety inductions, training sessions, and safety stand-downs are
conducted on an ongoing basis for contractor personnel.
• Regular ad hoc road safety inspections are also performed to verify
compliance with key requirements such as speed limits, seat belt use,
and other road safety rules.
Nostrum also enhanced road safety controls by installing the IVMS
system on Tauekel company gas trucks to support safer
transportation operations. The system enables monitoring of the
driver’s condition, driving and vehicle handling parameters,
compliance with the Golden Rules (including driving-related
violations), road conditions, and signs of driver fatigue. Nostrum will
continue the full-scale rollout and use of the IVMS system as part of its
ongoing efforts to strengthen road safety monitoring and prevent
transport-related incidents.
In-house HSE training and examination process
Nostrum delivers HSE training and competency assessments to
strengthen the HSE knowledge and skills of both Nostrum employees
and contractor personnel engaged in safety-critical activities. In
addition to in-house programmes, Nostrum also provides
occupational safety training through the Alim Training Centre. During
2025, 1,088 employees completed advanced HSE training.
In-house HSE training
2021 2022 2023 2024 2025
H2S rules 329 254 265 357 317
Industrial safety
rules
263 238 284 423 465
Labour safety
rules
224 223 253 322 306
Total 816 715 802 1,102 1,088
HSE communication and awareness
Nostrum’s HSE training efforts are further supported by site-based
safety engineers, who conduct regular briefings and practical coaching
sessions for contractor personnel, including training on the proper
completion of Job Safety Analysis (JSA) documentation. They also hold
monthly safety meetings with production personnel on various
occupational safety topics in accordance with the 2025 TM calendar.
In addition, medical personnel within the HSE Department deliver
internal training that includes practical, hands-on exercises covering a
range of emergency response topics. These sessions include first aid,
pre-medical assistance, and response actions under different
emergency scenarios. Together, these activities strengthen workforce
competence, improve preparedness, and support the development of
a proactive safety culture across Nostrum’s operations.
In 2025, HSE Workshops were carried out for field personnel to
promote awareness on the following topics:
• Contractor Safety
• Risk Management
• Road Safety and Jorney Management
• Waste Management
• First Aid
• Working on heights
• HSE Responsibility
• COSHH
• Fire Safety
• Incident Management
• Pinch points
• Slips and Trips
• JSA
• Stress Management
39 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Stage 2 – Contract HSE requirements
HSE requirements are specified in Appendix to Contract which is part
of all contracts. Two types of Appendices with HSE requirements are
developed: for high risk level and for works/services with low risk
level.
Stage 3 – Contractor Engagement
After Tender stage is over and when contract is awarded, prior to the
commencement of work, a Contractor Kick-off Meeting is held, The
objectives of the meeting is to provide foundations for good
performance including HSE from the start of the contract.
For all high risk contracts the Pre-mobilisation HSE Audit is conducted.
Stage 4 – Contract execution
Contractor HSE Performance is monitored during contract execution.
Worksite HSE Inspections and HSE Management System Audits are
conducted to ensure compliance with Contract HSE Requirements.
The regular meeting to communicate with Contractors are conducted
to discuss their HSE performance and to provide any support to
achieve the HSE goals.
One of the tools to evaluate and monitor Contractor HSE Performance
is Monthly scorecard. The Monthly Scorecard comprises of minimum
leading and lagging HSE indicators. The data are used to identify areas
for continuous improvements in Contractor HSE Management System
and to review the effectiveness of Contractor HSE Management
processes against the other Contractors.
Stage 5 – Contract Close-out
Upon delivery of the contract a HSE performance review is conducted
to identify both positive and negative lessons learned that may be
used for a variety of purposes including pre-qualification and
identifying areas for improvements
Within one month following contract expiry the Contract close-out
meetings are conducted to discuss and reflect on Contractor’s HSE
performance during the execution of the work.
Contract HSE Performance feedback is documented and saved on
vendor’s database. The results of the feedback evaluation are
considered while contract prolongation or for any new tenders.
Road Safety
In 2025, Nostrum continued to carry out and strengthen a range of
long-established activities implemented over previous years:
• Planned /unplanned inspections of the technical conditions of the
vehicles at Nostrum facilities by our employees and Contractor
representatives.
• Road safety inductions, training and safety stand-downs are being held
on a permanent basis with Contractor personnel.
• Nostrum enforces compliance with the Road Safety Procedure,
Journey Management Plan, and the procedure for organizing and
performing oversized cargo transportation, ensuring alignment with
Company road safety requirements.
• Routes for the transportation of oversized cargo are pre-coordinated
(and escorted where required) to ensure safe movement across
Nostrum facilities.
• The Company regularly checks the traffic safety condition of roads,
bridges, railway crossings, and other road infrastructure within facility
boundaries and along routes to and from Nostrum production sites.
• Planned and unplanned inspections of vehicle technical condition are
carried out at Nostrum facilities by Company personnel together with
contractor representatives.
• Compliance with pre-trip medical examinations for Company and
contractor drivers is systematically monitored.
• Road safety inductions, training sessions, and safety stand-downs are
conducted on an ongoing basis for contractor personnel.
• Regular ad hoc road safety inspections are also performed to verify
compliance with key requirements such as speed limits, seat belt use,
and other road safety rules.
Nostrum also enhanced road safety controls by installing the IVMS
system on Tauekel company gas trucks to support safer
transportation operations. The system enables monitoring of the
driver’s condition, driving and vehicle handling parameters,
compliance with the Golden Rules (including driving-related
violations), road conditions, and signs of driver fatigue. Nostrum will
continue the full-scale rollout and use of the IVMS system as part of its
ongoing efforts to strengthen road safety monitoring and prevent
transport-related incidents.
In-house HSE training and examination process
Nostrum delivers HSE training and competency assessments to
strengthen the HSE knowledge and skills of both Nostrum employees
and contractor personnel engaged in safety-critical activities. In
addition to in-house programmes, Nostrum also provides
occupational safety training through the Alim Training Centre. During
2025, 1,088 employees completed advanced HSE training.
In-house HSE training
2021 2022 2023 2024 2025
H2S rules 329 254 265 357 317
Industrial safety
rules
263 238 284 423 465
Labour safety
rules
224 223 253 322 306
Total 816 715 802 1,102 1,088
HSE communication and awareness
Nostrum’s HSE training efforts are further supported by site-based
safety engineers, who conduct regular briefings and practical coaching
sessions for contractor personnel, including training on the proper
completion of Job Safety Analysis (JSA) documentation. They also hold
monthly safety meetings with production personnel on various
occupational safety topics in accordance with the 2025 TM calendar.
In addition, medical personnel within the HSE Department deliver
internal training that includes practical, hands-on exercises covering a
range of emergency response topics. These sessions include first aid,
pre-medical assistance, and response actions under different
emergency scenarios. Together, these activities strengthen workforce
competence, improve preparedness, and support the development of
a proactive safety culture across Nostrum’s operations.
In 2025, HSE Workshops were carried out for field personnel to
promote awareness on the following topics:
• Contractor Safety
• Risk Management
• Road Safety and Jorney Management
• Waste Management
• First Aid
• Working on heights
• HSE Responsibility
• COSHH
• Fire Safety
• Incident Management
• Pinch points
• Slips and Trips
• JSA
• Stress Management
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
40
STRATEGIC REPORT
To ensure HSE Awareness the following communication tools were used
in 2025:
• Monthly QHSE Reports
• A pop-up window appeared on the screens when logging in every day
with a safety reminder from the QHSE department
• HSE Posters printed and displayed in prominent locations
• HSE Alerts
• HSE Advisories.
Process safety
Nostrum recorded no Tier 1 or Tier 2 process safety incidents at its
production sites in 2025.
In line with the American Petroleum Institute (API) definition, a Tier 1
or Tier 2 process safety incident is an unplanned or uncontrolled
release of material from a process, including non-toxic and non-
flammable substances, that results in one or more of the following
consequences:
• injury, fatality, or lost workdays affecting an employee, contractor, or
subcontractor;
• hospitalisation or fatality of a third party;
• an officially declared community evacuation or shelter-in-place order,
including precautionary measures;
• fire or explosion damage of US$100,000 or more.
• Nostrum’s process safety management is supported by a structured
approach to asset integrity and maintenance, including:
• selection of appropriate maintenance strategies based on equipment
criticality and operational risk;
• classification and prioritisation of systems and equipment to ensure
focus on the most safety-critical areas;
• implementation of a dedicated Safety Critical Equipment (SCE)
maintenance programme.
Under this programme, maintenance resources are allocated
according to priority, with critical systems taking precedence, helping
to ensure the continued safe and reliable operation of production
facilities.
Vessel and Flow-line inspection programme
Inspection of vessels and flowlines continued in line with the Field
Operations maintenance programme and in compliance with
applicable Republic of Kazakhstan (RoK) regulatory requirements.
These inspections form an important part of Nostrum’s asset integrity
and process safety framework, supporting the safe and reliable
operation of production facilities.
To meet regulatory requirements while minimising equipment
downtime, Nostrum makes broad use of non-destructive testing
(NDT) methods. The use of advanced NDT techniques allows
inspections to be performed efficiently and helps reduce the time that
vessels remain out of service during maintenance activities.
A key technique applied is Corrosion Mapping, which provides a
detailed assessment of vessel condition. Under this method, the
entire metal surface is scanned to generate a more accurate profile of
wall thickness and the corrosion status of the vessel. This approach
improves the quality of integrity assessments and supports more
informed maintenance and replacement decisions.
The application of Corrosion Mapping in 2025 identified poor
condition of the 1st stage oil separator at the Oil Treatment Unit
(OTU), confirming the need to replace the vessel in 2026. Early
identification of this condition enables timely planning of corrective
actions and helps reduce the risk of unplanned failures.
Looking ahead, Nostrum plans to expand the use of the Corrosion
Mapping method in 2026 for selected critical processing vessels at the
Gas Treatment Units (GTUs), particularly those most exposed to
corrosion. Wider implementation of this method is expected to
improve inspection accuracy, strengthen preventive maintenance
planning, and help minimise facility shutdown time during the annual
turnaround.
Emergency response, Civil Protection Planning and
Prevention
The Company maintains a strong focus on emergency preparedness,
operational continuity, and the mitigation of adverse impacts on
people and assets. We remain committed to preserving asset integrity
and managing operations in a manner that effectively controls
significant risks throughout all stages of our activities.
In line with the 2025 training plan, emergency response training for
personnel was conducted on a quarterly basis to help prevent
accidents and emergencies and to rehearse Emergency Response Plan
(ERP) scenarios at all hazardous production facilities. In addition, from
November 2025, the frequency of emergency drills and training
exercises was increased from quarterly to monthly in order to
improve coordination and enhance the effectiveness of all response
teams in accordance with emergency response arrangements.
Throughout 2025, the Company continued to conduct emergency
response training and exercises based on credible ERP scenarios
across all hazardous production facilities.
Nostrum’s hazardous production facilities include:
• Oil Terminal and Transfer Point in Beles
• CF-Rostoshi Oil Trunk Pipeline
• CF-ICA Gas Trunk Pipeline (GTP Orenburg –Novopskov)
• OTU and gas lift system
• GTU-1, GTU-2 and LPG-1, LPG-2
• Well Operations and gathering system
• GTU-26
• MTS and RPMS
• Waste disposal area
• GTU-3 and LPG-3
During drills at each facility, the Emergency Operations Centre (EOC)
organized and coordinated emergency prevention measures and
accident response actions, including fire safety arrangements. During
the quarterly drills conducted at the facilities and EOC, the full range
of issues related to accident prevention, emergency preparedness,
and incident response/elimination procedures was reviewed and
practiced.
In 2025, Company employees who are members of the Voluntary
Emergency Rescue Team took part, as part of their training as
volunteer gas rescue responders, in special tactical rescue exercises
on the elimination of a well blowout at the training well of the training
centre in Tungush settlement.
Oil spill prevention
Nostrum is committed to achieving zero operational spills and
continues to strengthen its spill prevention and response framework
across all production facilities. The Company implements a
combination of preventive and preparedness measures aimed at
reducing the likelihood of spills and ensuring an effective response
should an incident occur.
Key prevention and mitigation initiatives include:
• regular emergency drills and response team training;
• timely maintenance, repair, and replacement of equipment;
• enhanced monitoring of known/problematic sections of oil pipelines
and related infrastructure;
• ongoing improvement of operational controls and field supervision.
STRATEGIC REPORT
To ensure HSE Awareness the following communication tools were used
in 2025:
• Monthly QHSE Reports
• A pop-up window appeared on the screens when logging in every day
with a safety reminder from the QHSE department
• HSE Posters printed and displayed in prominent locations
• HSE Alerts
• HSE Advisories.
Process safety
Nostrum recorded no Tier 1 or Tier 2 process safety incidents at its
production sites in 2025.
In line with the American Petroleum Institute (API) definition, a Tier 1
or Tier 2 process safety incident is an unplanned or uncontrolled
release of material from a process, including non-toxic and non-
flammable substances, that results in one or more of the following
consequences:
• injury, fatality, or lost workdays affecting an employee, contractor, or
subcontractor;
• hospitalisation or fatality of a third party;
• an officially declared community evacuation or shelter-in-place order,
including precautionary measures;
• fire or explosion damage of US$100,000 or more.
• Nostrum’s process safety management is supported by a structured
approach to asset integrity and maintenance, including:
• selection of appropriate maintenance strategies based on equipment
criticality and operational risk;
• classification and prioritisation of systems and equipment to ensure
focus on the most safety-critical areas;
• implementation of a dedicated Safety Critical Equipment (SCE)
maintenance programme.
Under this programme, maintenance resources are allocated
according to priority, with critical systems taking precedence, helping
to ensure the continued safe and reliable operation of production
facilities.
Vessel and Flow-line inspection programme
Inspection of vessels and flowlines continued in line with the Field
Operations maintenance programme and in compliance with
applicable Republic of Kazakhstan (RoK) regulatory requirements.
These inspections form an important part of Nostrum’s asset integrity
and process safety framework, supporting the safe and reliable
operation of production facilities.
To meet regulatory requirements while minimising equipment
downtime, Nostrum makes broad use of non-destructive testing
(NDT) methods. The use of advanced NDT techniques allows
inspections to be performed efficiently and helps reduce the time that
vessels remain out of service during maintenance activities.
A key technique applied is Corrosion Mapping, which provides a
detailed assessment of vessel condition. Under this method, the
entire metal surface is scanned to generate a more accurate profile of
wall thickness and the corrosion status of the vessel. This approach
improves the quality of integrity assessments and supports more
informed maintenance and replacement decisions.
The application of Corrosion Mapping in 2025 identified poor
condition of the 1st stage oil separator at the Oil Treatment Unit
(OTU), confirming the need to replace the vessel in 2026. Early
identification of this condition enables timely planning of corrective
actions and helps reduce the risk of unplanned failures.
Looking ahead, Nostrum plans to expand the use of the Corrosion
Mapping method in 2026 for selected critical processing vessels at the
Gas Treatment Units (GTUs), particularly those most exposed to
corrosion. Wider implementation of this method is expected to
improve inspection accuracy, strengthen preventive maintenance
planning, and help minimise facility shutdown time during the annual
turnaround.
Emergency response, Civil Protection Planning and
Prevention
The Company maintains a strong focus on emergency preparedness,
operational continuity, and the mitigation of adverse impacts on
people and assets. We remain committed to preserving asset integrity
and managing operations in a manner that effectively controls
significant risks throughout all stages of our activities.
In line with the 2025 training plan, emergency response training for
personnel was conducted on a quarterly basis to help prevent
accidents and emergencies and to rehearse Emergency Response Plan
(ERP) scenarios at all hazardous production facilities. In addition, from
November 2025, the frequency of emergency drills and training
exercises was increased from quarterly to monthly in order to
improve coordination and enhance the effectiveness of all response
teams in accordance with emergency response arrangements.
Throughout 2025, the Company continued to conduct emergency
response training and exercises based on credible ERP scenarios
across all hazardous production facilities.
Nostrum’s hazardous production facilities include:
• Oil Terminal and Transfer Point in Beles
• CF-Rostoshi Oil Trunk Pipeline
• CF-ICA Gas Trunk Pipeline (GTP Orenburg –Novopskov)
• OTU and gas lift system
• GTU-1, GTU-2 and LPG-1, LPG-2
• Well Operations and gathering system
• GTU-26
• MTS and RPMS
• Waste disposal area
• GTU-3 and LPG-3
During drills at each facility, the Emergency Operations Centre (EOC)
organized and coordinated emergency prevention measures and
accident response actions, including fire safety arrangements. During
the quarterly drills conducted at the facilities and EOC, the full range
of issues related to accident prevention, emergency preparedness,
and incident response/elimination procedures was reviewed and
practiced.
In 2025, Company employees who are members of the Voluntary
Emergency Rescue Team took part, as part of their training as
volunteer gas rescue responders, in special tactical rescue exercises
on the elimination of a well blowout at the training well of the training
centre in Tungush settlement.
Oil spill prevention
Nostrum is committed to achieving zero operational spills and
continues to strengthen its spill prevention and response framework
across all production facilities. The Company implements a
combination of preventive and preparedness measures aimed at
reducing the likelihood of spills and ensuring an effective response
should an incident occur.
Key prevention and mitigation initiatives include:
• regular emergency drills and response team training;
• timely maintenance, repair, and replacement of equipment;
• enhanced monitoring of known/problematic sections of oil pipelines
and related infrastructure;
• ongoing improvement of operational controls and field supervision.
ESG REVIEW
41 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
At the same time, Nostrum continues to enhance its spill response
capability in accordance with the Oil Spill Response Plan (OSRP)
applicable to the Company’s production facilities.
The OSRP establishes the Company’s overall approach to oil spill
preparedness and response, including:
• response strategies and techniques;
• available emergency response equipment and resources;
• trained personnel and contractor support arrangements.
• The OSRP also defines the core response measures, including:
• alarm receipt and notification procedures for rescue services;
• notification procedures for Company contractors, state authorities,
and local authorities;
• allocation of responsibilities for the organization and management of
rescue units; and
• measures to ensure personnel safety, along with other required
emergency response actions.
• The OSRP is reviewed and updated annually to reflect:
• changes in regulatory requirements;
• availability of response resources and equipment;
• lessons learned from exercises and operational experience.
• The plan also includes:
• justification of potential emergency levels;
• analysis of spill scenarios, including their possible escalation and
development;
• forecasting of potential consequences for production facilities
associated with accidental oil spills.
This structured approach helps the Company maintain an appropriate
level of readiness and improve response effectiveness.
Familiarization of production and engineering personnel with
emergency response plans and the OSRP is formally documented in
the workplace briefing log.
In accordance with the Industrial Control Charter, the Facilities
Manager and Field Director are responsible for ensuring that
Emergency Response Plans (ERPs) are prepared properly and kept fit
for purpose. They also ensure that compliance with safety
requirements is monitored on a regular basis.
Where non-compliance is identified, the Company develops and
implements corrective and preventive action plans to address gaps,
strengthen controls, and reduce the risk of recurrence.
Through the consistent implementation of prevention measures,
annual plan reviews, training, and compliance monitoring, Nostrum
continues to improve its spill prevention and response performance
and reinforce safe and environmentally responsible operations.
Overall control of all emergency drills was overseen by the Field
Director, who is responsible for the implementation of industrial and
fire safety measures.
We believe that these actions help maintain the proper level of skills
and competencies among employees and executives and ensure
compliance with legal process safety requirements and corporate
standards.
Contained and non-contained oil spills
In 2025, the Company recorded two hydrocarbon spill incidents at its
facilities. The first incident occurred at the GTU facility and involved a
condensate leak caused by damage to an underground pipeline. The
leak was promptly localized and eliminated, and no environmental
impact was recorded.
The second incident occurred at the Oil Treatment Unit (OTU) during
condensate offloading operations performed by a contractor. The fuel
tanker driver moved the vehicle without instruction and without
confirming completion of the operation, which resulted in a
condensate spill.
Emergency response teams acted in accordance with the Emergency
Response Plan, including gas-air atmosphere monitoring, and all
involved teams responded promptly and in a coordinated manner.
Following the incident, a number of additional measures were
implemented at the field, including targeted briefings for contractor
personnel conducted by responsible site personnel on compliance
with operating instructions and production safety requirements.
The Company will continue to strengthen its emergency preparedness
and response capability to ensure adequate and effective response to
emergency situations at the Chinarevskoye field.
Contained and non-contained oil spills
A table below shows data for 2021-2025:
2021 2022 2023 2024 2025
Contained oil spills 0 0 0 1 0
Non-contained oil
spills
0 0 0 0 2
Volume of the oil spills
in cubic meters
0.03 7.3
Note:
2024: The boiler of the Uniserv Trans Contractor company was loaded with hydrocarbons for
transportation to the OTU. After leaving GTP 1/2, a leak of hydrocarbon raw materials was detected
through the fill neck.
2025: 1. Сondensate spill at GTU. 2. After unloading condensate at the OTU, the contractor’s driver
left the site without waiting for the operator’s instruction. As a result, the hose was torn off and,
with the valve left open, a condensate spill occurred within the OTU area.
Boosting readiness of emergency rescue teams
To ensure effective emergency preparedness and response, Nostrum
has established civil defence and emergency response teams across
its operations. These teams are supported through a combination of
professional training, contractor partnerships, regular drills, and
ongoing competency development.
As part of this effort, six members of the Emergency Rescue Team
(ERT) received specialized training at the National Center for Scientific
Research, Training and Education of the Emergency Response
Department (Almaty). In addition, 30 members of the voluntary civil
protection teams at the Field completed training in 2025 at the
Akberen blowout elimination service training facility in Uralsk. This
training supports the development of practical response skills and
strengthens the Company’s internal emergency preparedness
capacity.
To maintain readiness for emergency rescue operations, the Company
has long-term service agreements with professional emergency
response providers:
• Ak-Beren LLP (gas rescue service / blowout elimination service), and
• Ansar-S-Group LLP (firefighters-rescuers).
These partnerships ensure access to qualified emergency responders
and specialized resources when needed. Ak-Beren LLP, as a
professional blowout elimination service, plays a key role in accident
prevention and emergency response at oil and gas wells and supports
compliance with response requirements for spills involving oil,
petroleum products, and other hydrocarbons.
The materials, equipment, and technical resources used by
emergency response and rescue teams are certified and comply with
applicable requirements. This helps ensure that emergency
operations can be carried out safely and effectively when incidents
occur.
41 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
At the same time, Nostrum continues to enhance its spill response
capability in accordance with the Oil Spill Response Plan (OSRP)
applicable to the Company’s production facilities.
The OSRP establishes the Company’s overall approach to oil spill
preparedness and response, including:
• response strategies and techniques;
• available emergency response equipment and resources;
• trained personnel and contractor support arrangements.
• The OSRP also defines the core response measures, including:
• alarm receipt and notification procedures for rescue services;
• notification procedures for Company contractors, state authorities,
and local authorities;
• allocation of responsibilities for the organization and management of
rescue units; and
• measures to ensure personnel safety, along with other required
emergency response actions.
• The OSRP is reviewed and updated annually to reflect:
• changes in regulatory requirements;
• availability of response resources and equipment;
• lessons learned from exercises and operational experience.
• The plan also includes:
• justification of potential emergency levels;
• analysis of spill scenarios, including their possible escalation and
development;
• forecasting of potential consequences for production facilities
associated with accidental oil spills.
This structured approach helps the Company maintain an appropriate
level of readiness and improve response effectiveness.
Familiarization of production and engineering personnel with
emergency response plans and the OSRP is formally documented in
the workplace briefing log.
In accordance with the Industrial Control Charter, the Facilities
Manager and Field Director are responsible for ensuring that
Emergency Response Plans (ERPs) are prepared properly and kept fit
for purpose. They also ensure that compliance with safety
requirements is monitored on a regular basis.
Where non-compliance is identified, the Company develops and
implements corrective and preventive action plans to address gaps,
strengthen controls, and reduce the risk of recurrence.
Through the consistent implementation of prevention measures,
annual plan reviews, training, and compliance monitoring, Nostrum
continues to improve its spill prevention and response performance
and reinforce safe and environmentally responsible operations.
Overall control of all emergency drills was overseen by the Field
Director, who is responsible for the implementation of industrial and
fire safety measures.
We believe that these actions help maintain the proper level of skills
and competencies among employees and executives and ensure
compliance with legal process safety requirements and corporate
standards.
Contained and non-contained oil spills
In 2025, the Company recorded two hydrocarbon spill incidents at its
facilities. The first incident occurred at the GTU facility and involved a
condensate leak caused by damage to an underground pipeline. The
leak was promptly localized and eliminated, and no environmental
impact was recorded.
The second incident occurred at the Oil Treatment Unit (OTU) during
condensate offloading operations performed by a contractor. The fuel
tanker driver moved the vehicle without instruction and without
confirming completion of the operation, which resulted in a
condensate spill.
Emergency response teams acted in accordance with the Emergency
Response Plan, including gas-air atmosphere monitoring, and all
involved teams responded promptly and in a coordinated manner.
Following the incident, a number of additional measures were
implemented at the field, including targeted briefings for contractor
personnel conducted by responsible site personnel on compliance
with operating instructions and production safety requirements.
The Company will continue to strengthen its emergency preparedness
and response capability to ensure adequate and effective response to
emergency situations at the Chinarevskoye field.
Contained and non-contained oil spills
A table below shows data for 2021-2025:
2021 2022 2023 2024 2025
Contained oil spills 0 0 0 1 0
Non-contained oil
spills
0 0 0 0 2
Volume of the oil spills
in cubic meters
0.03 7.3
Note:
2024: The boiler of the Uniserv Trans Contractor company was loaded with hydrocarbons for
transportation to the OTU. After leaving GTP 1/2, a leak of hydrocarbon raw materials was detected
through the fill neck.
2025: 1. Сondensate spill at GTU. 2. After unloading condensate at the OTU, the contractor’s driver
left the site without waiting for the operator’s instruction. As a result, the hose was torn off and,
with the valve left open, a condensate spill occurred within the OTU area.
Boosting readiness of emergency rescue teams
To ensure effective emergency preparedness and response, Nostrum
has established civil defence and emergency response teams across
its operations. These teams are supported through a combination of
professional training, contractor partnerships, regular drills, and
ongoing competency development.
As part of this effort, six members of the Emergency Rescue Team
(ERT) received specialized training at the National Center for Scientific
Research, Training and Education of the Emergency Response
Department (Almaty). In addition, 30 members of the voluntary civil
protection teams at the Field completed training in 2025 at the
Akberen blowout elimination service training facility in Uralsk. This
training supports the development of practical response skills and
strengthens the Company’s internal emergency preparedness
capacity.
To maintain readiness for emergency rescue operations, the Company
has long-term service agreements with professional emergency
response providers:
• Ak-Beren LLP (gas rescue service / blowout elimination service), and
• Ansar-S-Group LLP (firefighters-rescuers).
These partnerships ensure access to qualified emergency responders
and specialized resources when needed. Ak-Beren LLP, as a
professional blowout elimination service, plays a key role in accident
prevention and emergency response at oil and gas wells and supports
compliance with response requirements for spills involving oil,
petroleum products, and other hydrocarbons.
The materials, equipment, and technical resources used by
emergency response and rescue teams are certified and comply with
applicable requirements. This helps ensure that emergency
operations can be carried out safely and effectively when incidents
occur.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
42
STRATEGIC REPORT
A high level of readiness is maintained through regular drills, practical
exercises, and theoretical training. Emergency drills and training
sessions are conducted on a quarterly basis across all facilities.
Particular attention is given to facilities where produced gas and oil
contain hydrogen sulfide (H₂S), due to the elevated risk profile and
the need for rapid, coordinated response.
All Emergency Response Plans (ERPs) were reviewed, updated, and
approved in coordination with Ak-Beren emergency response service
and Ansar-S Group to ensure alignment with operational risks,
available resources, and response arrangements.
To further strengthen command and coordination capability,
commanders of voluntary rescue and fire teams also completed
additional training under a unit commander training programme. This
training was aimed at maintaining and improving competence levels,
particularly for safety-critical roles requiring decision-making under
emergency conditions.
In addition to supporting Nostrum’s own operations, the non-
government fire service of Ansar-S-Group LLP, which has been under
contract with Nostrum since 2022, was also mobilized several times
(within the framework of the service contract) to assist in Baiterek. At
the request of local executive authorities, the team participated in
emergency response activities related to the consequences of spring
floods and summer steppe fires. Through this support, Nostrum
continues to provide practical assistance to the administration and
residents of Baiterek on an ongoing basis.
Organisation of communication with contractors on
emergency response and prevention of possible emergencies
A significant share of Nostrum’s preventive safety and emergency
preparedness activities is carried out with the involvement of
contractors. For this reason, effective communication, coordination,
and oversight of contractor activities are essential to maintaining a
high level of emergency readiness across all production facilities.
To ensure consistent preparedness and coordinated response,
emergency drills and training exercises are conducted with the
participation of key contractor organisations involved in emergency
prevention and response functions, including:
• Ansar-S-Group LLP – fire prevention and firefighting/rescue support;
• Ak-Beren LLP – blowout prevention and gas rescue services;
• Nysan-Korgau – access control and protection of emergency/incident
zones from unauthorised persons.
Nostrum’s HSE personnel assigned to each hazardous production
facility carry out ongoing supervision of contractor work, including
monitoring implementation of work plans and compliance with
industrial safety requirements. This permanent oversight helps ensure
that contractors maintain the required standards during both routine
operations and emergency preparedness activities.
To support this process, the Company uses structured inspection
checklists covering the full range of control topics—from
documentation and procedural compliance to the quality and safety
of work execution. In addition, the HSE Department conducts regular
field inspections at production facilities to verify compliance and
identify opportunities for improvement.
These control and inspection teams include specialists responsible for:
• occupational health and safety;
• industrial safety compliance;
• emergency preparedness and response.
The most critical and recurring safety issues are regularly reviewed
jointly with contractors and facility representatives. Nostrum
maintains continuous cooperation with contractors to improve safety
methods, strengthen preventive measures, and enhance the quality
of emergency response arrangements.
By participating in Nostrum’s regular emergency drills, contractor
representatives gain practical experience in applying current
emergency response and rescue methods. Joint exercises also support
the development of common approaches to problem-solving,
improve coordination between all parties, and promote the adoption
of relevant oil and gas industry best practices.
This collaborative approach enables Nostrum and its contractors to
maintain aligned expectations, improve operational discipline, and
strengthen overall readiness to prevent and respond to potential
emergencies.
Alert system for employees and communities located near
the Chinarevskoye Field
The Company continuously improves its internal procedures for
emergency alerting, prevention, and response, and in 2025 it
maintained emergency alert systems across Nostrum’s production
facilities.
The duty dispatch service ensures the prompt transmission of
information on accidents and emergency situations to EOS-1 and EOS-
2, enabling timely notification of Company management and relevant
government authorities.
In the event of an emergency, at the first level of response,
notifications are issued to Company employees and contractor
personnel located at Nostrum production facilities, as well as to the
emergency response teams involved in the incident. Priority actions at
this stage focus on rescue and evacuation measures to protect
personnel. Territorial executive authorities (akimats) are also notified
in accordance with the established notification scheme where there is
a risk of adverse impacts extending beyond the site.
In the event of a major accident, second-level operational teams are
established at the Company’s office in Uralsk. Where required, the
Company organises the evacuation of personnel and, if necessary,
nearby communities in coordination with the relevant authorities.
Firefighting activities arrangement
The Company maintains a systematic approach to operational control
of industrial safety compliance, including internal audits of the
management system, analysis of incidents and inspection findings,
and the development and follow-up of corrective and preventive
actions to address identified gaps and reduce recurrence risks.
All Nostrum facilities at the Chinarevskoye Field and the Terminal are
classified as fire- and explosion-hazardous. For this reason, facility-
specific fire safety rules have been developed and implemented, and
ongoing controls are in place to ensure compliance with these
requirements.
Key fire and industrial safety activities include:
• mandatory preventive inductions and fire safety training for
personnel;
• supervision and control by line managers and responsible persons
over safe work execution;
• inspections of Ansar-S-Group by the authorized state body and fire
inspectors;
• project design/expert review to confirm compliance with fire safety
requirements during reconstruction and technical modernization of
production facilities;
• timely maintenance and functional testing of fire protection systems
and equipment at facilities (performed by contractor Batys Energon
LLP);
• continuous monitoring of the condition and operability of fire- and
explosion-hazardous process equipment, as well as compliance with
approved process flow schemes.
This integrated approach supports regulatory compliance, strengthens
fire risk management, and helps ensure safe and reliable operation of
the Company’s production assets.
STRATEGIC REPORT
A high level of readiness is maintained through regular drills, practical
exercises, and theoretical training. Emergency drills and training
sessions are conducted on a quarterly basis across all facilities.
Particular attention is given to facilities where produced gas and oil
contain hydrogen sulfide (H₂S), due to the elevated risk profile and
the need for rapid, coordinated response.
All Emergency Response Plans (ERPs) were reviewed, updated, and
approved in coordination with Ak-Beren emergency response service
and Ansar-S Group to ensure alignment with operational risks,
available resources, and response arrangements.
To further strengthen command and coordination capability,
commanders of voluntary rescue and fire teams also completed
additional training under a unit commander training programme. This
training was aimed at maintaining and improving competence levels,
particularly for safety-critical roles requiring decision-making under
emergency conditions.
In addition to supporting Nostrum’s own operations, the non-
government fire service of Ansar-S-Group LLP, which has been under
contract with Nostrum since 2022, was also mobilized several times
(within the framework of the service contract) to assist in Baiterek. At
the request of local executive authorities, the team participated in
emergency response activities related to the consequences of spring
floods and summer steppe fires. Through this support, Nostrum
continues to provide practical assistance to the administration and
residents of Baiterek on an ongoing basis.
Organisation of communication with contractors on
emergency response and prevention of possible emergencies
A significant share of Nostrum’s preventive safety and emergency
preparedness activities is carried out with the involvement of
contractors. For this reason, effective communication, coordination,
and oversight of contractor activities are essential to maintaining a
high level of emergency readiness across all production facilities.
To ensure consistent preparedness and coordinated response,
emergency drills and training exercises are conducted with the
participation of key contractor organisations involved in emergency
prevention and response functions, including:
• Ansar-S-Group LLP – fire prevention and firefighting/rescue support;
• Ak-Beren LLP – blowout prevention and gas rescue services;
• Nysan-Korgau – access control and protection of emergency/incident
zones from unauthorised persons.
Nostrum’s HSE personnel assigned to each hazardous production
facility carry out ongoing supervision of contractor work, including
monitoring implementation of work plans and compliance with
industrial safety requirements. This permanent oversight helps ensure
that contractors maintain the required standards during both routine
operations and emergency preparedness activities.
To support this process, the Company uses structured inspection
checklists covering the full range of control topics—from
documentation and procedural compliance to the quality and safety
of work execution. In addition, the HSE Department conducts regular
field inspections at production facilities to verify compliance and
identify opportunities for improvement.
These control and inspection teams include specialists responsible for:
• occupational health and safety;
• industrial safety compliance;
• emergency preparedness and response.
The most critical and recurring safety issues are regularly reviewed
jointly with contractors and facility representatives. Nostrum
maintains continuous cooperation with contractors to improve safety
methods, strengthen preventive measures, and enhance the quality
of emergency response arrangements.
By participating in Nostrum’s regular emergency drills, contractor
representatives gain practical experience in applying current
emergency response and rescue methods. Joint exercises also support
the development of common approaches to problem-solving,
improve coordination between all parties, and promote the adoption
of relevant oil and gas industry best practices.
This collaborative approach enables Nostrum and its contractors to
maintain aligned expectations, improve operational discipline, and
strengthen overall readiness to prevent and respond to potential
emergencies.
Alert system for employees and communities located near
the Chinarevskoye Field
The Company continuously improves its internal procedures for
emergency alerting, prevention, and response, and in 2025 it
maintained emergency alert systems across Nostrum’s production
facilities.
The duty dispatch service ensures the prompt transmission of
information on accidents and emergency situations to EOS-1 and EOS-
2, enabling timely notification of Company management and relevant
government authorities.
In the event of an emergency, at the first level of response,
notifications are issued to Company employees and contractor
personnel located at Nostrum production facilities, as well as to the
emergency response teams involved in the incident. Priority actions at
this stage focus on rescue and evacuation measures to protect
personnel. Territorial executive authorities (akimats) are also notified
in accordance with the established notification scheme where there is
a risk of adverse impacts extending beyond the site.
In the event of a major accident, second-level operational teams are
established at the Company’s office in Uralsk. Where required, the
Company organises the evacuation of personnel and, if necessary,
nearby communities in coordination with the relevant authorities.
Firefighting activities arrangement
The Company maintains a systematic approach to operational control
of industrial safety compliance, including internal audits of the
management system, analysis of incidents and inspection findings,
and the development and follow-up of corrective and preventive
actions to address identified gaps and reduce recurrence risks.
All Nostrum facilities at the Chinarevskoye Field and the Terminal are
classified as fire- and explosion-hazardous. For this reason, facility-
specific fire safety rules have been developed and implemented, and
ongoing controls are in place to ensure compliance with these
requirements.
Key fire and industrial safety activities include:
• mandatory preventive inductions and fire safety training for
personnel;
• supervision and control by line managers and responsible persons
over safe work execution;
• inspections of Ansar-S-Group by the authorized state body and fire
inspectors;
• project design/expert review to confirm compliance with fire safety
requirements during reconstruction and technical modernization of
production facilities;
• timely maintenance and functional testing of fire protection systems
and equipment at facilities (performed by contractor Batys Energon
LLP);
• continuous monitoring of the condition and operability of fire- and
explosion-hazardous process equipment, as well as compliance with
approved process flow schemes.
This integrated approach supports regulatory compliance, strengthens
fire risk management, and helps ensure safe and reliable operation of
the Company’s production assets.
ESG REVIEW
43 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Civil defense and emergency prevention measures
In 2025, the Company continued to strengthen its civil defence and
emergency preparedness arrangements in line with the requirements
of the legislation of the Republic of Kazakhstan (RoK). As part of this
work, the annexes to the Civil Defence Plan were revised and updated
in accordance with statutory requirements, and the scheduled annual
personnel training was completed.
At operational facilities, the Company conducted emergency response
drills and training exercises on a quarterly basis throughout the year.
To further improve readiness, coordination, and the effectiveness of
response actions, the frequency of drills was increased from quarterly
to monthly starting from November 2025.
In addition to training at production facilities, the Company also
delivered First Aid Training and Fire Safety Training for office
personnel in 2025. These activities were aimed at improving basic
emergency preparedness, strengthening response awareness, and
ensuring that employees understand how to act safely in the event of
an incident.
The Company also provides personal protective equipment (PPE) for
staff, including civilian GP-7 gas masks equipped with “Breeze” filters,
which are intended to provide protection against hazardous
substances.
The flood situation in 2025 remained stable, and no flooding incidents
were recorded.
At the same time, emergency rescue services engaged by the
Company were mobilized on a voluntary basis to support local
communities in response to fires affecting farms and villages. The
Company consistently responds to such situations and continues to
provide practical assistance to the local community when emergency
support is needed.
Through regular training, plan updates, and support to local
communities, the Company continues to strengthen its emergency
preparedness system, improve personnel competence, and maintain
readiness to respond effectively to emergency situations.
43 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Civil defense and emergency prevention measures
In 2025, the Company continued to strengthen its civil defence and
emergency preparedness arrangements in line with the requirements
of the legislation of the Republic of Kazakhstan (RoK). As part of this
work, the annexes to the Civil Defence Plan were revised and updated
in accordance with statutory requirements, and the scheduled annual
personnel training was completed.
At operational facilities, the Company conducted emergency response
drills and training exercises on a quarterly basis throughout the year.
To further improve readiness, coordination, and the effectiveness of
response actions, the frequency of drills was increased from quarterly
to monthly starting from November 2025.
In addition to training at production facilities, the Company also
delivered First Aid Training and Fire Safety Training for office
personnel in 2025. These activities were aimed at improving basic
emergency preparedness, strengthening response awareness, and
ensuring that employees understand how to act safely in the event of
an incident.
The Company also provides personal protective equipment (PPE) for
staff, including civilian GP-7 gas masks equipped with “Breeze” filters,
which are intended to provide protection against hazardous
substances.
The flood situation in 2025 remained stable, and no flooding incidents
were recorded.
At the same time, emergency rescue services engaged by the
Company were mobilized on a voluntary basis to support local
communities in response to fires affecting farms and villages. The
Company consistently responds to such situations and continues to
provide practical assistance to the local community when emergency
support is needed.
Through regular training, plan updates, and support to local
communities, the Company continues to strengthen its emergency
preparedness system, improve personnel competence, and maintain
readiness to respond effectively to emergency situations.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
44
STRATEGIC REPORT
Empowering our people
The Group recognises that its operational performance depends on the skills, experience and
commitment of its workforce. We aim to maintain a professional working environment where
employees are treated with respect and have equal opportunities to contribute and develop within
the organisation.
2025 highlights
Employees 595
Training costs US$0.6m
Group employees hired locally 98%
Female employees at Group level 21%
Represented among Nostrum’s employees 13 countries
Average number of training hours per employee 99
Strength through diversity
As of 31 December 2025, the Group employed 595 employees (2024:
605 employees). The reduction of 10 employees during the year
reflects workforce optimisation measures aligned with operational
requirements.
To strengthen workforce oversight, an HR dashboard introduced in
2024 provides the SMT with monthly insights into gender composition
across organisation and within individual departments, further
strengthening oversight, accountability and data driven decision-
making.
Nostrum has maintained a formal Equality and Diversity Policy for
several years, that reflects fair and inclusive employment practices.
As at 31 December 2025, women represented 21% of the Group’s
Kazakhstan based workforce (2024: 20%). In the UK, female
representations remained stable at 40% (2024: 40%). Overall, gender
composition across the Group remained broadly stable, with 79%
being male and 21% female employees (2024: 79% male and 21%
female).
At senior levels, women comprised 30% of the Senior Management
Team (2024: 21%). The Company supports equal opportunity in
promotion decisions and actively encourages female career
progression where competencies and performance are aligned. The
Company continues to seek opportunities to increase female
representation at senior management and department head levels
where possible.
Improving gender balance remains a longer-term objective. In
particular, increasing female representation in technical and field-
based roles involving rotational shifts continues to present structural
challenges across the oil and gas sector.
The Board recognises the importance of diversity in leadership and
considers diversity among the factors in future appointments. The
Company has commenced a search for an additional independent
non-executive director to replace Fiona Paulus (who left the Board on
13 February 2026). In such search the Company is focusing on female
candidates in furtherance of the Company’s diversity goals.
The Human Resources department supports internal development
and seeks to maintain a diverse workforce across the organisation. In
2025, 20% of Group recruitment was female (2024: 20%).
Number of employees
As at 31 December
2021 2022 2023 2024 2025
Employees 559 566 571 605 595
Gender diversity
As at 31 December
2021 2022 2023 2024 2025
Male 77% 78% 78% 79% 79%
Female 23% 22% 22% 21% 21%
Breakdown of employees and top management by age (%)
<30
years
30-39 40-49 50-59 60 and
more
Number 25 174 234 126 36
% 4.2% 29.2% 39.3% 21.2% 6.1%
In 2025, four employees took parental leave, comprising three female
and one male employee. Three employees returned from parental
leave during the year, all female.
The Company places a strong emphasis on diversity and inclusion,
fostering a leadership team that reflects broad range of national
backgrounds. As at 31 December 2025, the Senior Management Team
comprised ten members representing five nationalities, including five
Kazakh nationals. This composition reflects a between international
experience and the development of local leadership.
The Nostrum Code of Conduct safeguards all employees and
contractors from unlawful discrimination based on aspects: disability,
socio-economic background, age, gender, educational and
professional backgrounds.
No complaints or reported cases of discrimination from employees
were recorded during 2025.
HR Strategy and key initiatives
The Group’s human resources strategy focuses on developing
workforce capabilities, supporting local talent, maintaining
competitive remuneration structures and strengthening leadership
succession. These priorities support operational stability while
ensuring the organisation remains well positioned to attract and
retain qualified personnel.
In 2025 the HR function delivered several initiatives focused on
workforce development and maintaining a competitive compensation
framework. Broad employee coverage was achieved through the
Performance Development Review (PDR) process, supporting regular
performance evaluation and development planning.
During the year, the Group conducted a comprehensive salary
benchmarking exercise, resulting in the alignment of compensation
ranges with market levels. These measures supported employee and
helped ensure the Group’s remuneration framework remains
competitive.
STRATEGIC REPORT
Empowering our people
The Group recognises that its operational performance depends on the skills, experience and
commitment of its workforce. We aim to maintain a professional working environment where
employees are treated with respect and have equal opportunities to contribute and develop within
the organisation.
2025 highlights
Employees 595
Training costs US$0.6m
Group employees hired locally 98%
Female employees at Group level 21%
Represented among Nostrum’s employees 13 countries
Average number of training hours per employee 99
Strength through diversity
As of 31 December 2025, the Group employed 595 employees (2024:
605 employees). The reduction of 10 employees during the year
reflects workforce optimisation measures aligned with operational
requirements.
To strengthen workforce oversight, an HR dashboard introduced in
2024 provides the SMT with monthly insights into gender composition
across organisation and within individual departments, further
strengthening oversight, accountability and data driven decision-
making.
Nostrum has maintained a formal Equality and Diversity Policy for
several years, that reflects fair and inclusive employment practices.
As at 31 December 2025, women represented 21% of the Group’s
Kazakhstan based workforce (2024: 20%). In the UK, female
representations remained stable at 40% (2024: 40%). Overall, gender
composition across the Group remained broadly stable, with 79%
being male and 21% female employees (2024: 79% male and 21%
female).
At senior levels, women comprised 30% of the Senior Management
Team (2024: 21%). The Company supports equal opportunity in
promotion decisions and actively encourages female career
progression where competencies and performance are aligned. The
Company continues to seek opportunities to increase female
representation at senior management and department head levels
where possible.
Improving gender balance remains a longer-term objective. In
particular, increasing female representation in technical and field-
based roles involving rotational shifts continues to present structural
challenges across the oil and gas sector.
The Board recognises the importance of diversity in leadership and
considers diversity among the factors in future appointments. The
Company has commenced a search for an additional independent
non-executive director to replace Fiona Paulus (who left the Board on
13 February 2026). In such search the Company is focusing on female
candidates in furtherance of the Company’s diversity goals.
The Human Resources department supports internal development
and seeks to maintain a diverse workforce across the organisation. In
2025, 20% of Group recruitment was female (2024: 20%).
Number of employees
As at 31 December
2021 2022 2023 2024 2025
Employees 559 566 571 605 595
Gender diversity
As at 31 December
2021 2022 2023 2024 2025
Male 77% 78% 78% 79% 79%
Female 23% 22% 22% 21% 21%
Breakdown of employees and top management by age (%)
<30
years
30-39 40-49 50-59 60 and
more
Number 25 174 234 126 36
% 4.2% 29.2% 39.3% 21.2% 6.1%
In 2025, four employees took parental leave, comprising three female
and one male employee. Three employees returned from parental
leave during the year, all female.
The Company places a strong emphasis on diversity and inclusion,
fostering a leadership team that reflects broad range of national
backgrounds. As at 31 December 2025, the Senior Management Team
comprised ten members representing five nationalities, including five
Kazakh nationals. This composition reflects a between international
experience and the development of local leadership.
The Nostrum Code of Conduct safeguards all employees and
contractors from unlawful discrimination based on aspects: disability,
socio-economic background, age, gender, educational and
professional backgrounds.
No complaints or reported cases of discrimination from employees
were recorded during 2025.
HR Strategy and key initiatives
The Group’s human resources strategy focuses on developing
workforce capabilities, supporting local talent, maintaining
competitive remuneration structures and strengthening leadership
succession. These priorities support operational stability while
ensuring the organisation remains well positioned to attract and
retain qualified personnel.
In 2025 the HR function delivered several initiatives focused on
workforce development and maintaining a competitive compensation
framework. Broad employee coverage was achieved through the
Performance Development Review (PDR) process, supporting regular
performance evaluation and development planning.
During the year, the Group conducted a comprehensive salary
benchmarking exercise, resulting in the alignment of compensation
ranges with market levels. These measures supported employee and
helped ensure the Group’s remuneration framework remains
competitive.
ESG REVIEW
45 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
The Group maintains a structured onboarding process to support the
effective integration of new employees. The process includes
orientation on Company policies, operational procedures and
workplace standards, helping new hires adapt to their roles and the
organisational environment.
Recruitment practices are based on professional qualifications,
experience and role requirements. All candidates are considered on
an equal basis during the hiring process in line with the Company’s
internal policies and applicable labour legislation.
The HR function also supports workforce planning and succession
planning for key operational and management roles to ensure
continuity and the development of internal talent.
The Company entered an active phase of its strategic transformation,
which goes beyond operational improvements and reflects a
fundamental shift in both the business model and the approach to
human capital management as a critical driver of sustainable growth.
The Company has initiated a transition toward a modern people
management model focused on enhancing workforce productivity,
building critical capabilities, and fostering a high-performance,
accountability-driven culture. Key initiatives include organizational
redesign, implementation of advanced performance management
systems, leadership development programs, and strengthening talent
attraction and retention frameworks.
The Company views investment in its people as a strategic lever for
driving efficiency, innovation, and superior customer outcomes.
Gender diversity
As at 31 December 2025
Board
Male 5 83%
Female 1 17%
Total 6 100%
SMT
Male 7 70%
Female 3 30%
Total 10 100%
Employees
Male 463 79%
Female 122 21%
Total 585 100%
Employee relations and social guarantees
Nostrum remains a significant employer in western Kazakhstan and a
long-standing partner to the communities in which we operate. As at
31 December 2025, Nostrum had a total of 595 employees from 13
countries. The workforce is predominantly local, with 582 employees
from Kazakhstan representing approximately 98% of the total
workforce. During the year, 98% of the new hires were recruited
locally.
The Company recruits employees both directly and, where
appropriate, through reputable local recruitment agencies.
Recruitment partners are subject to due diligence to ensure their
employment practices align with the Company’s standards of ethical
conduct and responsible hiring.
We offer competitive and equitable remuneration and benefits
packages in full compliance with applicable legislation and internal
policies. These principles are applied consistently across permanent,
temporary and part-time roles, ensuring equal standards of
employment.
The Company continues to monitor gender pay discrepancies as part
of its internal workforce analysis. In 2025, the Group conducted a
review of gender pay differences, analysing remuneration across job
functions, seniority levels, locations, and other relevant factors. As a
result of this analysis, the following observations were drawn:
1. Roles with higher pay are male-dominated (C-suite)
We have seen that the gender pay gap widened slightly in 2025 as
compared to 2024. The average employee salary in Kazakhstan was
3.32% higher for males (2024: 1.32% higher for males), while the
median employee salary in Kazakhstan was 2.79% higher for females
(2024: 2.29% higher for females). At certain levels female pay exceeds
their male counterparts (Office), while in the Field the remuneration is
higher for males than females.
During the year, three female employees were promoted based on
competencies and performance.
The Company continues to support fair and balanced recruitment and
promotion and aims to increase female representation in senior roles
and in areas where women are currently under-represented. The
Board reviews gender pay information periodically and may consider
actions where material discrepancies are identified.
Succession Planning Policy
The Company has implemented Succession Planning Policy that aims
to identify future staffing needs and employees with the skills and
potential to be developed for carrying out future management roles.
Employee well-being, education and training
We believe investing in our people is key to economic self-
empowerment in the communities in which we operate. Under the
terms of the PSA, we are required to accrue 1% of our annual
Chinarevskoye field development costs to be spent on education and
training.
In 2025, 485 employees benefited from education and training
programmes (2024: 538 employees). Our total Group training costs in
2025 were US$0.6m (2024: US$0.6m) and the total number of
training days in 2025 was 5,991 days (2024: 7,435 days).
In 2025, Nostrum supported numerous educational programs. In
addition, training was undertaken by operational and head office
teams, department heads, specialist engineers and other technicians
at different levels across the organisation.
HSE trainings are carried out in accordance with our operating
practices and as required by the RoK legislation and the PSA.
Hiring and staff turnover
During the year, 44 employees (37 males and 7 females) left the
Company (2024: 31 employees).
During 2025, 40 new employees were hired (8 females and 32 males),
reflecting targeted recruitment aligned with operational
requirements.
Overall employee retention remained broadly stable in 2025. The
Group continues to focus on maintaining a supportive and inclusive
working environment, promoting professional development and
ensuring transparent communication across the organisation.
While turnover levels were consistent with the Company’s
operational objectives, we continue to monitor workforce trends
closely. Structured employee engagement surveys and targeted HR
programmes are in place to strengthen workforce engagement and
sustain organisational effectiveness over the long term.
45 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
The Group maintains a structured onboarding process to support the
effective integration of new employees. The process includes
orientation on Company policies, operational procedures and
workplace standards, helping new hires adapt to their roles and the
organisational environment.
Recruitment practices are based on professional qualifications,
experience and role requirements. All candidates are considered on
an equal basis during the hiring process in line with the Company’s
internal policies and applicable labour legislation.
The HR function also supports workforce planning and succession
planning for key operational and management roles to ensure
continuity and the development of internal talent.
The Company entered an active phase of its strategic transformation,
which goes beyond operational improvements and reflects a
fundamental shift in both the business model and the approach to
human capital management as a critical driver of sustainable growth.
The Company has initiated a transition toward a modern people
management model focused on enhancing workforce productivity,
building critical capabilities, and fostering a high-performance,
accountability-driven culture. Key initiatives include organizational
redesign, implementation of advanced performance management
systems, leadership development programs, and strengthening talent
attraction and retention frameworks.
The Company views investment in its people as a strategic lever for
driving efficiency, innovation, and superior customer outcomes.
Gender diversity
As at 31 December 2025
Board
Male 5 83%
Female 1 17%
Total 6 100%
SMT
Male 7 70%
Female 3 30%
Total 10 100%
Employees
Male 463 79%
Female 122 21%
Total 585 100%
Employee relations and social guarantees
Nostrum remains a significant employer in western Kazakhstan and a
long-standing partner to the communities in which we operate. As at
31 December 2025, Nostrum had a total of 595 employees from 13
countries. The workforce is predominantly local, with 582 employees
from Kazakhstan representing approximately 98% of the total
workforce. During the year, 98% of the new hires were recruited
locally.
The Company recruits employees both directly and, where
appropriate, through reputable local recruitment agencies.
Recruitment partners are subject to due diligence to ensure their
employment practices align with the Company’s standards of ethical
conduct and responsible hiring.
We offer competitive and equitable remuneration and benefits
packages in full compliance with applicable legislation and internal
policies. These principles are applied consistently across permanent,
temporary and part-time roles, ensuring equal standards of
employment.
The Company continues to monitor gender pay discrepancies as part
of its internal workforce analysis. In 2025, the Group conducted a
review of gender pay differences, analysing remuneration across job
functions, seniority levels, locations, and other relevant factors. As a
result of this analysis, the following observations were drawn:
1. Roles with higher pay are male-dominated (C-suite)
We have seen that the gender pay gap widened slightly in 2025 as
compared to 2024. The average employee salary in Kazakhstan was
3.32% higher for males (2024: 1.32% higher for males), while the
median employee salary in Kazakhstan was 2.79% higher for females
(2024: 2.29% higher for females). At certain levels female pay exceeds
their male counterparts (Office), while in the Field the remuneration is
higher for males than females.
During the year, three female employees were promoted based on
competencies and performance.
The Company continues to support fair and balanced recruitment and
promotion and aims to increase female representation in senior roles
and in areas where women are currently under-represented. The
Board reviews gender pay information periodically and may consider
actions where material discrepancies are identified.
Succession Planning Policy
The Company has implemented Succession Planning Policy that aims
to identify future staffing needs and employees with the skills and
potential to be developed for carrying out future management roles.
Employee well-being, education and training
We believe investing in our people is key to economic self-
empowerment in the communities in which we operate. Under the
terms of the PSA, we are required to accrue 1% of our annual
Chinarevskoye field development costs to be spent on education and
training.
In 2025, 485 employees benefited from education and training
programmes (2024: 538 employees). Our total Group training costs in
2025 were US$0.6m (2024: US$0.6m) and the total number of
training days in 2025 was 5,991 days (2024: 7,435 days).
In 2025, Nostrum supported numerous educational programs. In
addition, training was undertaken by operational and head office
teams, department heads, specialist engineers and other technicians
at different levels across the organisation.
HSE trainings are carried out in accordance with our operating
practices and as required by the RoK legislation and the PSA.
Hiring and staff turnover
During the year, 44 employees (37 males and 7 females) left the
Company (2024: 31 employees).
During 2025, 40 new employees were hired (8 females and 32 males),
reflecting targeted recruitment aligned with operational
requirements.
Overall employee retention remained broadly stable in 2025. The
Group continues to focus on maintaining a supportive and inclusive
working environment, promoting professional development and
ensuring transparent communication across the organisation.
While turnover levels were consistent with the Company’s
operational objectives, we continue to monitor workforce trends
closely. Structured employee engagement surveys and targeted HR
programmes are in place to strengthen workforce engagement and
sustain organisational effectiveness over the long term.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
46
STRATEGIC REPORT
Workforce representation
The Company remains committed to ensuring that the views of its
workforce are effectively represented at the Board level. In 2018, the
Company established collective agreements to facilitate workforce
representation. The Board continues to welcome employee input and
to take employees’ perspectives into consideration in its decision-
making.
The Board of Directors strives to adopt best practices in corporate
governance, including engagement with the Group’s workforce. In
particular, the Board wishes to understand the views of the Group’s
workforce and to take such views into consideration in Board
discussions and decision-making.
Communication between the workforce and the Board is often
referred to as the “employee voice”, and it is hoped that a wide
selection of views from the workforce can be gathered through a
range of formal and informal channels.
Such channels are intended to help the workforce share ideas and
concerns with senior management and the Board. This
communication provides useful feedback about business practices
from those delivering them and can help empower colleagues. The
Board encourages individuals to raise any concerns they may have.
Doing so acts as an early warning system for actual or potential
problems and helps to manage risk. The Board actively listens to
workforce concerns and subsequently provides feedback on how the
matter raised has been considered, including any action taken. The
Board emphasised that the workforce should feel safe to raise
concerns.
Nostrum Code of Conduct
Nostrum is committed to maintaining a Group-wide culture that
recognises international standards of human rights and this is
incorporated in the Group’s Code of Conduct.
Human Rights Policy
The Group has a Human Rights Policy which reflects the desire to
comply with industry best practice and the HR department has raised
awareness of the numerous benefits and interests that our Human
Rights Policy provide to our organisation.
First and foremost, the Human Rights Policy demonstrates our
commitment to upholding fundamental principles of human dignity,
respect, and equality. By establishing a framework that promotes fair
treatment of employees, stakeholders, and communities, we can
enhance our position as a responsible and ethical business that
contributes positively to the social and economic development of the
regions where we operate.
In addition to these ethical considerations, there are practical
benefits. By promoting diversity, inclusion, and non-discrimination, we
can attract and retain a more diverse and talented workforce.
Furthermore, a Human Rights Policy can help to mitigate legal,
financial, and reputational risks associated with human rights
violations.
Moreover, the Human Rights Policy also enhances our relationships
with key stakeholders, including customers, investors, regulators, and
civil society organisations. By engaging in transparent and constructive
dialogue about human rights issues, we can build trust, and credibility.
The Human Rights Policy is in addition to the Nostrum Code of
Conduct (Code), which defines the principles that guide business
conduct and provides a non-exhaustive outline of what Nostrum
considers permissible conduct by its employees. These principles
include provisions relating to human rights and diversity in the
workplace, insider dealing and insider information.
A copy of the Code is available on the Group’s website in both Russian
and English and can be downloaded from our website:
www.nostrumoilandgas.com.
Modern Slavery Act Statement
There are no areas of activity of the Group (or its vendors) believed to
have significant risk of child/forced labour/hazardous work
performance by young employees.
Under the Group’s standard supply contracts, the Group is entitled to
require suppliers to demonstrate compliance with the Code and to
hold its suppliers responsible for compliance by their supply chain
with equivalent terms.
A copy of our Modern Slavery and Transparency Statement is
available on our website: www.nostrumoilandgas.com.
Whistleblowing Policy
We have a Whistleblowing Policy which takes into account the
Whistleblowing Arrangements Code of Practice issued by the British
Standards Institute and Public Concern at Work, and which applies to
all individuals working for the Group at all levels and grades.
The Whistleblowing Policy sets out details of two compliance liaison
officers who speak a variety of languages for the purposes of
reporting any concerns. The Whistleblowing Policy is also mentioned
in the Code, and a person who reports any matter in good faith will be
protected against any sanctions. More information on this matter is
provided on page 74.
The updated version of the Whistleblowing Policy, revised in August
2023, is available on the Company’s website. At the time of writing,
we have received no reports under our Whistleblowing Policy of
forced/ involuntary labour or human trafficking in relation to our
business or supply chains.
For further details, please see our website:
www.nostrumoilandgas.com.
STRATEGIC REPORT
Workforce representation
The Company remains committed to ensuring that the views of its
workforce are effectively represented at the Board level. In 2018, the
Company established collective agreements to facilitate workforce
representation. The Board continues to welcome employee input and
to take employees’ perspectives into consideration in its decision-
making.
The Board of Directors strives to adopt best practices in corporate
governance, including engagement with the Group’s workforce. In
particular, the Board wishes to understand the views of the Group’s
workforce and to take such views into consideration in Board
discussions and decision-making.
Communication between the workforce and the Board is often
referred to as the “employee voice”, and it is hoped that a wide
selection of views from the workforce can be gathered through a
range of formal and informal channels.
Such channels are intended to help the workforce share ideas and
concerns with senior management and the Board. This
communication provides useful feedback about business practices
from those delivering them and can help empower colleagues. The
Board encourages individuals to raise any concerns they may have.
Doing so acts as an early warning system for actual or potential
problems and helps to manage risk. The Board actively listens to
workforce concerns and subsequently provides feedback on how the
matter raised has been considered, including any action taken. The
Board emphasised that the workforce should feel safe to raise
concerns.
Nostrum Code of Conduct
Nostrum is committed to maintaining a Group-wide culture that
recognises international standards of human rights and this is
incorporated in the Group’s Code of Conduct.
Human Rights Policy
The Group has a Human Rights Policy which reflects the desire to
comply with industry best practice and the HR department has raised
awareness of the numerous benefits and interests that our Human
Rights Policy provide to our organisation.
First and foremost, the Human Rights Policy demonstrates our
commitment to upholding fundamental principles of human dignity,
respect, and equality. By establishing a framework that promotes fair
treatment of employees, stakeholders, and communities, we can
enhance our position as a responsible and ethical business that
contributes positively to the social and economic development of the
regions where we operate.
In addition to these ethical considerations, there are practical
benefits. By promoting diversity, inclusion, and non-discrimination, we
can attract and retain a more diverse and talented workforce.
Furthermore, a Human Rights Policy can help to mitigate legal,
financial, and reputational risks associated with human rights
violations.
Moreover, the Human Rights Policy also enhances our relationships
with key stakeholders, including customers, investors, regulators, and
civil society organisations. By engaging in transparent and constructive
dialogue about human rights issues, we can build trust, and credibility.
The Human Rights Policy is in addition to the Nostrum Code of
Conduct (Code), which defines the principles that guide business
conduct and provides a non-exhaustive outline of what Nostrum
considers permissible conduct by its employees. These principles
include provisions relating to human rights and diversity in the
workplace, insider dealing and insider information.
A copy of the Code is available on the Group’s website in both Russian
and English and can be downloaded from our website:
www.nostrumoilandgas.com.
Modern Slavery Act Statement
There are no areas of activity of the Group (or its vendors) believed to
have significant risk of child/forced labour/hazardous work
performance by young employees.
Under the Group’s standard supply contracts, the Group is entitled to
require suppliers to demonstrate compliance with the Code and to
hold its suppliers responsible for compliance by their supply chain
with equivalent terms.
A copy of our Modern Slavery and Transparency Statement is
available on our website: www.nostrumoilandgas.com.
Whistleblowing Policy
We have a Whistleblowing Policy which takes into account the
Whistleblowing Arrangements Code of Practice issued by the British
Standards Institute and Public Concern at Work, and which applies to
all individuals working for the Group at all levels and grades.
The Whistleblowing Policy sets out details of two compliance liaison
officers who speak a variety of languages for the purposes of
reporting any concerns. The Whistleblowing Policy is also mentioned
in the Code, and a person who reports any matter in good faith will be
protected against any sanctions. More information on this matter is
provided on page 74.
The updated version of the Whistleblowing Policy, revised in August
2023, is available on the Company’s website. At the time of writing,
we have received no reports under our Whistleblowing Policy of
forced/ involuntary labour or human trafficking in relation to our
business or supply chains.
For further details, please see our website:
www.nostrumoilandgas.com.
ESG REVIEW
47 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Social responsibility
Nostrum seeks to operate in a responsible manner across its operations with a focus on
transparency, stakeholder dialogue and accountability. The Company undertakes social and
financial initiatives that support the well-being and development of the communities in which we
operate. These activities include environmental stewardship, maintaining ethical and governance
standards, community development programmes, and contributing to regional economic growth.
2025 highlights
Taxes paid since inception to the local
federal government authorities of the RK
US$1.2bn+
Investments in the country and since 1997 US$2.8bn+
Taxes paid to governments US$23.8m
Total invested in social and community
development initiatives
US$53.2 thousand
Targeted support provided across three
rural districts directly connected to
operations
Yantvartsevo, Solu Kol
and Beles
Philanthropy: major projects for 2025
Nostrum recognises the importance of man
aging and mitigating the social impacts of its operations and remains
committed to supporting the sustainable development of the
communities in which it operates. In 2025, the Group continued to
implement targeted social support initiatives focused primarily on
rural districts directly connected to its production activities.
During the year, particular emphasis was placed on supporting local
communities within the Yantvartsevo rural district and the Solu Kol
and Beles rural districts. Financial assistance of US$26.1 thousand
(KZT13.6m) was allocated to address priority community needs, with a
significant proportion directed towards educational infrastructure and
youth development.
Key educational initiatives included:
• US$5.8 thousand (KZT 3m) allocated to renovate a children’s mini-
center within the Yantvartsevo School –Nursery –Kindergarten
complex;
• US$2.4 thousand (KZT1.3m) provided to Beles School for post-
renovation facility improvements and the purchase of school supplies
for children from low-income families;
• US$3.5 thousand (KZT1.8m) allocated to Solu Kol School for the
procurement of classroom furniture and an interactive educational
panel.
Beyond educational support, Nostrum contributed to broader
regional development and cultural initiatives.
Major regional and cultural projects in 2025 included:
• US$9.6 thousand (KZT5m) to support City Day cultural celebrations;
• US$3.8 thousand (KZT2m) for the production of a children’s web series
titled “Media Academy”, aimed at fostering creativity and digital
literacy among young people;
• US$3.8 thousand (KZT2m) towards the preparation of an encyclopedia
documenting the agricultural history of the Baiterek district;
• US$6.3 thousand (KZT3.3m) in Solu Kol for the purchase of drainage
pipes to support the construction of internal village roads.
In total, Nostrum invested US$53.2 thousand (KZT27.7m) in social
assistance and community development initiatives in 2025.
Civil duty: Payment to governments
Nostrum is committed to the standards of transparency and
accountability in its operations and financial interactions with
governments. Responsible corporate conduct and clear disclosure
underpin stakeholder trust and long-term value creation. Our
structured public and government relations framework governs
engagement with national and local authorities, regulators and
community representatives, ensuring that all interactions are
conducted with consistency, integrity and alignment with our
corporate values.
We recognise that strong partnership between business and society is
essential for sustainable development. Nostrum continues to
contribute to the regions in which it operates through initiatives that
support social stability, infrastructure development and community
wellbeing. Through targeted programmes and ongoing stakeholder
dialogue, we seek to deliver lasting and positive socio-economic
impact around our core operations.
In 2025, Nostrum and its subsidiaries paid a total of US$23.8m (in
2024: US$27.93m) to governments. We will report on 2026 payments
to governments in the first half of 2027. For more details, please see
the Governance page of our website.
Nostrum approaches its civic duties with strong commitment,
understanding that the responsible and accurate payment of taxes
plays a vital role in fostering local economic growth and enabling
public authorities to effectively support their communities.
The Group did not engage in any lobbying or political finance activities
in 2025 and had no lobbying or political expenses.
The Group is a member of certain business and sectoral groups for
which it pays a standard membership fee, as specified below:
• Atameken (the National Chamber of Commerce of Kazakhstan, which
represents the interests of businesses, covering all business areas, and
the main task of which is the protection of the rights and interests of
the business community in Kazakhstan). Membership fee paid for
2025: US$31,280 (2024: US$24,042).
• KazEnergy (an association including numerous companies operating in
the oil and gas industry, as well as in the electric power and the
nuclear industries, with the goal of promoting the sustainable and
balanced development of the energy industry of the Republic of
Kazakhstan). Membership fee paid for 2025: US$39,666 (2024:
US$20,875).
Economic responsibility: Spend with local suppliers
We maintain a strong focus on partnering with local companies. In
2025, 90.4% (2024: 88.2%) of our supplier spending was directed to
RoK national suppliers, reflecting our continued commitment to the
domestic supply chain.
Environmentally friendly: Liquidation fund contribution
Under the terms of the Chinarevskoye PSA, Nostrum is obliged to
accumulate a cash reserve liquidation fund which by the end of the
PSA should total US$12.0m earmarked for the elimination of
environmental consequences of our operating activities. At the end of
2025, US$9.6m had been accumulated (2024: US$9.1m).
High ethical standards: Anti-Corruption and Bribery Policy
For more information on the Group’s Anti-Corruption and Bribery
Policy, please see page 74.
47 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Social responsibility
Nostrum seeks to operate in a responsible manner across its operations with a focus on
transparency, stakeholder dialogue and accountability. The Company undertakes social and
financial initiatives that support the well-being and development of the communities in which we
operate. These activities include environmental stewardship, maintaining ethical and governance
standards, community development programmes, and contributing to regional economic growth.
2025 highlights
Taxes paid since inception to the local
federal government authorities of the RK
US$1.2bn+
Investments in the country and since 1997 US$2.8bn+
Taxes paid to governments US$23.8m
Total invested in social and community
development initiatives
US$53.2 thousand
Targeted support provided across three
rural districts directly connected to
operations
Yantvartsevo, Solu Kol
and Beles
Philanthropy: major projects for 2025
Nostrum recognises the importance of man
aging and mitigating the social impacts of its operations and remains
committed to supporting the sustainable development of the
communities in which it operates. In 2025, the Group continued to
implement targeted social support initiatives focused primarily on
rural districts directly connected to its production activities.
During the year, particular emphasis was placed on supporting local
communities within the Yantvartsevo rural district and the Solu Kol
and Beles rural districts. Financial assistance of US$26.1 thousand
(KZT13.6m) was allocated to address priority community needs, with a
significant proportion directed towards educational infrastructure and
youth development.
Key educational initiatives included:
• US$5.8 thousand (KZT 3m) allocated to renovate a children’s mini-
center within the Yantvartsevo School –Nursery –Kindergarten
complex;
• US$2.4 thousand (KZT1.3m) provided to Beles School for post-
renovation facility improvements and the purchase of school supplies
for children from low-income families;
• US$3.5 thousand (KZT1.8m) allocated to Solu Kol School for the
procurement of classroom furniture and an interactive educational
panel.
Beyond educational support, Nostrum contributed to broader
regional development and cultural initiatives.
Major regional and cultural projects in 2025 included:
• US$9.6 thousand (KZT5m) to support City Day cultural celebrations;
• US$3.8 thousand (KZT2m) for the production of a children’s web series
titled “Media Academy”, aimed at fostering creativity and digital
literacy among young people;
• US$3.8 thousand (KZT2m) towards the preparation of an encyclopedia
documenting the agricultural history of the Baiterek district;
• US$6.3 thousand (KZT3.3m) in Solu Kol for the purchase of drainage
pipes to support the construction of internal village roads.
In total, Nostrum invested US$53.2 thousand (KZT27.7m) in social
assistance and community development initiatives in 2025.
Civil duty: Payment to governments
Nostrum is committed to the standards of transparency and
accountability in its operations and financial interactions with
governments. Responsible corporate conduct and clear disclosure
underpin stakeholder trust and long-term value creation. Our
structured public and government relations framework governs
engagement with national and local authorities, regulators and
community representatives, ensuring that all interactions are
conducted with consistency, integrity and alignment with our
corporate values.
We recognise that strong partnership between business and society is
essential for sustainable development. Nostrum continues to
contribute to the regions in which it operates through initiatives that
support social stability, infrastructure development and community
wellbeing. Through targeted programmes and ongoing stakeholder
dialogue, we seek to deliver lasting and positive socio-economic
impact around our core operations.
In 2025, Nostrum and its subsidiaries paid a total of US$23.8m (in
2024: US$27.93m) to governments. We will report on 2026 payments
to governments in the first half of 2027. For more details, please see
the Governance page of our website.
Nostrum approaches its civic duties with strong commitment,
understanding that the responsible and accurate payment of taxes
plays a vital role in fostering local economic growth and enabling
public authorities to effectively support their communities.
The Group did not engage in any lobbying or political finance activities
in 2025 and had no lobbying or political expenses.
The Group is a member of certain business and sectoral groups for
which it pays a standard membership fee, as specified below:
• Atameken (the National Chamber of Commerce of Kazakhstan, which
represents the interests of businesses, covering all business areas, and
the main task of which is the protection of the rights and interests of
the business community in Kazakhstan). Membership fee paid for
2025: US$31,280 (2024: US$24,042).
• KazEnergy (an association including numerous companies operating in
the oil and gas industry, as well as in the electric power and the
nuclear industries, with the goal of promoting the sustainable and
balanced development of the energy industry of the Republic of
Kazakhstan). Membership fee paid for 2025: US$39,666 (2024:
US$20,875).
Economic responsibility: Spend with local suppliers
We maintain a strong focus on partnering with local companies. In
2025, 90.4% (2024: 88.2%) of our supplier spending was directed to
RoK national suppliers, reflecting our continued commitment to the
domestic supply chain.
Environmentally friendly: Liquidation fund contribution
Under the terms of the Chinarevskoye PSA, Nostrum is obliged to
accumulate a cash reserve liquidation fund which by the end of the
PSA should total US$12.0m earmarked for the elimination of
environmental consequences of our operating activities. At the end of
2025, US$9.6m had been accumulated (2024: US$9.1m).
High ethical standards: Anti-Corruption and Bribery Policy
For more information on the Group’s Anti-Corruption and Bribery
Policy, please see page 74.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
48
STRATEGIC REPORT
Environmental stewardship
Nostrum recognises the environmental impact of its operations and aims to manage these in a
responsible manner. The Company focuses on reducing emissions, improving resource efficiency
and strengthening environmental monitoring across its activities. We operate in compliance with
environmental regulations in the RoK and continue to implement initiatives to improve
environmental performance.
2025 highlights
Climate change
Nostrum recognizes the environmental impact of its operations and
aims to manage these in line with principles of sustainable resource
management, environmental responsibility, and climate risk
management.
As an oil and gas producer, the Group generates greenhouse gas
(GHG) emissions, and seeks to reduce its environmental footprint
through operational improvements and emissions management
measures.
Nostrum operates in compliance with the emission limits specified in
the Environmental Emissions Permit issued by Kazakhstan. In addition,
internal targets are established to support ongoing improvements in
environmental performance.
Emission limits under these permits are established based on
historical operational data, covering 2-3 preceding years.
The Board is accountable for ensuring that Nostrum fully complies
with Listing Rule 14.3.27R and Listing Rule 9.8.6R(8) in this annual
report. In addition, the Board oversees governance, strategic
direction, risk assessment, management frameworks and key
performance indicators related to climate change and GHG emissions.
GHG emissions reporting approach
Nostrum aims to reduce GHG emissions and continues to invest in
technologies aimed at improving its emissions performance. The
Company operates in compliance with applicable GHG regulations in
the UK and Kazakhstan and has monitored and disclosed its GHG
emissions since 2011. The Company continues to develop internal
processes to improve monitoring, transparency and data availability in
relation to emissions management.
The Company’s GHG reporting period corresponds to the reporting
period covered by the Directors’ Report.
Most of the Group’s emissions arise from the combustion of fuel gas
in gas turbine units, boilers, process heaters, and compressors.
Additional emissions occur from flaring where no technically or
economically viable alternatives are available. In 2025, GHG emissions
increased primarily as a result of processing third-party hydrocarbons
at our facilities, as well as drilling activities.
Under the 2022 –2025 Kazakhstan National GHG Allocation Plan,
Nostrum was allocated 201,283 tonnes of CO₂e. In 2025, CO₂
emissions amounted to 216,361 tonnes, while total GHG emissions
expressed in CO₂ equivalent reached 226,220 tonnes, including
methane, nitrous oxide and hydrofluorocarbons).
Throughout 2025, GTU-1/2 and GTU-3 operated continuously, and the
Company continued processing feedstock from Ural O&G. Compared
with 2024, total GHG emissions declined by 12%, primarily due to a
higher share of gas combusted in the incinerator rather than flared, as
well as lower diesel fuel consumption. During the year, the Group
incurred fines and penalties totaling US$35 thousand relating to
exceedances at certain emission sources. The Company continues to
work to ensure full compliance with environmental legislation.
In 2025, the Company implemented its energy strategy through a
number of initiatives. Emissions have increased since 2023, primarily
due to the expansion of operations and higher fuel consumption
requirements.
More detailed information on GHG emissions in 2025 are presented
on pages 52-54.
GHG emissions for Scope 1 and Scope 2 (tCO 2 e)
In 2025, the Company operated an automated emissions monitoring
system (EMS) as part of its environmental oversight. The full EMS
suite is installed at the 26 MW Gas Turbine Station and transmits
measurements in real time to the National Database on
Environmental and Natural Resource Conditions. The system tracks
nitrogen dioxide, carbon monoxide, sulfur dioxide, and methane in
exhaust gases, and also records flow rate, temperature, pressure, and
relative humidity.
Nostrum operates in compliance with the RoK requirements under
the Digital Kazakhstan Programme by advancing digital technology
adoption and reducing regulatory risks. The Company continues to
integrate its facilities into key digital systems, including:
• ISUNG (Information System for Accounting of Oil and Gas Condensate
and Gas);
• CEMS (Continuous Emissions Monitoring System);
• Automated Reporting System (ARS) for internal Production, Wells &
Facilities Operations, and GHG Reporting;
• Government Reporting System maintenance to ensure accuracy and
compliance.
In 2025, the expansion of ARS supported improvements in real-time data
integration, emissions monitoring, compliance, and efficiency. A major
milestone was integrating Ural O&G feedstock into processing facilities.
Progress was also made in integrating GTU-3 data.
Real-Time Data Monitoring & Integration:
• integrated CEMS (78 tags), ISUNG (29 tags), GTU-3 (76 tags), and Ural
O&G (276 tags) into ARS, improving real-time emissions tracking and
automation;
Total GHG emissions 226,220 tons
Emissions intensity ratios for total
GHG emissions
25,369 tCO 2 /mmboe
Processed waste by 3rd party
companies
149.2%
2021 2022 2023 2024 2025
187,479 160,630 180,157 256,089 226,220
STRATEGIC REPORT
Environmental stewardship
Nostrum recognises the environmental impact of its operations and aims to manage these in a
responsible manner. The Company focuses on reducing emissions, improving resource efficiency
and strengthening environmental monitoring across its activities. We operate in compliance with
environmental regulations in the RoK and continue to implement initiatives to improve
environmental performance.
2025 highlights
Climate change
Nostrum recognizes the environmental impact of its operations and
aims to manage these in line with principles of sustainable resource
management, environmental responsibility, and climate risk
management.
As an oil and gas producer, the Group generates greenhouse gas
(GHG) emissions, and seeks to reduce its environmental footprint
through operational improvements and emissions management
measures.
Nostrum operates in compliance with the emission limits specified in
the Environmental Emissions Permit issued by Kazakhstan. In addition,
internal targets are established to support ongoing improvements in
environmental performance.
Emission limits under these permits are established based on
historical operational data, covering 2-3 preceding years.
The Board is accountable for ensuring that Nostrum fully complies
with Listing Rule 14.3.27R and Listing Rule 9.8.6R(8) in this annual
report. In addition, the Board oversees governance, strategic
direction, risk assessment, management frameworks and key
performance indicators related to climate change and GHG emissions.
GHG emissions reporting approach
Nostrum aims to reduce GHG emissions and continues to invest in
technologies aimed at improving its emissions performance. The
Company operates in compliance with applicable GHG regulations in
the UK and Kazakhstan and has monitored and disclosed its GHG
emissions since 2011. The Company continues to develop internal
processes to improve monitoring, transparency and data availability in
relation to emissions management.
The Company’s GHG reporting period corresponds to the reporting
period covered by the Directors’ Report.
Most of the Group’s emissions arise from the combustion of fuel gas
in gas turbine units, boilers, process heaters, and compressors.
Additional emissions occur from flaring where no technically or
economically viable alternatives are available. In 2025, GHG emissions
increased primarily as a result of processing third-party hydrocarbons
at our facilities, as well as drilling activities.
Under the 2022 –2025 Kazakhstan National GHG Allocation Plan,
Nostrum was allocated 201,283 tonnes of CO₂e. In 2025, CO₂
emissions amounted to 216,361 tonnes, while total GHG emissions
expressed in CO₂ equivalent reached 226,220 tonnes, including
methane, nitrous oxide and hydrofluorocarbons).
Throughout 2025, GTU-1/2 and GTU-3 operated continuously, and the
Company continued processing feedstock from Ural O&G. Compared
with 2024, total GHG emissions declined by 12%, primarily due to a
higher share of gas combusted in the incinerator rather than flared, as
well as lower diesel fuel consumption. During the year, the Group
incurred fines and penalties totaling US$35 thousand relating to
exceedances at certain emission sources. The Company continues to
work to ensure full compliance with environmental legislation.
In 2025, the Company implemented its energy strategy through a
number of initiatives. Emissions have increased since 2023, primarily
due to the expansion of operations and higher fuel consumption
requirements.
More detailed information on GHG emissions in 2025 are presented
on pages 52-54.
GHG emissions for Scope 1 and Scope 2 (tCO 2 e)
In 2025, the Company operated an automated emissions monitoring
system (EMS) as part of its environmental oversight. The full EMS
suite is installed at the 26 MW Gas Turbine Station and transmits
measurements in real time to the National Database on
Environmental and Natural Resource Conditions. The system tracks
nitrogen dioxide, carbon monoxide, sulfur dioxide, and methane in
exhaust gases, and also records flow rate, temperature, pressure, and
relative humidity.
Nostrum operates in compliance with the RoK requirements under
the Digital Kazakhstan Programme by advancing digital technology
adoption and reducing regulatory risks. The Company continues to
integrate its facilities into key digital systems, including:
• ISUNG (Information System for Accounting of Oil and Gas Condensate
and Gas);
• CEMS (Continuous Emissions Monitoring System);
• Automated Reporting System (ARS) for internal Production, Wells &
Facilities Operations, and GHG Reporting;
• Government Reporting System maintenance to ensure accuracy and
compliance.
In 2025, the expansion of ARS supported improvements in real-time data
integration, emissions monitoring, compliance, and efficiency. A major
milestone was integrating Ural O&G feedstock into processing facilities.
Progress was also made in integrating GTU-3 data.
Real-Time Data Monitoring & Integration:
• integrated CEMS (78 tags), ISUNG (29 tags), GTU-3 (76 tags), and Ural
O&G (276 tags) into ARS, improving real-time emissions tracking and
automation;
Total GHG emissions 226,220 tons
Emissions intensity ratios for total
GHG emissions
25,369 tCO 2 /mmboe
Processed waste by 3rd party
companies
149.2%
2021 2022 2023 2024 2025
187,479 160,630 180,157 256,089 226,220
ESG REVIEW
49 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
• established direct data pipelines between SCADA and ARS for
seamless feedstock capture;
• launched a ZKM Data Pipeline test environment for validation before
full-scale deployment.
Regulatory Compliance & Emission Tracking:
• achieved compliance with Ministerial Ecology Order, integrating
metering devices into the National Emission Monitoring Database;
• integrated gas turbine exhaust data into CEMS for enhanced emissions
monitoring;
• upgraded metering systems across gas treatment, flare, fuel gas, and
reinjection units to meet regulatory requirements.
Current and future GHG reduction initiatives
Nostrum uses a range of technologies to detect, monitor and prevent
GHG emissions. The Company has the following technology in place to
proactively monitor, limit and reduce its GHG emissions:
• 397 methane detectors to monitor equipment maintenance and
pressure valve replacement exercises;
• Mobile methane detectors in gas flowlines;
• Cross exchangers in all Gas Treatment Units to pre-heat cold streams
entering a heated process system by use of heat from hot streams
exiting the system and requiring cooling;
• Waste heat recovery system at CGTU-3 – exhaust gases from the
compressor units are used for heating the buildings and preheating
the utility fluids in the plant, resulting in reduced fuel gas
consumption;
• Vapour Recovery Systems (VRS) installed in oil and condensate tanks
to inhibit hydrocarbon evaporation during storage and transfer;
• Hydrocarbon Recovery System (HCRS) installed in LPG loading terminal
to prevent hydrocarbon ‘bleeding’ into the atmosphere;
• 26 MW power station generates electricity for use in the field and
therefore limits the use of diesel-powered heaters;
• Fuel switch at Camp 1 for Boilers.
• Well stock has local skids that will automatically shut-in the well bore
to prevent full blowdown of the surface lines and resultant GHG
emissions;
• The Continuous Emission Monitoring System (CEMS) was successfully
integrated into the ARS through the corporate network, and the
related Site Integration Test (SIT) was conducted for the government
Automated Emission;
• Monitoring System (AEMS) in November 2024.
• The Company continues to benefit from previously implemented
projects that contribute to ongoing GHG emissions reductions,
including:
• Well automation flaring prevention on three wells during processing –
1,983.61 tCO 2 e /year;
• Electric driven LPS compressor instead of fuel gas driven – 1,697.76
tCO 2 /year;
• Waste Heat Recovery project at GTU-3 with an annual GHG reduction
of 2,072 tonnes of CO 2 ;
• Flaring reduction to the minimum due to proper production
optimization management, real time production monitoring and by
shutting down the wells during any intervention with annual GHG
reduction 4,000+ tonnes of CO 2 .
Gas utilisation and flaring (MCM)
GTU-3 commissioning and the intake of Ural O&G third-party
feedstock were completed with minimal flaring and limited additional
emissions.
Air emissions actual/permitted (tonnes)
Actual Permitted
2023 2024 2025 2023 2024 2025
Petroleum hydrocarbons (C 2 -C 19 ) 2,547 1,767 1,305 2,581 1,921 1,311
Carbon monoxide (CO) 1,177 1,537 1,744 2,371 2,497 2,511
Methane (CH 4 ) 254 317 363 396 405 423
Nitrogen oxides (Nox) 227 326 328 674 863 611
Sulphur dioxide (SO 2 ) 34 56 94 98 121 110
Acids and other organic chemicals (Organics) 43 32 32 45 41 33
Dust, suspended solids, particulate matter (PM) 95 74 153 120 120 171
Volatile organic compounds (VOCs) 32 23 26 32 24 26
Hydrogen sulphide (H 2 S) 3 3 2 3 3 2
Metals and inorganic compounds (Metals) 1 1 1 1 1 1
Total air emissions including: 4,413 4,136 4,047 6,322 5,995 5,200
Environmental disclosures
The Company is also evaluating the following technologies:
• Full asset digitalisation – Integrated production accounting and GHG
emission quantification tools that give a holistic view of the entire
hydrocarbon value chain as well as forecasting capabilities. Support
digital transformation initiative of our assets;
• Perform Digital transformation of the Company by 2035;
• Several projects that aim reduction of the fuel gas consumption are
being evaluated targeting substantial reduction of GHG Emissions and
None GHG Air Emissions: Installation of a Waste Heat Recovery Boiler
for amine regeneration heat and technology line requirements;
• To reduce our dependence on fossil fuels by investing in renewable
energy, the company is currently investigating different options like
application of thin-film PV (Powerfoil) as solar solution for storage
tanks and roofs.
While technologies for detecting and quantifying GHG emissions are
continually developing, the Company continues to assess available
solutions to support emissions reduction. Additional initiatives are
under evaluation for 2026 and subsequent years.
In 2025, the Company continued to disclose climate- and water-
related information through CDP, the global environmental disclosure
platform. The submission covered areas including strategy, risks and
opportunities, targets, governance, policies and emissions.
CDP assigned the Company a score of B for both Climate and Water,
consistent with 2024 and corresponding to the Management level.
Starting from 2024 the Company also expanded its disclosure to
include biodiversity and plastics.
2021 2022 2023 2024 2025
Gas flaring 15.3 6.5 8.3 8.7 15.4
Gas utilization 74.0 63.9 59.9 49.1 43.4
49 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
• established direct data pipelines between SCADA and ARS for
seamless feedstock capture;
• launched a ZKM Data Pipeline test environment for validation before
full-scale deployment.
Regulatory Compliance & Emission Tracking:
• achieved compliance with Ministerial Ecology Order, integrating
metering devices into the National Emission Monitoring Database;
• integrated gas turbine exhaust data into CEMS for enhanced emissions
monitoring;
• upgraded metering systems across gas treatment, flare, fuel gas, and
reinjection units to meet regulatory requirements.
Current and future GHG reduction initiatives
Nostrum uses a range of technologies to detect, monitor and prevent
GHG emissions. The Company has the following technology in place to
proactively monitor, limit and reduce its GHG emissions:
• 397 methane detectors to monitor equipment maintenance and
pressure valve replacement exercises;
• Mobile methane detectors in gas flowlines;
• Cross exchangers in all Gas Treatment Units to pre-heat cold streams
entering a heated process system by use of heat from hot streams
exiting the system and requiring cooling;
• Waste heat recovery system at CGTU-3 – exhaust gases from the
compressor units are used for heating the buildings and preheating
the utility fluids in the plant, resulting in reduced fuel gas
consumption;
• Vapour Recovery Systems (VRS) installed in oil and condensate tanks
to inhibit hydrocarbon evaporation during storage and transfer;
• Hydrocarbon Recovery System (HCRS) installed in LPG loading terminal
to prevent hydrocarbon ‘bleeding’ into the atmosphere;
• 26 MW power station generates electricity for use in the field and
therefore limits the use of diesel-powered heaters;
• Fuel switch at Camp 1 for Boilers.
• Well stock has local skids that will automatically shut-in the well bore
to prevent full blowdown of the surface lines and resultant GHG
emissions;
• The Continuous Emission Monitoring System (CEMS) was successfully
integrated into the ARS through the corporate network, and the
related Site Integration Test (SIT) was conducted for the government
Automated Emission;
• Monitoring System (AEMS) in November 2024.
• The Company continues to benefit from previously implemented
projects that contribute to ongoing GHG emissions reductions,
including:
• Well automation flaring prevention on three wells during processing –
1,983.61 tCO 2 e /year;
• Electric driven LPS compressor instead of fuel gas driven – 1,697.76
tCO 2 /year;
• Waste Heat Recovery project at GTU-3 with an annual GHG reduction
of 2,072 tonnes of CO 2 ;
• Flaring reduction to the minimum due to proper production
optimization management, real time production monitoring and by
shutting down the wells during any intervention with annual GHG
reduction 4,000+ tonnes of CO 2 .
Gas utilisation and flaring (MCM)
GTU-3 commissioning and the intake of Ural O&G third-party
feedstock were completed with minimal flaring and limited additional
emissions.
Air emissions actual/permitted (tonnes)
Actual Permitted
2023 2024 2025 2023 2024 2025
Petroleum hydrocarbons (C 2 -C 19 ) 2,547 1,767 1,305 2,581 1,921 1,311
Carbon monoxide (CO) 1,177 1,537 1,744 2,371 2,497 2,511
Methane (CH 4 ) 254 317 363 396 405 423
Nitrogen oxides (Nox) 227 326 328 674 863 611
Sulphur dioxide (SO 2 ) 34 56 94 98 121 110
Acids and other organic chemicals (Organics) 43 32 32 45 41 33
Dust, suspended solids, particulate matter (PM) 95 74 153 120 120 171
Volatile organic compounds (VOCs) 32 23 26 32 24 26
Hydrogen sulphide (H 2 S) 3 3 2 3 3 2
Metals and inorganic compounds (Metals) 1 1 1 1 1 1
Total air emissions including: 4,413 4,136 4,047 6,322 5,995 5,200
Environmental disclosures
The Company is also evaluating the following technologies:
• Full asset digitalisation – Integrated production accounting and GHG
emission quantification tools that give a holistic view of the entire
hydrocarbon value chain as well as forecasting capabilities. Support
digital transformation initiative of our assets;
• Perform Digital transformation of the Company by 2035;
• Several projects that aim reduction of the fuel gas consumption are
being evaluated targeting substantial reduction of GHG Emissions and
None GHG Air Emissions: Installation of a Waste Heat Recovery Boiler
for amine regeneration heat and technology line requirements;
• To reduce our dependence on fossil fuels by investing in renewable
energy, the company is currently investigating different options like
application of thin-film PV (Powerfoil) as solar solution for storage
tanks and roofs.
While technologies for detecting and quantifying GHG emissions are
continually developing, the Company continues to assess available
solutions to support emissions reduction. Additional initiatives are
under evaluation for 2026 and subsequent years.
In 2025, the Company continued to disclose climate- and water-
related information through CDP, the global environmental disclosure
platform. The submission covered areas including strategy, risks and
opportunities, targets, governance, policies and emissions.
CDP assigned the Company a score of B for both Climate and Water,
consistent with 2024 and corresponding to the Management level.
Starting from 2024 the Company also expanded its disclosure to
include biodiversity and plastics.
2021 2022 2023 2024 2025
Gas flaring 15.3 6.5 8.3 8.7 15.4
Gas utilization 74.0 63.9 59.9 49.1 43.4
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
50
STRATEGIC REPORT
Decommissioning
Under subsoil use regulations, all production facilities owned by
subsoil users, together with the related land, must be restored to a
condition that ensures the safety of life, protects public health, and
safeguards the environment. In addition, the impacts of subsoil users’
operations must be addressed in accordance with the legislation of
the Republic of Kazakhstan. The closure of subsoil use facilities is
carried out based on a Liquidation Project developed by a design
organisation holding a valid licence for environmental protection
services. The required decommissioning measures are set out in the
Liquidation Project prepared by NIPI Neftegas.
Waste, water and soil management
Nostrum conducts extensive environmental monitoring across its
operations, supported by structured management systems for waste,
water, and soil. The Company performs routine analyses of air, soil,
and groundwater to confirm compliance with Kazakhstan’s sanitary
and epidemiological requirements.
To meet regulatory obligations, Nostrum has implemented
monitoring and reporting frameworks that enable continuous
environmental evaluation of waste, water, and soil at the
Chinarevskoye field.
Waste management
Waste management includes daily monitoring of temporary industrial
and municipal waste storage areas, along with waste recording,
transport arrangements, and the handover of waste to authorised
third-party contractors.
All generated waste is transferred under a contract to the following
third-party specialised companies:
• West Dala LLP
• Green Eco Technology LLP
• TuranPromResurs LLP
• Mustafin IP
In 2025, the Company generated 2,396 tonnes of waste across its
facilities, covering 40 different categories of industrial waste (e.g.,
used filters and cartridges, medical waste, batteries) and domestic
waste (e.g., plastic bottles, used paper). Overall, 149.2% of the
generated volume was transferred for processing by the above-
mentioned companies.
To minimise waste generation, the Company sends plastic bottles and
paper waste to specialised recyclers. Following recycling, these
materials are converted into secondary raw materials for use in the
national economy. In addition, certain production wastes—such as
drilling mud and oil sludge—are treated at a processing facility to
produce technogenic soil, which is then used for road construction
and for backfilling pits and trenches.
Drilling waste was processed in the Field by GreenEco Technology LLP,
and soil and water survey results confirmed compliance with
applicable environmental legislation.
Waste not sent for disposal (recycling, reuse)
80% of the generated waste consists of spent drilling mud (SDM),
which is produced during well drilling and workover operations.
According to the designated technology, SDM is placed in SDM and
BSV (drilling waste water) pits at the Drilling Waste Disposal
Preparation Facility (DWDPF).
In the SDM and BSV (drilling waste water) pits, gravitational settling
occurs: the solid fraction settles at the bottom, while the water
overflows into the BSV pit. In the BSV pit, further gravitational settling
takes place, after which the water is sent for treatment. The treated
water is then injected into a disposal site for formation water and
industrial effluents. The remaining waste is transferred for disposal.
Water management
As part of our environmental commitments, we recognise the critical
importance of water resources, particularly in regions with limited
availability. Ensuring sustainable access to freshwater is a key priority.
We are committed to efficient water management, striving to
implement the most effective techniques to optimise freshwater use
and minimise our operational water footprint. Our approach focuses
on responsible water consumption, comprehensive impact
assessments, targeted reduction measures, continuous monitoring,
and corrective actions to protect shared water resources across all our
assets.
Nostrum’s water injection requirements are up to 1,200 m 3 per day
(average injection approximately 700-800 m 3 per day), of which 400-
550 m 3 per day are injected from formation water production. The
deficit is compensated through production from water wells. None of
these water wells competes with fresh water supply to nearby
communities. Five out of seven injectors are currently in operation
with one disposal well used as a backup. The current system has
sufficient capacity and flexibility to handle forecast water injection
volumes.
The Company has initiated a series of measures to improve formation
water treatment and injection processes. These measures include
focusing its resources on process improvement in the treatment of
water used in upstream operations which will lead to combating
corrosion, reducing oil contamination, reducing growth of sulfate,
reducing bacteria and the formation of inorganic scale.
A full review was initiated in 2021-2022 on process effectiveness and
chemical efficiencies and mitigating actions taken ensure compliance
with Kazakhstan’s environmental regulations and has the additional
benefit of reducing water treatment costs.
Water Treatment & Injection System Upgrade Phase II project pilot
stage has been completed in 2024 including modification and
adjustment of the existing treatment system (Modification inside
existing Oil Treatment Unit – utilisation of condensate storage tank V-
32220 as water settlement tank) resulting in confirmed improved
injected water quality, less waste (oil sludge) generation and
utilisation and less volatile HC evaporation.
In 2025, as part of further efforts to enhance the efficiency of the
Company’s water treatment system, two existing water storage and
gravity settlement tanks were upgraded under an alternative process
scheme, without using tank V-32220, which was returned to service
for condensate storage.
The implemented measures resulted in improved injected water
quality, reduced oil sludge generation, and lower disposal costs.
Since early 2026, scheduled pilot field trials of chemical reagents—
including demulsifiers, corrosion inhibitors (for the protection of
process equipment and pipelines), and coagulants—have been
conducted to further improve crude oil dehydration and produced
water treatment processes. The pilot project is ongoing.
Overall, the completed and ongoing initiatives contribute to enhanced
reliability of the water treatment system, stable operational
performance, and optimisation of the Company’s operating costs.
STRATEGIC REPORT
Decommissioning
Under subsoil use regulations, all production facilities owned by
subsoil users, together with the related land, must be restored to a
condition that ensures the safety of life, protects public health, and
safeguards the environment. In addition, the impacts of subsoil users’
operations must be addressed in accordance with the legislation of
the Republic of Kazakhstan. The closure of subsoil use facilities is
carried out based on a Liquidation Project developed by a design
organisation holding a valid licence for environmental protection
services. The required decommissioning measures are set out in the
Liquidation Project prepared by NIPI Neftegas.
Waste, water and soil management
Nostrum conducts extensive environmental monitoring across its
operations, supported by structured management systems for waste,
water, and soil. The Company performs routine analyses of air, soil,
and groundwater to confirm compliance with Kazakhstan’s sanitary
and epidemiological requirements.
To meet regulatory obligations, Nostrum has implemented
monitoring and reporting frameworks that enable continuous
environmental evaluation of waste, water, and soil at the
Chinarevskoye field.
Waste management
Waste management includes daily monitoring of temporary industrial
and municipal waste storage areas, along with waste recording,
transport arrangements, and the handover of waste to authorised
third-party contractors.
All generated waste is transferred under a contract to the following
third-party specialised companies:
• West Dala LLP
• Green Eco Technology LLP
• TuranPromResurs LLP
• Mustafin IP
In 2025, the Company generated 2,396 tonnes of waste across its
facilities, covering 40 different categories of industrial waste (e.g.,
used filters and cartridges, medical waste, batteries) and domestic
waste (e.g., plastic bottles, used paper). Overall, 149.2% of the
generated volume was transferred for processing by the above-
mentioned companies.
To minimise waste generation, the Company sends plastic bottles and
paper waste to specialised recyclers. Following recycling, these
materials are converted into secondary raw materials for use in the
national economy. In addition, certain production wastes—such as
drilling mud and oil sludge—are treated at a processing facility to
produce technogenic soil, which is then used for road construction
and for backfilling pits and trenches.
Drilling waste was processed in the Field by GreenEco Technology LLP,
and soil and water survey results confirmed compliance with
applicable environmental legislation.
Waste not sent for disposal (recycling, reuse)
80% of the generated waste consists of spent drilling mud (SDM),
which is produced during well drilling and workover operations.
According to the designated technology, SDM is placed in SDM and
BSV (drilling waste water) pits at the Drilling Waste Disposal
Preparation Facility (DWDPF).
In the SDM and BSV (drilling waste water) pits, gravitational settling
occurs: the solid fraction settles at the bottom, while the water
overflows into the BSV pit. In the BSV pit, further gravitational settling
takes place, after which the water is sent for treatment. The treated
water is then injected into a disposal site for formation water and
industrial effluents. The remaining waste is transferred for disposal.
Water management
As part of our environmental commitments, we recognise the critical
importance of water resources, particularly in regions with limited
availability. Ensuring sustainable access to freshwater is a key priority.
We are committed to efficient water management, striving to
implement the most effective techniques to optimise freshwater use
and minimise our operational water footprint. Our approach focuses
on responsible water consumption, comprehensive impact
assessments, targeted reduction measures, continuous monitoring,
and corrective actions to protect shared water resources across all our
assets.
Nostrum’s water injection requirements are up to 1,200 m 3 per day
(average injection approximately 700-800 m 3 per day), of which 400-
550 m 3 per day are injected from formation water production. The
deficit is compensated through production from water wells. None of
these water wells competes with fresh water supply to nearby
communities. Five out of seven injectors are currently in operation
with one disposal well used as a backup. The current system has
sufficient capacity and flexibility to handle forecast water injection
volumes.
The Company has initiated a series of measures to improve formation
water treatment and injection processes. These measures include
focusing its resources on process improvement in the treatment of
water used in upstream operations which will lead to combating
corrosion, reducing oil contamination, reducing growth of sulfate,
reducing bacteria and the formation of inorganic scale.
A full review was initiated in 2021-2022 on process effectiveness and
chemical efficiencies and mitigating actions taken ensure compliance
with Kazakhstan’s environmental regulations and has the additional
benefit of reducing water treatment costs.
Water Treatment & Injection System Upgrade Phase II project pilot
stage has been completed in 2024 including modification and
adjustment of the existing treatment system (Modification inside
existing Oil Treatment Unit – utilisation of condensate storage tank V-
32220 as water settlement tank) resulting in confirmed improved
injected water quality, less waste (oil sludge) generation and
utilisation and less volatile HC evaporation.
In 2025, as part of further efforts to enhance the efficiency of the
Company’s water treatment system, two existing water storage and
gravity settlement tanks were upgraded under an alternative process
scheme, without using tank V-32220, which was returned to service
for condensate storage.
The implemented measures resulted in improved injected water
quality, reduced oil sludge generation, and lower disposal costs.
Since early 2026, scheduled pilot field trials of chemical reagents—
including demulsifiers, corrosion inhibitors (for the protection of
process equipment and pipelines), and coagulants—have been
conducted to further improve crude oil dehydration and produced
water treatment processes. The pilot project is ongoing.
Overall, the completed and ongoing initiatives contribute to enhanced
reliability of the water treatment system, stable operational
performance, and optimisation of the Company’s operating costs.
ESG REVIEW
51 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Wastewater discharges
Reasonable and careful conservation of the ecosystem with clean
water and access to water resources is one of the main factors of
sustainable development. The Company’s main approach to solving
the problem of rational water use is to use water recycling and reuse
systems, increasing the degree of wastewater treatment and reducing
water abstraction from natural sources.
To prevent the negative impact of wastewater on the environment,
we process wastewater using special artificial reservoirs such as
evaporation ponds, filtration fields and a landfill for formation water
and industrial wastewater.
We have the following artificial ponds:
• Evaporation ponds GTP-1,2,3 “conditionally clean” storm wastewater;
• Polygon for formation water and industrial wastewater disposal;
• Filtration fields, domestic wastewater after treatment at the liquid
mud plant.
Recycled at own production
Year 2023 2024 2025
Facility, tonnes 750 4,941 200
Waste designated for landfill
Year 2023 2024 2025
Disposed of at third-
party landfills,
tonnes
313.567 291.280 190.707
Formation water production/water profile (average daily) (MCM)
Disposal of Domestic and Sanitary Wastewater in 2020-2025
2021 2022 2023 2024 2025
Permitted Actual Permitted Actual Permitted Actual Permitted Actual Permitted Actual
Disposed Sanitary
Wastewater, m 3
85,775 26,188 85,775 26,191 58,100 26,820 58,100 29,805 58,100 34,193
Discharges to ponds
evaporators, m 3 GTU-1,2,3
84,810 22,338 84,810 44,748 84,810 43,059 84,810 43,389 77,117 42,692
Drilling wastewater and
associated water, m 3
45,900 4,573 35,000 2,757 4,572 2,787 10,487 4,220 8,641 3,033
2023 2024 2025
Water Intake, m 3 129,842 121,344 102,117
Water Discharges, m 3 334,603 327,674 320,918
Total water consumption, m 3 246,344 320,314 327,762
For more detailed information, please visit our website at www.nostrumoilandgas.com.
Energy and resource efficiency policy and
methane emissions management policy
The Company aims to manage energy use as efficiently, economically,
and responsibly as possible. Nostrum is committed to incorporating
energy efficiency considerations into the development of production
operations, process and facility design, and the procurement of goods
and services—whether this relates to optimising existing assets,
evaluating new upstream opportunities, or implementing midstream
tiebacks.
A key focus in 2025 was ensuring the stable and energy-efficient
integration of third-party sour feedstock from Ural O&G into our
processing facilities. Through thorough operational preparation and
the introduction of baseline rules and controls, Nostrum was able to
limit its carbon footprint during the extensive and technically complex
Ural O&G pilot delivery programme. At the Chinarevskoye asset, in
light of ageing equipment and potential integrity degradation, the
Company also prioritised strengthening flow assurance by developing
and implementing a Flow Assurance Process Guideline.
This guideline is intended to maintain uninterrupted hydrocarbon
flow from the reservoir to the point of sale in line with the production
plan, while supporting integrity preservation, product specification
compliance, adherence to HSE requirements, and other flow-
assurance processes.
Based on 2025 approved project list and production forecast:
2021 2022 2023 2024 2025 2026
Projected specific GHG
emissions (Sc1+Sc2)
tCO 2 e per kboe of
production feed-stock
29.5 34.6 47.2 35.2 25.3 30.0
Projected specific Air
emissions t per kboe
of production feed-
stock
0.7 0.9 1.2 0.8 1.08 0.7
Projected specific waste
generation t per kboe
of production feed-
stock
0.5 0.6 0.7 1.0 0.4 0.5
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
AvgWatProd
m 3 /d
10 15 164 393 487 813 723 837 538 568 577 513 476 440 320 241
AvgWatInj
m 3 /d
510 682 962 1,007 766 809 808 1,276 1,348 983 785 842 788 718 249 241
51 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Wastewater discharges
Reasonable and careful conservation of the ecosystem with clean
water and access to water resources is one of the main factors of
sustainable development. The Company’s main approach to solving
the problem of rational water use is to use water recycling and reuse
systems, increasing the degree of wastewater treatment and reducing
water abstraction from natural sources.
To prevent the negative impact of wastewater on the environment,
we process wastewater using special artificial reservoirs such as
evaporation ponds, filtration fields and a landfill for formation water
and industrial wastewater.
We have the following artificial ponds:
• Evaporation ponds GTP-1,2,3 “conditionally clean” storm wastewater;
• Polygon for formation water and industrial wastewater disposal;
• Filtration fields, domestic wastewater after treatment at the liquid
mud plant.
Recycled at own production
Year 2023 2024 2025
Facility, tonnes 750 4,941 200
Waste designated for landfill
Year 2023 2024 2025
Disposed of at third-
party landfills,
tonnes
313.567 291.280 190.707
Formation water production/water profile (average daily) (MCM)
Disposal of Domestic and Sanitary Wastewater in 2020-2025
2021 2022 2023 2024 2025
Permitted Actual Permitted Actual Permitted Actual Permitted Actual Permitted Actual
Disposed Sanitary
Wastewater, m 3
85,775 26,188 85,775 26,191 58,100 26,820 58,100 29,805 58,100 34,193
Discharges to ponds
evaporators, m 3 GTU-1,2,3
84,810 22,338 84,810 44,748 84,810 43,059 84,810 43,389 77,117 42,692
Drilling wastewater and
associated water, m 3
45,900 4,573 35,000 2,757 4,572 2,787 10,487 4,220 8,641 3,033
2023 2024 2025
Water Intake, m 3 129,842 121,344 102,117
Water Discharges, m 3 334,603 327,674 320,918
Total water consumption, m 3 246,344 320,314 327,762
For more detailed information, please visit our website at www.nostrumoilandgas.com.
Energy and resource efficiency policy and
methane emissions management policy
The Company aims to manage energy use as efficiently, economically,
and responsibly as possible. Nostrum is committed to incorporating
energy efficiency considerations into the development of production
operations, process and facility design, and the procurement of goods
and services—whether this relates to optimising existing assets,
evaluating new upstream opportunities, or implementing midstream
tiebacks.
A key focus in 2025 was ensuring the stable and energy-efficient
integration of third-party sour feedstock from Ural O&G into our
processing facilities. Through thorough operational preparation and
the introduction of baseline rules and controls, Nostrum was able to
limit its carbon footprint during the extensive and technically complex
Ural O&G pilot delivery programme. At the Chinarevskoye asset, in
light of ageing equipment and potential integrity degradation, the
Company also prioritised strengthening flow assurance by developing
and implementing a Flow Assurance Process Guideline.
This guideline is intended to maintain uninterrupted hydrocarbon
flow from the reservoir to the point of sale in line with the production
plan, while supporting integrity preservation, product specification
compliance, adherence to HSE requirements, and other flow-
assurance processes.
Based on 2025 approved project list and production forecast:
2021 2022 2023 2024 2025 2026
Projected specific GHG
emissions (Sc1+Sc2)
tCO 2 e per kboe of
production feed-stock
29.5 34.6 47.2 35.2 25.3 30.0
Projected specific Air
emissions t per kboe
of production feed-
stock
0.7 0.9 1.2 0.8 1.08 0.7
Projected specific waste
generation t per kboe
of production feed-
stock
0.5 0.6 0.7 1.0 0.4 0.5
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
AvgWatProd
m 3 /d
10 15 164 393 487 813 723 837 538 568 577 513 476 440 320 241
AvgWatInj
m 3 /d
510 682 962 1,007 766 809 808 1,276 1,348 983 785 842 788 718 249 241
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
52
STRATEGIC REPORT
Renewable energy use
In 2025, in accordance with the Rules of Determination of Rate for
Support of Renewable Energy Resources (RES), Nostrum purchased
2,234 thousand kWh of electricity from environmentally safe RES for
own needs, representing 2.49 % of Nostrum’s total electricity
consumption. The RES are provided by “Settlement and Financial
Center to Support Renewable Energy Sources” LLP.
In 2025, we will continue to take action for developing renewable
energy sources of energy saving and energy efficiency.
Table 1: Volume and % of renewable energy use
Total energy
use, kWh
Renewable
energy use,
kWh
% of renewable
energy use
2019 110,007.715 2,122.070 1.93%
2020 97,611.929 2,064.228 2.11%
2021 93,236.708 2,156.969 2.31%
2022 92,702.024 1,580.212 1.70%
2023 88,440.944 1,014.826 1.15%
2024 96,611.638 1,865.888 1.93%
2025 89,422.526 2,234.833 2.49%
GHG emission results
Kazakhstan signed the Paris Agreement on 2 August 2016 and ratified
it on 4 November 2016. Under the Agreement, each Party has its own
obligations to reduce greenhouse gas emissions. Kazakhstan has set
an ambitious unconditional target to cut GHG emissions by 15% by
2030 compared with the 1990 baseline. In February 2023, Kazakhstan
approved a strategy to achieve carbon neutrality by 2060, which sets
out key measures to reduce emissions and support economy-wide
decarbonisation.
From 2021 onward, quota setting has been fully based on the
benchmarking approach. Under the National GHG Allocation Plan for
2021, emission quotas were determined by multiplying benchmark
values by the average production volumes for 2017 –2019. The same
benchmarking methodology was applied under the National GHG
Allocation Plan for 2022 –2025: carbon credits were calculated by
applying benchmarks to the average production for 2017 –2019.
The following GHG quotas have been allocated to Nostrum under the
National GHG Allocation Plan for 2022 –2025.
As of today, a draft National Plan for 2026 –2030 has been developed,
which provides for an annual reduction of the carbon budget by
3.41%. If production volumes increase, a reserve of carbon quotas is
considered; this reserve is formed by reallocating quotas from
installations that reduce production or cease operations.
CO₂ emission quotas (tCO 2 )
2026 1 2027 2028 2029 2030
200,904 196,031 191,380 186,506 181,855
1 The GHG quota for 2026 was set in 2022 only based on production from Chinarevskoye field
(without Ural O&G processing volumes). In H1 2026, the Company plans to apply for an additional
2026 quota from the free state reserve, which will cover the forecasted GHG emissions for 2026
(while the Group’s KPI is not to exceed 290,209 tons of CO 2 ).
Direct GHG emissions (Scope 1) sources are flares, heaters,
incinerators, boilers, gas turbine plants, electric power stations and
compressors.
Total direct GHG emissions (Scope 1) subdivided by gas types and by
sources are summarised below in Tables 2 and 4. No further
ecological data is available for publication. Consequently, additional
disclosures in relation to materials used, products and services, waste
management, water consumption, energy consumption and energy
efficiency, emergency and intermittent pollution episodes,
wastewater discharges, atmospheric emissions of greenhouse gases
and other pollutants, environmental protection and biodiversity are
not possible.
A breakdown of GHG emissions by gas type is shown in Table 2. The
GHG emissions predominantly consisted of carbon dioxide and
methane. Scope 1 emissions are generated directly by equipment
owned and operated by the Group. The equipment includes boilers,
heaters, diesel stations, gas turbine units and compressors. Scope 1
emissions also include flaring and hydrofluorocarbons emitted by
refrigeration units and climate control systems, such as air
conditioners.
In 2025, the Company expanded its Scope 3 GHG emissions
calculations to include three additional categories, bringing the total
number of disclosed categories to six (See Table 3). These include:
“Waste generated in operations” – 1,196 tons of CO 2 , “Capital goods”
– 301 tons of CO 2 and “Goods and Services” – 834 tons of CO 2 , “Use of
sold products”- 1,132,586 tons of CO 2 , “Down Stream Transportation”
– 447 tons of CO 2 , “Processing of sold products”- 5,529 tons of CO 2 .
Total Scope 3 emissions amounted to 1,140,893 tons of CO 2 .
Table 2: Scope 1 GHG emissions subdivided by gas type (tCO 2 e)
Table 3: Scope 3 GHG emissions subdivided by categories (tCO 2 e)
2017 2018 2019 2020 2021 2022 2023 2024 2025
Carbon dioxide 242,276 244,379 213,520 180,527 180,922 165,995 176,277 222,080 216,401
Methane 10,723 8,436 8,429 6,133 5,614 3,600 3,824 33,964 9,787
Nitrous oxide 1,305 1,304 1,034 917 903 7 11 15 6
Hydrofluorocarbons 28 37 25 28 28 23 23 23 23
Total 254,332 254,156 223,008 187,605 187,467 169,625 180,136 256,082 226,217
2023 2024 2025
Waste generated in operations 289 1,313 1,196
Capital goods 150 184 301
Goods and services 1,430 1,304 834
Use of Sold products 1,132,586
Down Stream Transportation 447
Proccesing of Sold Products 5,529
Total 1,869 2,801 1,140,893
STRATEGIC REPORT
Renewable energy use
In 2025, in accordance with the Rules of Determination of Rate for
Support of Renewable Energy Resources (RES), Nostrum purchased
2,234 thousand kWh of electricity from environmentally safe RES for
own needs, representing 2.49 % of Nostrum’s total electricity
consumption. The RES are provided by “Settlement and Financial
Center to Support Renewable Energy Sources” LLP.
In 2025, we will continue to take action for developing renewable
energy sources of energy saving and energy efficiency.
Table 1: Volume and % of renewable energy use
Total energy
use, kWh
Renewable
energy use,
kWh
% of renewable
energy use
2019 110,007.715 2,122.070 1.93%
2020 97,611.929 2,064.228 2.11%
2021 93,236.708 2,156.969 2.31%
2022 92,702.024 1,580.212 1.70%
2023 88,440.944 1,014.826 1.15%
2024 96,611.638 1,865.888 1.93%
2025 89,422.526 2,234.833 2.49%
GHG emission results
Kazakhstan signed the Paris Agreement on 2 August 2016 and ratified
it on 4 November 2016. Under the Agreement, each Party has its own
obligations to reduce greenhouse gas emissions. Kazakhstan has set
an ambitious unconditional target to cut GHG emissions by 15% by
2030 compared with the 1990 baseline. In February 2023, Kazakhstan
approved a strategy to achieve carbon neutrality by 2060, which sets
out key measures to reduce emissions and support economy-wide
decarbonisation.
From 2021 onward, quota setting has been fully based on the
benchmarking approach. Under the National GHG Allocation Plan for
2021, emission quotas were determined by multiplying benchmark
values by the average production volumes for 2017 –2019. The same
benchmarking methodology was applied under the National GHG
Allocation Plan for 2022 –2025: carbon credits were calculated by
applying benchmarks to the average production for 2017 –2019.
The following GHG quotas have been allocated to Nostrum under the
National GHG Allocation Plan for 2022 –2025.
As of today, a draft National Plan for 2026 –2030 has been developed,
which provides for an annual reduction of the carbon budget by
3.41%. If production volumes increase, a reserve of carbon quotas is
considered; this reserve is formed by reallocating quotas from
installations that reduce production or cease operations.
CO₂ emission quotas (tCO 2 )
2026 1 2027 2028 2029 2030
200,904 196,031 191,380 186,506 181,855
1 The GHG quota for 2026 was set in 2022 only based on production from Chinarevskoye field
(without Ural O&G processing volumes). In H1 2026, the Company plans to apply for an additional
2026 quota from the free state reserve, which will cover the forecasted GHG emissions for 2026
(while the Group’s KPI is not to exceed 290,209 tons of CO 2 ).
Direct GHG emissions (Scope 1) sources are flares, heaters,
incinerators, boilers, gas turbine plants, electric power stations and
compressors.
Total direct GHG emissions (Scope 1) subdivided by gas types and by
sources are summarised below in Tables 2 and 4. No further
ecological data is available for publication. Consequently, additional
disclosures in relation to materials used, products and services, waste
management, water consumption, energy consumption and energy
efficiency, emergency and intermittent pollution episodes,
wastewater discharges, atmospheric emissions of greenhouse gases
and other pollutants, environmental protection and biodiversity are
not possible.
A breakdown of GHG emissions by gas type is shown in Table 2. The
GHG emissions predominantly consisted of carbon dioxide and
methane. Scope 1 emissions are generated directly by equipment
owned and operated by the Group. The equipment includes boilers,
heaters, diesel stations, gas turbine units and compressors. Scope 1
emissions also include flaring and hydrofluorocarbons emitted by
refrigeration units and climate control systems, such as air
conditioners.
In 2025, the Company expanded its Scope 3 GHG emissions
calculations to include three additional categories, bringing the total
number of disclosed categories to six (See Table 3). These include:
“Waste generated in operations” – 1,196 tons of CO 2 , “Capital goods”
– 301 tons of CO 2 and “Goods and Services” – 834 tons of CO 2 , “Use of
sold products”- 1,132,586 tons of CO 2 , “Down Stream Transportation”
– 447 tons of CO 2 , “Processing of sold products”- 5,529 tons of CO 2 .
Total Scope 3 emissions amounted to 1,140,893 tons of CO 2 .
Table 2: Scope 1 GHG emissions subdivided by gas type (tCO 2 e)
Table 3: Scope 3 GHG emissions subdivided by categories (tCO 2 e)
2017 2018 2019 2020 2021 2022 2023 2024 2025
Carbon dioxide 242,276 244,379 213,520 180,527 180,922 165,995 176,277 222,080 216,401
Methane 10,723 8,436 8,429 6,133 5,614 3,600 3,824 33,964 9,787
Nitrous oxide 1,305 1,304 1,034 917 903 7 11 15 6
Hydrofluorocarbons 28 37 25 28 28 23 23 23 23
Total 254,332 254,156 223,008 187,605 187,467 169,625 180,136 256,082 226,217
2023 2024 2025
Waste generated in operations 289 1,313 1,196
Capital goods 150 184 301
Goods and services 1,430 1,304 834
Use of Sold products 1,132,586
Down Stream Transportation 447
Proccesing of Sold Products 5,529
Total 1,869 2,801 1,140,893
ESG REVIEW
53 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Table 4: Scope 1 GHG emissions subdivided by source types (tCO 2 e)
Stationary combustion sources formed the majority of emitted GHGs.
Indirect GHG emissions (Scope 2)
Nostrum does not purchase steam or rely on externally supplied heating or cooling services. The only form of purchased energy that contributes
to indirect GHG emissions is electricity. It is delivered to Nostrum’s facilities via the Zelenovskaya distribution network (ZapKazREK JSC) through its
subsidiary, Batys Energoresursy LLC. The regional emission factor (0.27086 tCO₂/MWh) was established in accordance with the Methodological
Guidelines for Calculating GHG Emissions from Electrical Power Stations and Boilers. The totals for direct and indirect GHG emissions (Scope 1 and
Scope 2), as well as overall GHG emissions, are presented in Table 5.
Table 5: Scope 1, Scope 2 and total GHG emissions (tCO 2 e)
Emissions intensity ratio
Tonnes of CO 2 per tonne of output is a recommended intensity ratio for the oil and gas sector, as per Appendix F of the UK Government’s Defra
Environmental Reporting Guidelines (2013). Taking into account the variety of products of Nostrum – crude oil, stabilised condensate, LPG and
dry gas – the chosen intensity ratio is expressed in metric tonnes of CO 2 e (mtCO 2 e) per tonne of oil equivalent (mmboe).
Table 6 shows intensity ratios for total (Scope 1 and Scope 2) emissions in the period 2017-2025.
Table 6: Emissions intensity ratios for total GHG emissions
2019 2020 2021 2022 2023 2024 2025
Gross emissions of air pollutants into atmosphere 0.0037 0.0035 0.0048 0.0060 0.0082 0.0039 0.0046
2017 2018 2019 2020 2021 2022 2023 2024 2025
Stationary combustion 243,001 245,362 214,536 181,403 181,765 166,284 176,954 237,899 220,680
Mobile combustion 435 105 89 66 86 112 48 41 40
Fugitive sources 10,896 8,536 8,359 6,130 5,616 3,229 3,134 18,141 5,497
Total 254,332 254,003 222,984 187,599 187,467 169,625 180,136 256,082 226,217
2017 2018 2019 2020 2021 2022 2023 2024 2025
Direct energy (Scope 1) 254,332 254,156 223,008 187,599 187,467 169,625 180,136 256,082 226,217
Indirect energy (Scope 2) 640 559 297 68 12 5 21 7 3
Total 254,972 254,715 223,305 187,667 187,479 169,630 180,157 256,089 226,220
2017 2018 2019 2020 2021 2022 2023 2024 2025
Production, tonnes of oil
equivalent (toe)
2,088,917 1,878,026 1,520,928 1,186,383 907,648 703,430 537,740 1,059,7 1,301,9
tCO 2 /toe 0.122 0.136 0.1 0.2 0.2 0.2 0.3 0.2 0.1
Production, mmboe 14.3 12.9 10.0 8.1 6.2 4.8 3.6 7.2 8.9
tCO 2 /mmboe 17,820 19,801 21,434 23,094.8 30,157 35,207 48,913 35,282 25,369
53 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Table 4: Scope 1 GHG emissions subdivided by source types (tCO 2 e)
Stationary combustion sources formed the majority of emitted GHGs.
Indirect GHG emissions (Scope 2)
Nostrum does not purchase steam or rely on externally supplied heating or cooling services. The only form of purchased energy that contributes
to indirect GHG emissions is electricity. It is delivered to Nostrum’s facilities via the Zelenovskaya distribution network (ZapKazREK JSC) through its
subsidiary, Batys Energoresursy LLC. The regional emission factor (0.27086 tCO₂/MWh) was established in accordance with the Methodological
Guidelines for Calculating GHG Emissions from Electrical Power Stations and Boilers. The totals for direct and indirect GHG emissions (Scope 1 and
Scope 2), as well as overall GHG emissions, are presented in Table 5.
Table 5: Scope 1, Scope 2 and total GHG emissions (tCO 2 e)
Emissions intensity ratio
Tonnes of CO 2 per tonne of output is a recommended intensity ratio for the oil and gas sector, as per Appendix F of the UK Government’s Defra
Environmental Reporting Guidelines (2013). Taking into account the variety of products of Nostrum – crude oil, stabilised condensate, LPG and
dry gas – the chosen intensity ratio is expressed in metric tonnes of CO 2 e (mtCO 2 e) per tonne of oil equivalent (mmboe).
Table 6 shows intensity ratios for total (Scope 1 and Scope 2) emissions in the period 2017-2025.
Table 6: Emissions intensity ratios for total GHG emissions
2019 2020 2021 2022 2023 2024 2025
Gross emissions of air pollutants into atmosphere 0.0037 0.0035 0.0048 0.0060 0.0082 0.0039 0.0046
2017 2018 2019 2020 2021 2022 2023 2024 2025
Stationary combustion 243,001 245,362 214,536 181,403 181,765 166,284 176,954 237,899 220,680
Mobile combustion 435 105 89 66 86 112 48 41 40
Fugitive sources 10,896 8,536 8,359 6,130 5,616 3,229 3,134 18,141 5,497
Total 254,332 254,003 222,984 187,599 187,467 169,625 180,136 256,082 226,217
2017 2018 2019 2020 2021 2022 2023 2024 2025
Direct energy (Scope 1) 254,332 254,156 223,008 187,599 187,467 169,625 180,136 256,082 226,217
Indirect energy (Scope 2) 640 559 297 68 12 5 21 7 3
Total 254,972 254,715 223,305 187,667 187,479 169,630 180,157 256,089 226,220
2017 2018 2019 2020 2021 2022 2023 2024 2025
Production, tonnes of oil
equivalent (toe)
2,088,917 1,878,026 1,520,928 1,186,383 907,648 703,430 537,740 1,059,7 1,301,9
tCO 2 /toe 0.122 0.136 0.1 0.2 0.2 0.2 0.3 0.2 0.1
Production, mmboe 14.3 12.9 10.0 8.1 6.2 4.8 3.6 7.2 8.9
tCO 2 /mmboe 17,820 19,801 21,434 23,094.8 30,157 35,207 48,913 35,282 25,369
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
54
STRATEGIC REPORT
Table 7: Global GHG emissions and energy use data
Current reporting year 2025 Comparison reporting year 2024
UK and
offshore 8
Global (excluding UK and
offshore)
UK and
offshore 3
Global (excluding UK and offshore)
Emissions from activities which the
Company owns or controls, including
combustion of fuel & operation of
facilities
(Scope 1) tCO 2 e 9
No data
collection
226,217.31 No data
collection
256,082.85
Emissions from purchase of electricity,
heat, steam and cooling purchased for
own use (Scope 2, location-based)
tCO 2 e
No data
collection
3.1 No data
collection
6.6
Total gross Scope 1 + Scope 2 emissions
tCO2e
No data
collection
226,220.4 No data
collection
256,089.5
Energy consumption used to calculate
Scope 1 emissions: kWh
No data
collection
No data collection No data
collection
No data collection
Energy consumption used to calculate
Scope 2 emissions: kWh
No data
collection
No data collection No data
collection
No data collection
Total energy consumption used to
calculate Scope 1 and Scope 2
emissions: kWh
No data
collection
377,030,939.4 No data
collection
377,043,905.4
Intensity ratio: tCO 2 e (gross Scope 1 +
2)/ mmboe
No data
collection
25,369.1 No data
collection
35,282.7
Methodology No data
collection
Kazakhstan methodical
guidelines. KwH
calculated based on
1.36E+15 J own generated
energy plus purchased
electricity.
No data
collection
Kazakhstan methodical guidelines. KwH
calculated based on 1.36E+15 J own generated
energy plus purchased electricity.
Principal measures taken for the
purpose of increasing the Company’s
energy efficiency.
None None None None
In-process control, monitoring and health protection
The Company’s main priority is to comply with all applicable legal
requirements in the Republic of Kazakhstan related to environmental
protection, workplace conditions at production facilities, and health
and safety. To support this, Nostrum maintains continuous monitoring
and control across a range of relevant areas.
Industrial environmental monitoring (IEM) and control
Industrial Environmental Monitoring (IEM) is carried out in accordance
with the Industrial Environmental Monitoring Programme developed
in line with the requirements of the RoK Environmental Code and
other applicable environmental regulatory and procedural documents
and guidance. The programme covers monitoring of atmospheric
emissions as well as the impact of Nostrum’s operations on
environmental media (e.g., air, water and soil).
Ambient air sampling Industrial emissions measurements
An ambient air quality study was conducted in the villages of Beles,
Sulukol and Chinarevo within the Chinarevskoye Field sanitary
protection zone (hereinafter the “CF”), as well as at Camp-3, the
transfer point at the Terminal, and within the sanitary protection zone
of the Oil Loading Terminal.
Water samples were collected from the Yembulatovka River, the
evaporation ponds at GTU-1/2 and GTU-3, and the Camp-3 sewage
treatment plant. Soil sampling was performed once per year within
the sanitary protection zones of the CF, the Oil Terminal, the transfer
point, and Camp-3.
8 In Belgium, the Netherlands and the UK, the Group rents serviced office space but the owner does not collect the data required to be reported.
9 The period for which this information is prepared is identical to the period in respect of which the Directors’ report is pre pared.
In-process control in canteens
Quarterly inspections are conducted in Nostrum’s canteens. During
these inspections, samples of prepared meals, salads, wash water and
drinking water are collected and submitted for bacteriological and
chemical analysis to verify compliance with applicable sanitary
requirements. In addition, the inspections include checks of lighting
levels, workplace microclimate parameters (e.g., temperature and
humidity), noise levels, and the effective operation of ventilation
systems.
In-process control of labour conditions at production facilities
To identify and address potential workplace non-conformities,
Nostrum conducted a series of evaluations covering key occupational
and environmental parameters. These assessments included
measurements of indoor air quality, lighting levels, microclimate
conditions (temperature, humidity and air movement), noise
exposure, vibration levels, and electromagnetic fields, as well as
inspections related to power station areas and associated equipment.
All monitoring activities and instrumental measurements at Nostrum
facilities were performed by specialised contractor companies that
hold the required permits, accreditation, and certification to carry out
such work. Based on the results of this ongoing (in-process)
monitoring, the Company submits the relevant information and
supporting documentation to the competent authorities. In addition,
the Industrial Environmental Control (IEC) report is prepared and
uploaded to the electronic environmental portal in accordance with
regulatory requirements.
STRATEGIC REPORT
Table 7: Global GHG emissions and energy use data
Current reporting year 2025 Comparison reporting year 2024
UK and
offshore 8
Global (excluding UK and
offshore)
UK and
offshore 3
Global (excluding UK and offshore)
Emissions from activities which the
Company owns or controls, including
combustion of fuel & operation of
facilities
(Scope 1) tCO 2 e 9
No data
collection
226,217.31 No data
collection
256,082.85
Emissions from purchase of electricity,
heat, steam and cooling purchased for
own use (Scope 2, location-based)
tCO 2 e
No data
collection
3.1 No data
collection
6.6
Total gross Scope 1 + Scope 2 emissions
tCO2e
No data
collection
226,220.4 No data
collection
256,089.5
Energy consumption used to calculate
Scope 1 emissions: kWh
No data
collection
No data collection No data
collection
No data collection
Energy consumption used to calculate
Scope 2 emissions: kWh
No data
collection
No data collection No data
collection
No data collection
Total energy consumption used to
calculate Scope 1 and Scope 2
emissions: kWh
No data
collection
377,030,939.4 No data
collection
377,043,905.4
Intensity ratio: tCO 2 e (gross Scope 1 +
2)/ mmboe
No data
collection
25,369.1 No data
collection
35,282.7
Methodology No data
collection
Kazakhstan methodical
guidelines. KwH
calculated based on
1.36E+15 J own generated
energy plus purchased
electricity.
No data
collection
Kazakhstan methodical guidelines. KwH
calculated based on 1.36E+15 J own generated
energy plus purchased electricity.
Principal measures taken for the
purpose of increasing the Company’s
energy efficiency.
None None None None
In-process control, monitoring and health protection
The Company’s main priority is to comply with all applicable legal
requirements in the Republic of Kazakhstan related to environmental
protection, workplace conditions at production facilities, and health
and safety. To support this, Nostrum maintains continuous monitoring
and control across a range of relevant areas.
Industrial environmental monitoring (IEM) and control
Industrial Environmental Monitoring (IEM) is carried out in accordance
with the Industrial Environmental Monitoring Programme developed
in line with the requirements of the RoK Environmental Code and
other applicable environmental regulatory and procedural documents
and guidance. The programme covers monitoring of atmospheric
emissions as well as the impact of Nostrum’s operations on
environmental media (e.g., air, water and soil).
Ambient air sampling Industrial emissions measurements
An ambient air quality study was conducted in the villages of Beles,
Sulukol and Chinarevo within the Chinarevskoye Field sanitary
protection zone (hereinafter the “CF”), as well as at Camp-3, the
transfer point at the Terminal, and within the sanitary protection zone
of the Oil Loading Terminal.
Water samples were collected from the Yembulatovka River, the
evaporation ponds at GTU-1/2 and GTU-3, and the Camp-3 sewage
treatment plant. Soil sampling was performed once per year within
the sanitary protection zones of the CF, the Oil Terminal, the transfer
point, and Camp-3.
8 In Belgium, the Netherlands and the UK, the Group rents serviced office space but the owner does not collect the data required to be reported.
9 The period for which this information is prepared is identical to the period in respect of which the Directors’ report is pre pared.
In-process control in canteens
Quarterly inspections are conducted in Nostrum’s canteens. During
these inspections, samples of prepared meals, salads, wash water and
drinking water are collected and submitted for bacteriological and
chemical analysis to verify compliance with applicable sanitary
requirements. In addition, the inspections include checks of lighting
levels, workplace microclimate parameters (e.g., temperature and
humidity), noise levels, and the effective operation of ventilation
systems.
In-process control of labour conditions at production facilities
To identify and address potential workplace non-conformities,
Nostrum conducted a series of evaluations covering key occupational
and environmental parameters. These assessments included
measurements of indoor air quality, lighting levels, microclimate
conditions (temperature, humidity and air movement), noise
exposure, vibration levels, and electromagnetic fields, as well as
inspections related to power station areas and associated equipment.
All monitoring activities and instrumental measurements at Nostrum
facilities were performed by specialised contractor companies that
hold the required permits, accreditation, and certification to carry out
such work. Based on the results of this ongoing (in-process)
monitoring, the Company submits the relevant information and
supporting documentation to the competent authorities. In addition,
the Industrial Environmental Control (IEC) report is prepared and
uploaded to the electronic environmental portal in accordance with
regulatory requirements.
55
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
Non-financial and Sustainability information statement
This section of the strategic report constitutes the Company’s Non-financial and Sustainability Information Statement, produced to comply with
sections 414CA and 414CB of the Companies Act. The information is incorporated by cross reference.
Reporting requirements Policies and standards which govern our
approach
Information necessary to understand our
business and its impact, policy due diligence
and outcomes
Environmental matters Annual environmental objectives Environmental stewardship, pages 48-54
Liquidation fund contribution in accordance
with the PSA
Communities and social review, page 47
Employees Group Code of Conduct and Human Rights Empowering our people, pages 44-46
Whistleblowing policy Safe operations, pages 37-43
Health and Safety policy Total Recordable Injury Frequency, page 38
Respect for human rights Modern Slavery Statement Empowering our people, pages 44-46
Equality and Diversity Policy
Social matters Sponsorship of community events Communities and social review, page 47
Anti-corruption and anti-bribery Anti-corruption and bribery policy Communities and social review, page 47
Anti-facilitation of tax evasion policy Our Governance Framework, pages 72-74
Payments to governments
Description of principal risks Principal risks and uncertainties, pages 22-26
Description of the business model Business model, page 5
Non-financial key performance indicators Key performance indicators, page 12
Our strategic priorities, page 8
TCFD Recommendation TCFD Recommended Disclosure Where reported
Governance
Disclose the organisation’s
governance around climate related
risks and opportunities
a) Describe the board’s oversight of climate-related risks and opportunities. Pages 56-57
b) Describe management’s role in assessing and managing climate-related risks
and opportunities.
Pages 56-57
Strategy
Disclose the actual and potential
impacts of climate-related risks and
opportunities on the
55uthorizing55’s business,
strategy, and financial planning
where such information is material.
Describe the climate-related risks and opportunities the organisation has
identified over the short, medium, and long term.
Pages 57-60
Describe the impact of climate-related risks and opportunities on the
organisation’s business, strategy, and financial planning.
Pages 57-60
Describe the resilience of the organisation’s strategy, taking into consideration
different climate-related scenarios, including a 2°C or lower scenario.
Pages 58-60
Risk management
Disclose how the organisation
identifies, assesses, and manages
climate-related risks.
Describe the organisation’s processes for identifying and assessing climate-
related risks.
Pages 60-61
Describe the organisation’s processes for managing climate-related risks. Pages 60-61
Describe how processes for identifying, assessing, and managing climate-
related risks are integrated into the organisation’s overall risk management.
Pages 60-61
Metrics and targets
Disclose the metrics and targets
used to assess and manage
relevant climate-related risks and
opportunities where such
information is material.
Disclose the metrics used by the organisation to assess climate-related risks
and opportunities in line with risk management process.
Pages 61-62
Disclose Scope 1, Scope 2 and if appropriate, Scope 3 GHG emissions, and the
related risks.
Page 62
Describe the targets used by the organisation to manage climate-related risks
and opportunities and performance against targets.
Page 62
Describe the KPIs used to assess progress against targets used to manage
climate-related risks and realise climate-related opportunities and the
calculations on which those KPIs are based.
Page 62
Non-financial and Sustainability information statement
This section of the strategic report constitutes the Company’s Non-financial and Sustainability Information Statement, produced to comply with
sections 414CA and 414CB of the Companies Act. The information is incorporated by cross reference.
Reporting requirements Policies and standards which govern our
approach
Information necessary to understand our
business and its impact, policy due diligence
and outcomes
Environmental matters Annual environmental objectives Environmental stewardship, pages 48-54
Liquidation fund contribution in accordance
with the PSA
Communities and social review, page 47
Employees Group Code of Conduct and Human Rights Empowering our people, pages 44-46
Whistleblowing policy Safe operations, pages 37-43
Health and Safety policy Total Recordable Injury Frequency, page 38
Respect for human rights Modern Slavery Statement Empowering our people, pages 44-46
Equality and Diversity Policy
Social matters Sponsorship of community events Communities and social review, page 47
Anti-corruption and anti-bribery Anti-corruption and bribery policy Communities and social review, page 47
Anti-facilitation of tax evasion policy Our Governance Framework, pages 72-74
Payments to governments
Description of principal risks Principal risks and uncertainties, pages 22-26
Description of the business model Business model, page 5
Non-financial key performance indicators Key performance indicators, page 12
Our strategic priorities, page 8
TCFD Recommendation TCFD Recommended Disclosure Where reported
Governance
Disclose the organisation’s
governance around climate related
risks and opportunities
a) Describe the board’s oversight of climate-related risks and opportunities. Pages 56-57
b) Describe management’s role in assessing and managing climate-related risks
and opportunities.
Pages 56-57
Strategy
Disclose the actual and potential
impacts of climate-related risks and
opportunities on the
55uthorizing55’s business,
strategy, and financial planning
where such information is material.
Describe the climate-related risks and opportunities the organisation has
identified over the short, medium, and long term.
Pages 57-60
Describe the impact of climate-related risks and opportunities on the
organisation’s business, strategy, and financial planning.
Pages 57-60
Describe the resilience of the organisation’s strategy, taking into consideration
different climate-related scenarios, including a 2°C or lower scenario.
Pages 58-60
Risk management
Disclose how the organisation
identifies, assesses, and manages
climate-related risks.
Describe the organisation’s processes for identifying and assessing climate-
related risks.
Pages 60-61
Describe the organisation’s processes for managing climate-related risks. Pages 60-61
Describe how processes for identifying, assessing, and managing climate-
related risks are integrated into the organisation’s overall risk management.
Pages 60-61
Metrics and targets
Disclose the metrics and targets
used to assess and manage
relevant climate-related risks and
opportunities where such
information is material.
Disclose the metrics used by the organisation to assess climate-related risks
and opportunities in line with risk management process.
Pages 61-62
Disclose Scope 1, Scope 2 and if appropriate, Scope 3 GHG emissions, and the
related risks.
Page 62
Describe the targets used by the organisation to manage climate-related risks
and opportunities and performance against targets.
Page 62
Describe the KPIs used to assess progress against targets used to manage
climate-related risks and realise climate-related opportunities and the
calculations on which those KPIs are based.
Page 62
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
56
STRATEGIC REPORT
Climate-related Financial Disclosures
We have continued improving our disclosures and reporting to maintain adherence to TCFD
recommendations, reflecting Nostrum’s operations and strategies.
TCFD Statement
Climate change presents significant challenges and opportunities that
impact our business operations, financial performance, and long-
term strategy. We make climate-related financial disclosures in line
with the FCA Listing Rule 14.3.27R and LR 9.8.6(8) ensuring
consistency with the TCFD Recommendations and Recommended
Disclosures as well as and UK.
Climate-Related Financial Disclosures (CFD) for the financial year
ending 31 December 2025. This report is structured around the four
core elements of the TCFD framework: Governance, Strategy, Risk
Management, and Metrics and Targets. These core elements are
complemented by the 11 supporting recommended disclosures,
which provide detailed guidance on how to comprehensively disclose
climate-related risks and opportunities.
We acknowledge that the landscape of climate-related risks and
opportunities is continually evolving. As such, we are dedicated to
regularly updating our assessments and strategies to ensure resilience
and adaptability in a changing environment. This initiative aims to
enhance our transparency and provide stakeholders with clear insights
into how we manage climate-related risks and opportunities, while
continuing to respond to their guidance.
When making assessments and preparing disclosures we have
considered whether particular issues and related information may
influence the economic decisions of the stakeholders. Such approach
is in line with guidance and recommendations provided by TCFD in
relation to materiality of information. Furthermore, the risk
assessment process and its potential financial impact involved use
judgements and estimates, which are consistent with the TCFD
Recommendations and Recommended Disclosures. This report
reflects our current understanding and ongoing efforts to integrate
climate considerations into our corporate decision-making processes.
Governance
TCFD recommendation:
Disclose the organisation’s governance around climate
related risks and opportunities.
Read more about our strategy on page 8
a) Describe the board’s oversight of climate-related risks and
opportunities.
b) Describe management’s role in assessing and managing climate-
related risks and opportunities.
Board of Directors
The Board of Directors retains ultimate responsibility for overseeing
climate-related risks and opportunities within its governance
framework, ensuring their integration into strategic and operational
decision-making to align with the Company’s long-term objectives.
Through internal control and risk management, including regular
reports, periodic reviews, and an annual assessment, the Board
systematically identifies, manages, and discloses climate-related risks,
embedding climate considerations into strategy, risk management,
and stakeholder engagement to reinforce its commitment to long-
term resilience and sustainable value creation.
Key elements of the Board’s oversight include:
Strategic alignment
The Board approves the Group’s strategic aims, objectives, and
commercial strategy, budgets, and business plans which incorporate
climate-related considerations such as transitioning to cleaner energy
business practices.
Policy approval
The Board retains responsibility for approving policies that underpin
the Company’s commitment to sustainability, environmental
stewardship, and broader ESG (Environmental, Social, and
Governance) principles.
Risk management
The Board oversees the internal control and risk management
framework, which includes identifying, assessing, and mitigating
climate-related risks. Further details on the identified risks and related
responses are disclosed within “Principal risks and uncertainties”
section on pages 22-26.
Reporting and accountability
The Board approves the annual report and accounts, which include
disclosures on climate-related risks, opportunities, and performance
metrics aligned with TCFD recommendations.
Progress against climate goals (e.g., emissions reductions,
sustainability targets) is monitored through Board reviews of
operational performance. See page 12 for Company key financial and
non-financial indicators and pages 84 and 87, where CEO KPIs include
GHG emissions-related targets.
Stakeholder engagement
The Board ensures a satisfactory dialogue with all the stakeholders,
including transparency in communications about the Company’s
sustainability commitments.
Audit Committee
The Audit Committee ensures comprehensive oversight of
Environmental, Social, and Governance (ESG) risks, with a particular
focus on climate-related financial disclosures, regulatory compliance,
and risk management. Its key responsibilities in this area include:
Financial reporting
The Committee reviews the Company’s climate-related disclosures in
the annual report, ensuring alignment with the Task Force on Climate-
related Financial Disclosures (TCFD) recommendations and
monitoring emerging climate-related risks. Additionally, the
Committee tracks performance against defined ESG KPIs, ensuring
transparency and accuracy in climate-related financial reporting, and
seek independent assurance on behalf of the Board where
appropriate.
Internal controls and risk management systems
The Committee oversees management’s process for identifying and
managing ESG and climate-related risks, ensuring that internal
controls effectively support the accuracy, completeness, and integrity
of ESG-related information.
STRATEGIC REPORT
Climate-related Financial Disclosures
We have continued improving our disclosures and reporting to maintain adherence to TCFD
recommendations, reflecting Nostrum’s operations and strategies.
TCFD Statement
Climate change presents significant challenges and opportunities that
impact our business operations, financial performance, and long-
term strategy. We make climate-related financial disclosures in line
with the FCA Listing Rule 14.3.27R and LR 9.8.6(8) ensuring
consistency with the TCFD Recommendations and Recommended
Disclosures as well as and UK.
Climate-Related Financial Disclosures (CFD) for the financial year
ending 31 December 2025. This report is structured around the four
core elements of the TCFD framework: Governance, Strategy, Risk
Management, and Metrics and Targets. These core elements are
complemented by the 11 supporting recommended disclosures,
which provide detailed guidance on how to comprehensively disclose
climate-related risks and opportunities.
We acknowledge that the landscape of climate-related risks and
opportunities is continually evolving. As such, we are dedicated to
regularly updating our assessments and strategies to ensure resilience
and adaptability in a changing environment. This initiative aims to
enhance our transparency and provide stakeholders with clear insights
into how we manage climate-related risks and opportunities, while
continuing to respond to their guidance.
When making assessments and preparing disclosures we have
considered whether particular issues and related information may
influence the economic decisions of the stakeholders. Such approach
is in line with guidance and recommendations provided by TCFD in
relation to materiality of information. Furthermore, the risk
assessment process and its potential financial impact involved use
judgements and estimates, which are consistent with the TCFD
Recommendations and Recommended Disclosures. This report
reflects our current understanding and ongoing efforts to integrate
climate considerations into our corporate decision-making processes.
Governance
TCFD recommendation:
Disclose the organisation’s governance around climate
related risks and opportunities.
Read more about our strategy on page 8
a) Describe the board’s oversight of climate-related risks and
opportunities.
b) Describe management’s role in assessing and managing climate-
related risks and opportunities.
Board of Directors
The Board of Directors retains ultimate responsibility for overseeing
climate-related risks and opportunities within its governance
framework, ensuring their integration into strategic and operational
decision-making to align with the Company’s long-term objectives.
Through internal control and risk management, including regular
reports, periodic reviews, and an annual assessment, the Board
systematically identifies, manages, and discloses climate-related risks,
embedding climate considerations into strategy, risk management,
and stakeholder engagement to reinforce its commitment to long-
term resilience and sustainable value creation.
Key elements of the Board’s oversight include:
Strategic alignment
The Board approves the Group’s strategic aims, objectives, and
commercial strategy, budgets, and business plans which incorporate
climate-related considerations such as transitioning to cleaner energy
business practices.
Policy approval
The Board retains responsibility for approving policies that underpin
the Company’s commitment to sustainability, environmental
stewardship, and broader ESG (Environmental, Social, and
Governance) principles.
Risk management
The Board oversees the internal control and risk management
framework, which includes identifying, assessing, and mitigating
climate-related risks. Further details on the identified risks and related
responses are disclosed within “Principal risks and uncertainties”
section on pages 22-26.
Reporting and accountability
The Board approves the annual report and accounts, which include
disclosures on climate-related risks, opportunities, and performance
metrics aligned with TCFD recommendations.
Progress against climate goals (e.g., emissions reductions,
sustainability targets) is monitored through Board reviews of
operational performance. See page 12 for Company key financial and
non-financial indicators and pages 84 and 87, where CEO KPIs include
GHG emissions-related targets.
Stakeholder engagement
The Board ensures a satisfactory dialogue with all the stakeholders,
including transparency in communications about the Company’s
sustainability commitments.
Audit Committee
The Audit Committee ensures comprehensive oversight of
Environmental, Social, and Governance (ESG) risks, with a particular
focus on climate-related financial disclosures, regulatory compliance,
and risk management. Its key responsibilities in this area include:
Financial reporting
The Committee reviews the Company’s climate-related disclosures in
the annual report, ensuring alignment with the Task Force on Climate-
related Financial Disclosures (TCFD) recommendations and
monitoring emerging climate-related risks. Additionally, the
Committee tracks performance against defined ESG KPIs, ensuring
transparency and accuracy in climate-related financial reporting, and
seek independent assurance on behalf of the Board where
appropriate.
Internal controls and risk management systems
The Committee oversees management’s process for identifying and
managing ESG and climate-related risks, ensuring that internal
controls effectively support the accuracy, completeness, and integrity
of ESG-related information.
Climate-related Financial Disclosures
57 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Compliance
The Committee monitors compliance with ESG and climate-related
legal and regulatory requirements, ensuring alignment with FCA
Listing Rules, UK Corporate Governance Code.
Read more on pages 75-79
Strategy Committee
The Strategy Committee is responsible for advising the Board on
short-term, medium-term and long-term strategic decisions of the
Company (horizons defined on page 59), including following activities
relevant for addressing climate-related risk and other ESG matters:
• Supporting the Board and Senior Management in formulating the
overall strategy for the Company, with particular emphasis on horizon
scanning, priorities, activities and outcomes.
• Considering reports on overall performance in respect of the
achievement of the objectives and outcomes contained within the
Corporate Strategy.
• Reviewing determined KPIs to assess performance with respect to the
Group’s strategy.
Read more on page 69
Remuneration Committee
Annual KPIs relating to climate change and emissions targets are
reviewed and approved by the Remuneration Committee and upon
its recommendation approved by the Board. The progress against
those KPIs monitored and reported to the Remuneration Committee
and the Board. See page 84 for more details.
Read more on pages 82-93
HSE Department
Though there was no formal ESG or pre-Board HSE Committee in
place during the reporting period, ESG oversight was embedded
within day-to-day management processes, with Health, Safety and
Environmental (HSE) matters remaining a core operational priority.
HSE matters are overseen by the Senior Management Team with
close attention to operational performance, incidents, environmental
impact and risk management across all functions. This approach
ensures that HSE and broader ESG considerations, including climate-
related risks and opportunities, are integrated into operational
decision-making and business planning.
The Group Head of HSE leads the coordination of HSE activities across
the business and operates under the direct oversight of the CEO.
Regular updates on HSE and sustainability matters are provided to
senior management and the Board as appropriate. The CEO is
accountable for ensuring that HSE and sustainability priorities are
effectively implemented and that the Board is kept informed of key
developments, risks and performance.
The Group Head of HSE, alongside business function leaders, assess
and update climate-related and broader sustainability risks and
opportunities, integrating them into the Company’s strategic planning
and decision-making processes. They oversee the development and
implementation of ESG, HSE, and climate strategies, propose new
initiatives, and collaborate with business units to drive execution.
Additionally, these leaders monitor ESG, HSE, and climate-related
performance, ensuring compliance with regulatory requirements,
global reporting frameworks, and stakeholder expectations. They also
lead engagement efforts with internal and external stakeholders,
reinforcing transparency and accountability.
Strategy
TCFD recommendation:
Disclose the actual and potential impacts of climate- related
risks and opportunities on the organisation’s businesses,
strategy, and financial planning where such information is
material.
Read more about our strategy on page 8
a) Describe the climate-related risks and opportunities the
organisation has identified over the short, medium, and long
term.
The Company’s principal risks and uncertainties are outlined in the
risk management process on pages 20-21. Within this framework, key
climate-related risks, along with relevant opportunities, have been
identified for Nostrum. As there have been no significant changes in
the Company’s principal risks and uncertainties, the climate-related
risks have also remained largely consistent with the previous
reporting period.
Transition risks
Policy and Legal (short, medium and long term)
Kazakhstan’s commitment to carbon neutrality by 2060 has driven the
strengthening of emissions regulations, which may impact the
Company’s operations and financial performance. Strategic measures
such as enhancing the Emissions Trading System (ETS), introducing
carbon taxation, and reinforcing climate governance are expected to
increase compliance obligations. The evolving environmental
legislation, including stricter permitting requirements and heightened
regulatory oversight, could escalate operational costs and introduce
risks such as delays or denials in obtaining environmental permits
from Kazakh authorities, critical to maintaining or expanding
operations.
The oil and gas industry, a significant contributor to global GHG
emissions, remains exposed to carbon pricing risks, regulatory
scrutiny, and rising compliance costs. Global efforts under the COP21
agreement to accelerate decarbonization, coupled with national
policies to reduce fossil fuel dependency, may intensify pressure on
the sector.
Beyond regulatory and permitting risks, Nostrum’s operations carry
inherent environmental liabilities, including potential gas leaks, oil
spills, and emissions from flaring, venting, and processing. Such
incidents could result in fines, cleanup costs, litigation, community
opposition, operational disruptions, and reputational harm. Failure to
secure necessary environmental permits, address compliance gaps, or
proactively adapt to regulatory and market shifts could lead to
financial penalties, operational constraints, and diminished
competitiveness in an energy sector transitioning toward
sustainability.
Technology (medium and long term)
Nostrum faces technology transition risks as it moves towards lower-
emission operations. High capital expenditures for R&D, the adoption
of alternative technologies, and the deployment of new processes
could strain financial resources, especially if advancements do not
deliver expected efficiencies.
Additionally, the risk of stranded assets looms large, as existing fossil
fuel infrastructure may become obsolete due to evolving regulations
and cleaner energy alternatives.
Failure to integrate energy-efficient improvements or cybersecurity
protections in digital transformation efforts could also expose the
company to regulatory penalties and operational disruptions.
57 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Compliance
The Committee monitors compliance with ESG and climate-related
legal and regulatory requirements, ensuring alignment with FCA
Listing Rules, UK Corporate Governance Code.
Read more on pages 75-79
Strategy Committee
The Strategy Committee is responsible for advising the Board on
short-term, medium-term and long-term strategic decisions of the
Company (horizons defined on page 59), including following activities
relevant for addressing climate-related risk and other ESG matters:
• Supporting the Board and Senior Management in formulating the
overall strategy for the Company, with particular emphasis on horizon
scanning, priorities, activities and outcomes.
• Considering reports on overall performance in respect of the
achievement of the objectives and outcomes contained within the
Corporate Strategy.
• Reviewing determined KPIs to assess performance with respect to the
Group’s strategy.
Read more on page 69
Remuneration Committee
Annual KPIs relating to climate change and emissions targets are
reviewed and approved by the Remuneration Committee and upon
its recommendation approved by the Board. The progress against
those KPIs monitored and reported to the Remuneration Committee
and the Board. See page 84 for more details.
Read more on pages 82-93
HSE Department
Though there was no formal ESG or pre-Board HSE Committee in
place during the reporting period, ESG oversight was embedded
within day-to-day management processes, with Health, Safety and
Environmental (HSE) matters remaining a core operational priority.
HSE matters are overseen by the Senior Management Team with
close attention to operational performance, incidents, environmental
impact and risk management across all functions. This approach
ensures that HSE and broader ESG considerations, including climate-
related risks and opportunities, are integrated into operational
decision-making and business planning.
The Group Head of HSE leads the coordination of HSE activities across
the business and operates under the direct oversight of the CEO.
Regular updates on HSE and sustainability matters are provided to
senior management and the Board as appropriate. The CEO is
accountable for ensuring that HSE and sustainability priorities are
effectively implemented and that the Board is kept informed of key
developments, risks and performance.
The Group Head of HSE, alongside business function leaders, assess
and update climate-related and broader sustainability risks and
opportunities, integrating them into the Company’s strategic planning
and decision-making processes. They oversee the development and
implementation of ESG, HSE, and climate strategies, propose new
initiatives, and collaborate with business units to drive execution.
Additionally, these leaders monitor ESG, HSE, and climate-related
performance, ensuring compliance with regulatory requirements,
global reporting frameworks, and stakeholder expectations. They also
lead engagement efforts with internal and external stakeholders,
reinforcing transparency and accountability.
Strategy
TCFD recommendation:
Disclose the actual and potential impacts of climate- related
risks and opportunities on the organisation’s businesses,
strategy, and financial planning where such information is
material.
Read more about our strategy on page 8
a) Describe the climate-related risks and opportunities the
organisation has identified over the short, medium, and long
term.
The Company’s principal risks and uncertainties are outlined in the
risk management process on pages 20-21. Within this framework, key
climate-related risks, along with relevant opportunities, have been
identified for Nostrum. As there have been no significant changes in
the Company’s principal risks and uncertainties, the climate-related
risks have also remained largely consistent with the previous
reporting period.
Transition risks
Policy and Legal (short, medium and long term)
Kazakhstan’s commitment to carbon neutrality by 2060 has driven the
strengthening of emissions regulations, which may impact the
Company’s operations and financial performance. Strategic measures
such as enhancing the Emissions Trading System (ETS), introducing
carbon taxation, and reinforcing climate governance are expected to
increase compliance obligations. The evolving environmental
legislation, including stricter permitting requirements and heightened
regulatory oversight, could escalate operational costs and introduce
risks such as delays or denials in obtaining environmental permits
from Kazakh authorities, critical to maintaining or expanding
operations.
The oil and gas industry, a significant contributor to global GHG
emissions, remains exposed to carbon pricing risks, regulatory
scrutiny, and rising compliance costs. Global efforts under the COP21
agreement to accelerate decarbonization, coupled with national
policies to reduce fossil fuel dependency, may intensify pressure on
the sector.
Beyond regulatory and permitting risks, Nostrum’s operations carry
inherent environmental liabilities, including potential gas leaks, oil
spills, and emissions from flaring, venting, and processing. Such
incidents could result in fines, cleanup costs, litigation, community
opposition, operational disruptions, and reputational harm. Failure to
secure necessary environmental permits, address compliance gaps, or
proactively adapt to regulatory and market shifts could lead to
financial penalties, operational constraints, and diminished
competitiveness in an energy sector transitioning toward
sustainability.
Technology (medium and long term)
Nostrum faces technology transition risks as it moves towards lower-
emission operations. High capital expenditures for R&D, the adoption
of alternative technologies, and the deployment of new processes
could strain financial resources, especially if advancements do not
deliver expected efficiencies.
Additionally, the risk of stranded assets looms large, as existing fossil
fuel infrastructure may become obsolete due to evolving regulations
and cleaner energy alternatives.
Failure to integrate energy-efficient improvements or cybersecurity
protections in digital transformation efforts could also expose the
company to regulatory penalties and operational disruptions.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
58
STRATEGIC REPORT
Market (short and medium term)
Includes risk of shifting consumer preferences as growing climate
concerns drive demand away from fossil fuels toward alternative
energy sources, potentially impacting sales and margins.
Additionally, the company may encounter difficulties in securing
financing, as ESG factors and evolving market perceptions could lower
its rating and restrict access to capital.
The energy transition has also intensified competition, with new
entrants and established players pivoting towards low-carbon
solutions, increasing pressure on Nostrum to adapt its market
positioning.
Reputation (medium and long term)
Nostrum recognises the increasing reputational challenges associated
with the energy transition and the evolving expectations of
stakeholders. The oil and gas sector faces growing stigmatization, as
public and investor sentiment shifts toward sustainable energy
solutions.
Negative perceptions of fossil fuel activities may impact the
company’s ability to attract investment, secure financing, and
maintain strong stakeholder relationships.
Additionally, there is a risk of failure to fulfill commitments related to
sustainability targets, emissions reductions, or reporting transparency.
Any perceived shortcomings in meeting climate-related goals or
misalignment with industry best practices could result in reputational
damage, regulatory scrutiny, and loss of investor confidence.
Companies that do not present a credible transition strategy may face
divestment pressure, litigation risks, and competitive disadvantages,
ultimately affecting long-term shareholder value and market
positioning.
Physical risks
Acute physical (short and medium term)
The physical risks that may affect Nostrum include flood events
caused by overflowing riverbanks, which could disrupt LPG
transportation and reduce revenues.
Additionally, sudden extreme temperature changes due to climate
change could impact equipment productivity, increase fire hazards,
and cause thermal expansion or contraction in pipelines and critical
systems, leading to operational inefficiencies.
Chronic physical (medium and long term)
Long-term climate risks that may impact the company include severe
rainfall and snow conditions, which could become more frequent and
pose logistical and infrastructure challenges. While Kazakhstan’s
continental climate has historically exhibited gradual temperature
shifts, future climate change could result in more extreme
fluctuations, placing additional stress on equipment and facilities.
Furthermore, higher summer temperatures could reduce operational
efficiency, increase cooling costs, and create additional risks for
personnel and assets.
Opportunities
The energy transition presents several opportunities for Nostrum to
enhance efficiency, reduce emissions, and maintain competitiveness
in a changing regulatory and market environment. Investing in energy
efficiency measures will help ensure compliance with evolving
legislation, reduce operational costs, and prevent potential overage
charges. Optimising resource usage will also enhance long-term
sustainability and financial resilience.
Implementing advanced emissions monitoring systems will improve
tracking, strengthen regulatory reporting, and help prevent
unintended environmental releases, supporting both compliance and
reputation management. Shifting toward greater gas usage and
reducing reliance on oil aligns with global decarbonisation efforts and
positions the company for long-term sustainability. Investing in new
technologies can drive operational efficiency, reduce environmental
impact, and enhance Nostrum’s ability to adapt to a low-carbon
economy. By capitalising on these opportunities, Nostrum Oil & Gas
can strengthen its market position, improve regulatory compliance,
and contribute to the broader energy transition.
Board of Directors of Nostrum Oil & Gas
Strategy Committee Remuneration
Committee Audit Committee Nomination &
Governance
Committee
HSE Department
Functional leaders &
staff
Chief Executive Officer
Senior Management
STRATEGIC REPORT
Market (short and medium term)
Includes risk of shifting consumer preferences as growing climate
concerns drive demand away from fossil fuels toward alternative
energy sources, potentially impacting sales and margins.
Additionally, the company may encounter difficulties in securing
financing, as ESG factors and evolving market perceptions could lower
its rating and restrict access to capital.
The energy transition has also intensified competition, with new
entrants and established players pivoting towards low-carbon
solutions, increasing pressure on Nostrum to adapt its market
positioning.
Reputation (medium and long term)
Nostrum recognises the increasing reputational challenges associated
with the energy transition and the evolving expectations of
stakeholders. The oil and gas sector faces growing stigmatization, as
public and investor sentiment shifts toward sustainable energy
solutions.
Negative perceptions of fossil fuel activities may impact the
company’s ability to attract investment, secure financing, and
maintain strong stakeholder relationships.
Additionally, there is a risk of failure to fulfill commitments related to
sustainability targets, emissions reductions, or reporting transparency.
Any perceived shortcomings in meeting climate-related goals or
misalignment with industry best practices could result in reputational
damage, regulatory scrutiny, and loss of investor confidence.
Companies that do not present a credible transition strategy may face
divestment pressure, litigation risks, and competitive disadvantages,
ultimately affecting long-term shareholder value and market
positioning.
Physical risks
Acute physical (short and medium term)
The physical risks that may affect Nostrum include flood events
caused by overflowing riverbanks, which could disrupt LPG
transportation and reduce revenues.
Additionally, sudden extreme temperature changes due to climate
change could impact equipment productivity, increase fire hazards,
and cause thermal expansion or contraction in pipelines and critical
systems, leading to operational inefficiencies.
Chronic physical (medium and long term)
Long-term climate risks that may impact the company include severe
rainfall and snow conditions, which could become more frequent and
pose logistical and infrastructure challenges. While Kazakhstan’s
continental climate has historically exhibited gradual temperature
shifts, future climate change could result in more extreme
fluctuations, placing additional stress on equipment and facilities.
Furthermore, higher summer temperatures could reduce operational
efficiency, increase cooling costs, and create additional risks for
personnel and assets.
Opportunities
The energy transition presents several opportunities for Nostrum to
enhance efficiency, reduce emissions, and maintain competitiveness
in a changing regulatory and market environment. Investing in energy
efficiency measures will help ensure compliance with evolving
legislation, reduce operational costs, and prevent potential overage
charges. Optimising resource usage will also enhance long-term
sustainability and financial resilience.
Implementing advanced emissions monitoring systems will improve
tracking, strengthen regulatory reporting, and help prevent
unintended environmental releases, supporting both compliance and
reputation management. Shifting toward greater gas usage and
reducing reliance on oil aligns with global decarbonisation efforts and
positions the company for long-term sustainability. Investing in new
technologies can drive operational efficiency, reduce environmental
impact, and enhance Nostrum’s ability to adapt to a low-carbon
economy. By capitalising on these opportunities, Nostrum Oil & Gas
can strengthen its market position, improve regulatory compliance,
and contribute to the broader energy transition.
Board of Directors of Nostrum Oil & Gas
Strategy Committee Remuneration
Committee Audit Committee Nomination &
Governance
Committee
HSE Department
Functional leaders &
staff
Chief Executive Officer
Senior Management
Climate-related Financial Disclosures
59 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
The Board and Senior Management continuously monitor planning
and decision-making processes over short-term, medium-term and
long-term horizons, which also cover relevant climate-related risks
and opportunities as described below.
Short term: three-year period to the end of H1 2029 over which the
management and the Board monitor the Company’s liquidity and
viability. The Company has a detailed financial plan which is actively
managed and adapted according to changes in external
circumstances.
The climate-related risks are deemed to affect the Company in the
short-term but are not as prevalent as they would be in the medium
and long term.
Medium term: five-year period to 2031, which covers the full term of
the PSA and used in relevant valuation models. Climate-related risks
are factored into these models, and scenario analysis are performed
using various hydrocarbon prices and off-take demand scenarios to
support the Board in decision-making for field investment proposals in
line with the Group’s strategy.
Long term: period covering beyond 2031. This is defined by
opportunities identified in line with the Group’s strategic initiatives,
which are mostly affected by climate-related risks. These include risks
associated with access to financial and capital markets as well as the
ability obtain insurance, which may leave the Company exposed to
extreme negative events. These other risks are further described
below.
b) Describe the impact of climate-related risks and opportunities on
the organisation’s businesses, strategy, and financial planning.
We recognise that the transition to a lower-carbon economy presents
both risks and opportunities for Nostrum. In the short term, our
strategy and financial planning remain flexible, allowing us to adapt as
risks evolve. For medium- and long-term planning, we remain aware
of climate-related risks and their potential impact on project
execution. To ensure resilience in our strategic planning, we
incorporate stressed hydrocarbon price scenarios and energy demand
projections into our decision-making processes. With respect to
physical risks, we have factored these into our strategic planning to
account for potential operational disruptions and revenue losses. To
enhance resilience, we have integrated infrastructure reinforcement
and adaptive planning into our operations, ensuring assets are better
equipped to withstand extreme weather conditions.
Additionally, we have developed emergency response protocols and
contingency measures to minimise the impact of climate-related
events on production, safeguarding both operational stability and
financial performance. Our risk management processes include
infrastructure improvements and operational adjustments, allowing
us to adapt proactively to evolving climate risks.
We have also embedded climate resilience into operational
procedures, ensuring that key facilities are reinforced and critical
functions can continue with minimal disruption. These measures
collectively ensure that the Company remains agile and well-prepared
to navigate the challenges posed by climate-related physical risks. We
consider all transition risks – policy and legal, technological, market,
and reputational to be material to our strategic and financial planning.
These risks impact multiple aspects of our business, including
revenue, expenditures, and assets, as outlined below.
Revenue – changing market demand for our products due to climate-
related risks and opportunities, including shifts in customer
preferences, may lead to reduced demand and lower pricing,
ultimately impacting future revenues.
Operating expenditures – increased costs associated with climate-
related risk mitigation and adaptation, including regulatory
compliance, rising supply/ material costs as suppliers shift away from
servicing the oil and gas industry, and operational downtime due to
extreme weather events. Additional expenditures are also expected
for improving energy and water conservation efficiency.
Research & development – higher investment in climate-related
research & development to develop and integrate new technologies
aimed at reducing emissions and improving operational efficiency.
Capital expenditures – increased investment in equipment and new
technologies to manage transition risks, improve adaptation
capabilities, and enhance conservation and efficiency efforts.
Additional capital spending may be required for physical risk
mitigation, including facility reinforcement and increasing asset
resilience to climate impacts.
We apply equal weighting to all transition risks in our business
strategy and financial planning. While physical risks remain important
from a governance perspective, we assign them slightly lower
financial weighting, as we currently operate successfully in extreme
weather conditions and expect to continue doing so.
We take a conservative approach in our forward planning and do not
factor in potential opportunities that may arise in the short, medium,
or long term due to climate change.
We have strengthened our climate governance framework by
allocating additional resources to risk assessment and reporting. This
framework evaluates climate-related risks and opportunities across
different time horizons and determines their direct financial impact,
ensuring that they are embedded into our strategic and financial
planning. In addition, we continue reporting under CDP, providing an
accurate and transparent assessment of our environmental impact
and progress. This demonstrates our commitment to climate action
and communicates our achievements to customers, investors, and
other stakeholders. By doing so, we not only enhance our reputation
but also identify areas for improvement in our environmental
strategy, allowing us to reduce climate risks and further align with
sustainability goals.
c) Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°C
or lower scenario
Nostrum’s strategy is designed with flexibility to adapt to evolving
conditions, ensuring resilience in a dynamic energy landscape. The
current context has led to increased focus on energy security,
industrial competitiveness, and a fair transition. In response, Nostrum
establishes its strategic foundations and assumptions — including
price projections, demand forecasts, and regulatory frameworks —
based on references such as analyst and institutional consensus,
country-specific regulations, and our own vision of the energy
transition. These assumptions remain consistent with those used in
other Group-wide projections, reinforcing alignment across our
business planning.
For this year’s climate risk analysis and reporting, we examined
various scenarios proposed by international organisations and
agencies. We based our assessment primarily on the Net Zero
Emissions by 2050 Scenario (NZE Scenario) developed by the
International Energy Agency (IEA), the scenario was originally
published in 2021, with an update issued in October 2022, and
incorporated Kazakhstan’s Strategy on Achieving Carbon Neutrality by
2060, which aligns with the country’s commitments under the Paris
Agreement.
Our approach remains consistent with previous years, as we continue
to utilise the same climate scenarios and analytical methods annually,
making adjustments only for significant changes in external factors or
internal operations.
59 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
The Board and Senior Management continuously monitor planning
and decision-making processes over short-term, medium-term and
long-term horizons, which also cover relevant climate-related risks
and opportunities as described below.
Short term: three-year period to the end of H1 2029 over which the
management and the Board monitor the Company’s liquidity and
viability. The Company has a detailed financial plan which is actively
managed and adapted according to changes in external
circumstances.
The climate-related risks are deemed to affect the Company in the
short-term but are not as prevalent as they would be in the medium
and long term.
Medium term: five-year period to 2031, which covers the full term of
the PSA and used in relevant valuation models. Climate-related risks
are factored into these models, and scenario analysis are performed
using various hydrocarbon prices and off-take demand scenarios to
support the Board in decision-making for field investment proposals in
line with the Group’s strategy.
Long term: period covering beyond 2031. This is defined by
opportunities identified in line with the Group’s strategic initiatives,
which are mostly affected by climate-related risks. These include risks
associated with access to financial and capital markets as well as the
ability obtain insurance, which may leave the Company exposed to
extreme negative events. These other risks are further described
below.
b) Describe the impact of climate-related risks and opportunities on
the organisation’s businesses, strategy, and financial planning.
We recognise that the transition to a lower-carbon economy presents
both risks and opportunities for Nostrum. In the short term, our
strategy and financial planning remain flexible, allowing us to adapt as
risks evolve. For medium- and long-term planning, we remain aware
of climate-related risks and their potential impact on project
execution. To ensure resilience in our strategic planning, we
incorporate stressed hydrocarbon price scenarios and energy demand
projections into our decision-making processes. With respect to
physical risks, we have factored these into our strategic planning to
account for potential operational disruptions and revenue losses. To
enhance resilience, we have integrated infrastructure reinforcement
and adaptive planning into our operations, ensuring assets are better
equipped to withstand extreme weather conditions.
Additionally, we have developed emergency response protocols and
contingency measures to minimise the impact of climate-related
events on production, safeguarding both operational stability and
financial performance. Our risk management processes include
infrastructure improvements and operational adjustments, allowing
us to adapt proactively to evolving climate risks.
We have also embedded climate resilience into operational
procedures, ensuring that key facilities are reinforced and critical
functions can continue with minimal disruption. These measures
collectively ensure that the Company remains agile and well-prepared
to navigate the challenges posed by climate-related physical risks. We
consider all transition risks – policy and legal, technological, market,
and reputational to be material to our strategic and financial planning.
These risks impact multiple aspects of our business, including
revenue, expenditures, and assets, as outlined below.
Revenue – changing market demand for our products due to climate-
related risks and opportunities, including shifts in customer
preferences, may lead to reduced demand and lower pricing,
ultimately impacting future revenues.
Operating expenditures – increased costs associated with climate-
related risk mitigation and adaptation, including regulatory
compliance, rising supply/ material costs as suppliers shift away from
servicing the oil and gas industry, and operational downtime due to
extreme weather events. Additional expenditures are also expected
for improving energy and water conservation efficiency.
Research & development – higher investment in climate-related
research & development to develop and integrate new technologies
aimed at reducing emissions and improving operational efficiency.
Capital expenditures – increased investment in equipment and new
technologies to manage transition risks, improve adaptation
capabilities, and enhance conservation and efficiency efforts.
Additional capital spending may be required for physical risk
mitigation, including facility reinforcement and increasing asset
resilience to climate impacts.
We apply equal weighting to all transition risks in our business
strategy and financial planning. While physical risks remain important
from a governance perspective, we assign them slightly lower
financial weighting, as we currently operate successfully in extreme
weather conditions and expect to continue doing so.
We take a conservative approach in our forward planning and do not
factor in potential opportunities that may arise in the short, medium,
or long term due to climate change.
We have strengthened our climate governance framework by
allocating additional resources to risk assessment and reporting. This
framework evaluates climate-related risks and opportunities across
different time horizons and determines their direct financial impact,
ensuring that they are embedded into our strategic and financial
planning. In addition, we continue reporting under CDP, providing an
accurate and transparent assessment of our environmental impact
and progress. This demonstrates our commitment to climate action
and communicates our achievements to customers, investors, and
other stakeholders. By doing so, we not only enhance our reputation
but also identify areas for improvement in our environmental
strategy, allowing us to reduce climate risks and further align with
sustainability goals.
c) Describe the resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°C
or lower scenario
Nostrum’s strategy is designed with flexibility to adapt to evolving
conditions, ensuring resilience in a dynamic energy landscape. The
current context has led to increased focus on energy security,
industrial competitiveness, and a fair transition. In response, Nostrum
establishes its strategic foundations and assumptions — including
price projections, demand forecasts, and regulatory frameworks —
based on references such as analyst and institutional consensus,
country-specific regulations, and our own vision of the energy
transition. These assumptions remain consistent with those used in
other Group-wide projections, reinforcing alignment across our
business planning.
For this year’s climate risk analysis and reporting, we examined
various scenarios proposed by international organisations and
agencies. We based our assessment primarily on the Net Zero
Emissions by 2050 Scenario (NZE Scenario) developed by the
International Energy Agency (IEA), the scenario was originally
published in 2021, with an update issued in October 2022, and
incorporated Kazakhstan’s Strategy on Achieving Carbon Neutrality by
2060, which aligns with the country’s commitments under the Paris
Agreement.
Our approach remains consistent with previous years, as we continue
to utilise the same climate scenarios and analytical methods annually,
making adjustments only for significant changes in external factors or
internal operations.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
60
STRATEGIC REPORT
Nostrum also considered the UK government’s commitment to a net-
zero economy, given that Nostrum is headquartered there. However,
we determined that this commitment is not directly relevant, as the
vast majority of Nostrum’s emissions do not contribute to the UK’s
national emissions.
The Net Zero Emissions by 2050 (NZE) Scenario is a normative
framework designed to achieve specific targets, including net-zero
emissions from the energy sector by 2050 without relying on offsets
from other sectors. It sets an emissions trajectory aimed at limiting
global temperature rise to below 1.5°C by 2100. This scenario outlines
a pathway to achieving this goal.
To reach net zero by 2050, the NZE Scenario envisions a
transformation of the global energy system, driven by three key shifts:
widespread electrification across industries, major advancements in
energy efficiency and intensity, and stronger global policy coordination
and collaboration. Under this scenario, the global economy transitions
away from a fossil fuel-dominated model toward one primarily
powered by renewable energy. As a result, the decline in demand for
oil and gas exerts downward pressure on prices.
Kazakhstan’s Strategy on Achieving Carbon Neutrality by 2060 aims to
increase the share of renewable energy in the country’s total energy
balance to 15% by 2030 and reduce GHG emissions by 15% by
December 2030 compared to 1990 levels. It also includes
strengthening the Kazakhstan Emissions Trading System (ETS) to align
with international carbon pricing standards, the introduction of
stricter carbon tax policies to incentivise emission reductions, and
strengthening environmental policies to align with international
climate commitments. Additionally, the strategy emphasises the
integration of sustainability principles into Kazakhstan’s economic and
industrial policies to support long-term decarbonisation efforts.
Considering the short-, medium-, and long-term horizons, the
company recognises the need for flexibility in its strategic plans and
the ability to adjust operations as conditions evolve. To assess its
resilience under different climate-related scenarios, the company
applied both a base-case scenario and a severe but plausible scenario:
Base-case scenario (high-carbon climate scenario – more than 4°C) –
assumes a gradual transition toward carbon neutrality, reflecting a
moderate pace of economic decarbonisation. This scenario aligns with
the base-case scenario used in the viability assessment (see pages 27-
28).
Severe but plausible scenario – envisions extreme shifts in the global
economy and the implementation of drastic measures to accelerate
Kazakhstan’s progress toward net-zero emissions (very low-carbon
climate scenario – less than 1.5°C).
The base-case scenario includes the implementation of energy
efficiency measures aimed at reducing greenhouse gas emissions by
5% annually compared to the previous year. This scenario
encompasses various initiatives, such as asset digitalisation, the
deployment of an Automated Reporting System, the installation of an
automated emission monitoring system, and water and energy
efficiency projects to enhance overall sustainability and operational
performance.
For the severe but plausible development scenario, designed to
stress-test the company’s resilience, we applied two key assumptions:
1) Oil price decline – according to the NZE Scenario, oil prices are
projected to fall to US$42 per barrel by 2030 and continue
declining, reaching US$25 per barrel by 2050.
2) Rising carbon prices – based on the NZE Scenario for emerging
markets and developing economies (without net-zero emissions
pledges), carbon prices are expected to reach US$25 per tonne
of CO₂ by 2030, US$85 per tonne by 2040, and US$180 per tonne
by 2050.
We have analysed various carbon price forecasts to stress-test our
strategy. While our primary focus has been on the NZE Scenario, we
also considered Kazakhstan’s carbon neutrality goals. Under the NZE
Scenario for emerging markets and developing economies with net-
zero emissions pledges, carbon prices are expected to rise
significantly, reaching an average of US$90 per tonne of CO₂ by 2030.
However, according to the World Bank, Kazakhstan’s current carbon
price remains low, with projections suggesting that a carbon price of
US$20 per tonne by 2030 would only be sufficient to achieve just over
half of the abatement target.
Given the wide range of carbon price projections, from very high to
relatively low, we have chosen to apply a mid-point approach in our
modeling. As a result, we have adopted the carbon price forecasts
from the NZE Scenario for emerging markets and developing
economies without net-zero emissions pledges.
These assumptions have been incorporated into the three-year
financial model to assess Nostrum’s strategic resilience amid the
challenges and opportunities posed by climate change in the short
term, in line with the NZE Scenario and Kazakhstan’s Strategy on
Achieving Carbon Neutrality by 2060.
As part of this assessment, we have identified Zhaikmunai and
Chinarevskoye fields as the assets most exposed to transition risks.
These fields, given their reliance on oil and gas production, face
potential financial and operational impacts due to carbon pricing
policies, shifts in global demand, and regulatory pressures. The
evolving economic and environmental landscape may require
adjustments in operational strategies to mitigate financial risks
associated with stricter emissions regulations and declining
hydrocarbon demand.
Building on this evaluation, we also refer to the Viability Statement
(pages 27-28), which considers the company’s resilience against key
risks and uncertainties.
Stress-testing our financial projections under these conservative
policy assumptions confirms that the company remains resilient under
a 1.5°C climate scenario. Furthermore, we believe that Nostrum has a
solid financial foundation and sufficient flexibility in its business plan
to effectively adapt to extreme climate-related impacts.
Our strategy undergoes annual validation by the Board of Directors to
ensure its continued relevance and resilience. Please refer to the
Governance section for further details. Adjustments will be made as
necessary if there are significant shifts in the global environment.
Risk Management
TCFD recommendation:
Disclose how the organisation identifies, assesses, and
manages climate-related risks.
Read more about our risk management on pages 20-21
a) Describe the organisation’s processes for identifying and
assessing climate-related risks;
b) Describe the organisation’s processes for managing climate-
related risks;
c) Describe how processes for identifying, assessing, and managing
climate-related risks are integrated into the organisation’s
overall risk management.
Nostrum employs a structured approach to identifying and assessing
climate-related risks, integrating them into the company’s overall risk
management framework. These risks are embedded into our overall
Group Risk Management framework and form an integral part of
Nostrum’s risk management and internal controls system. We include
“climate change risks” as a principal risk and uncertainty on our
Company risk register (see page 24).
STRATEGIC REPORT
Nostrum also considered the UK government’s commitment to a net-
zero economy, given that Nostrum is headquartered there. However,
we determined that this commitment is not directly relevant, as the
vast majority of Nostrum’s emissions do not contribute to the UK’s
national emissions.
The Net Zero Emissions by 2050 (NZE) Scenario is a normative
framework designed to achieve specific targets, including net-zero
emissions from the energy sector by 2050 without relying on offsets
from other sectors. It sets an emissions trajectory aimed at limiting
global temperature rise to below 1.5°C by 2100. This scenario outlines
a pathway to achieving this goal.
To reach net zero by 2050, the NZE Scenario envisions a
transformation of the global energy system, driven by three key shifts:
widespread electrification across industries, major advancements in
energy efficiency and intensity, and stronger global policy coordination
and collaboration. Under this scenario, the global economy transitions
away from a fossil fuel-dominated model toward one primarily
powered by renewable energy. As a result, the decline in demand for
oil and gas exerts downward pressure on prices.
Kazakhstan’s Strategy on Achieving Carbon Neutrality by 2060 aims to
increase the share of renewable energy in the country’s total energy
balance to 15% by 2030 and reduce GHG emissions by 15% by
December 2030 compared to 1990 levels. It also includes
strengthening the Kazakhstan Emissions Trading System (ETS) to align
with international carbon pricing standards, the introduction of
stricter carbon tax policies to incentivise emission reductions, and
strengthening environmental policies to align with international
climate commitments. Additionally, the strategy emphasises the
integration of sustainability principles into Kazakhstan’s economic and
industrial policies to support long-term decarbonisation efforts.
Considering the short-, medium-, and long-term horizons, the
company recognises the need for flexibility in its strategic plans and
the ability to adjust operations as conditions evolve. To assess its
resilience under different climate-related scenarios, the company
applied both a base-case scenario and a severe but plausible scenario:
Base-case scenario (high-carbon climate scenario – more than 4°C) –
assumes a gradual transition toward carbon neutrality, reflecting a
moderate pace of economic decarbonisation. This scenario aligns with
the base-case scenario used in the viability assessment (see pages 27-
28).
Severe but plausible scenario – envisions extreme shifts in the global
economy and the implementation of drastic measures to accelerate
Kazakhstan’s progress toward net-zero emissions (very low-carbon
climate scenario – less than 1.5°C).
The base-case scenario includes the implementation of energy
efficiency measures aimed at reducing greenhouse gas emissions by
5% annually compared to the previous year. This scenario
encompasses various initiatives, such as asset digitalisation, the
deployment of an Automated Reporting System, the installation of an
automated emission monitoring system, and water and energy
efficiency projects to enhance overall sustainability and operational
performance.
For the severe but plausible development scenario, designed to
stress-test the company’s resilience, we applied two key assumptions:
1) Oil price decline – according to the NZE Scenario, oil prices are
projected to fall to US$42 per barrel by 2030 and continue
declining, reaching US$25 per barrel by 2050.
2) Rising carbon prices – based on the NZE Scenario for emerging
markets and developing economies (without net-zero emissions
pledges), carbon prices are expected to reach US$25 per tonne
of CO₂ by 2030, US$85 per tonne by 2040, and US$180 per tonne
by 2050.
We have analysed various carbon price forecasts to stress-test our
strategy. While our primary focus has been on the NZE Scenario, we
also considered Kazakhstan’s carbon neutrality goals. Under the NZE
Scenario for emerging markets and developing economies with net-
zero emissions pledges, carbon prices are expected to rise
significantly, reaching an average of US$90 per tonne of CO₂ by 2030.
However, according to the World Bank, Kazakhstan’s current carbon
price remains low, with projections suggesting that a carbon price of
US$20 per tonne by 2030 would only be sufficient to achieve just over
half of the abatement target.
Given the wide range of carbon price projections, from very high to
relatively low, we have chosen to apply a mid-point approach in our
modeling. As a result, we have adopted the carbon price forecasts
from the NZE Scenario for emerging markets and developing
economies without net-zero emissions pledges.
These assumptions have been incorporated into the three-year
financial model to assess Nostrum’s strategic resilience amid the
challenges and opportunities posed by climate change in the short
term, in line with the NZE Scenario and Kazakhstan’s Strategy on
Achieving Carbon Neutrality by 2060.
As part of this assessment, we have identified Zhaikmunai and
Chinarevskoye fields as the assets most exposed to transition risks.
These fields, given their reliance on oil and gas production, face
potential financial and operational impacts due to carbon pricing
policies, shifts in global demand, and regulatory pressures. The
evolving economic and environmental landscape may require
adjustments in operational strategies to mitigate financial risks
associated with stricter emissions regulations and declining
hydrocarbon demand.
Building on this evaluation, we also refer to the Viability Statement
(pages 27-28), which considers the company’s resilience against key
risks and uncertainties.
Stress-testing our financial projections under these conservative
policy assumptions confirms that the company remains resilient under
a 1.5°C climate scenario. Furthermore, we believe that Nostrum has a
solid financial foundation and sufficient flexibility in its business plan
to effectively adapt to extreme climate-related impacts.
Our strategy undergoes annual validation by the Board of Directors to
ensure its continued relevance and resilience. Please refer to the
Governance section for further details. Adjustments will be made as
necessary if there are significant shifts in the global environment.
Risk Management
TCFD recommendation:
Disclose how the organisation identifies, assesses, and
manages climate-related risks.
Read more about our risk management on pages 20-21
a) Describe the organisation’s processes for identifying and
assessing climate-related risks;
b) Describe the organisation’s processes for managing climate-
related risks;
c) Describe how processes for identifying, assessing, and managing
climate-related risks are integrated into the organisation’s
overall risk management.
Nostrum employs a structured approach to identifying and assessing
climate-related risks, integrating them into the company’s overall risk
management framework. These risks are embedded into our overall
Group Risk Management framework and form an integral part of
Nostrum’s risk management and internal controls system. We include
“climate change risks” as a principal risk and uncertainty on our
Company risk register (see page 24).
Climate-related Financial Disclosures
61 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Climate-related risk management is overseen by Nostrum’s Board of
Directors, supported by the Audit Committee and HSE Committee.
These governance structures ensure climate risks are effectively
identified, assessed, and managed.
Group’s management constantly evaluates climate-related risks and
integrates them into corporate strategy.
The HSE Committee, overseen by the Group Head of HSE, monitors
operational risks related to environmental and safety issues. Its
members meet regularly to assess emerging risks, regulatory
developments, and stakeholder expectations, ensuring climate-
related considerations are embedded in strategic decision-making.
Nostrum categorises climate-related risks into transition and physical
risks. Transition risks include policy and legal changes such as carbon
taxation and stricter regulations, technological risks from high
investment needs and asset obsolescence, market risks due to shifting
consumer demand and ESG-driven financing restrictions, and
reputational risks from stakeholder scrutiny and sustainability
commitments. Physical risks include acute risks like extreme weather
events affecting transportation and operations, and chronic risks such
as long-term temperature shifts impacting infrastructure and
efficiency. Nostrum integrates climate risk assessments into strategic
planning, regulatory monitoring, and scenario analysis to ensure long-
term resilience.
We conduct horizon scanning to stay ahead of emerging risks through
regular reviews of global climate policies, engagement with
stakeholders, and participation in industry forums. Risk assessment
tools include climate scenario analysis aligned with IPCC pathways and
materiality assessments to prioritise key risks.
Climate-related risks assessment is based on likelihood, financial
impact, and time horizon. Materiality assessments rank climate risks
alongside operational, financial, and geopolitical risks. Quantitative
analysis includes financial modeling to evaluate project viability.
Qualitative analysis involves workshops with operational teams to
assess supply chain and operational vulnerabilities.
For policy and market trend evaluation we adopt industry best
practices, using TCFD for risk classification, IPCC scenarios for long-
term impact assessment, and the IEA Net Zero Roadmap.
Physical risks management: Recognising the physical risks associated
with climate change, the company has incorporated climate risk
considerations into its routine risk assessments and overall business
strategy. Nostrum has established robust measures to manage risks
associated with extreme weather events, helping to mitigate potential
climate-related impacts and enhance infrastructure resilience. Key
initiatives include adaptation measures and the implementation of
comprehensive emergency response and disaster recovery
programmes, featuring regular training, testing procedures, and
dedicated emergency rescue teams at its production facilities.
Policy and legal risks management: Nostrum recognises the policy
and legal risks associated with climate change and actively integrates
climate-related considerations into its strategic planning, risk
management, and investment decision-making processes, allowing
for proactive adaptation to regulatory developments. The company
ensures compliance with evolving regulations through regular
assessments. The company’s legal team plays a critical role in
providing analysis and advice to mitigate potential regulatory risks.
Market risks management: Nostrum mitigates climate-related market
risks by diversifying into gas processing, optimising infrastructure use,
and reducing reliance on oil. The company integrates climate
considerations into strategic planning and risk management to align
with the energy transition. Cost efficiency improvements and
operational flexibility help navigate price volatility and regulatory
changes. Maintaining a strong balance sheet and prudent liquidity
supports long-term resilience and growth in a lower-carbon economy.
Technology risks management: Nostrum’s operations team actively
mitigates risks and identifies opportunities associated with emerging
technologies in the evolving global energy landscape. The team
conducts technology assessments and disruptive technology
evaluations, providing recommendations that inform strategic
decisions. We are investing in digitalisation, automation, and methane
emission management solutions to enhance operational efficiency,
manage risks, and support our transition to a lower-carbon future.
Reputation risks management: Nostrum actively mitigates
reputation-related climate risks by ensuring accurate data reporting
and strong environmental risk management practices. We align
corporate policies and public positions on climate change to
regulatory expectations and stakeholder concerns, minimising
potential reputational risks. Our transparent climate disclosures
through TCFD, CDP, and ESG reporting reinforce accountability and
demonstrate progress in climate action. We engage regularly with
investors, local communities, and stakeholders to assess and address
climate-related social, political, and regulatory risks.
Metrics and Targets
TCFD recommendation:
Disclose the metrics and targets used to assess and manage
relevant climate-related risks and opportunities where such
information is material.
Read more about our risk management on pages 20-21
a) Disclose the metrics used by the organisation to assess climate-
related risks and opportunities in line with its strategy and risk
management process.
Nostrum employs a range of defined metrics and targets to ensure
that business objectives related to climate change and the energy
transition are achieved. Our key risk indicators focus on carbon
emissions, air quality, flaring frequency, water use, and waste
management, all of which are measured, managed, and reported to
both the Board and regulatory authorities. A specific KPI is tied to GHG
reduction (see below). The above metrics are monitored by regulatory
authorities and undergo regular review to ensure compliance with
environmental regulations. In addition to these KPIs, we have
implemented various initiatives and projects aimed at reducing
emissions (please see pages 48-54 of the Environment section).
Management of climate-related risks and opportunities is embedded
into the company’s overall approach, including its executive
remuneration framework. Please refer to the Remuneration
Committee Report for further details on climate-related KPIs.
Each year, an independent provider prepares for us the Greenhouse
Gas Emissions Inventory Report (covering carbon dioxide, methane,
nitrous oxide, and perfluorocarbons), with independent verification of
the report.
The methodology for calculating greenhouse gas emissions and
absorption is based on the Order of the Minister of Ecology and
Natural Resources of the Republic of Kazakhstan, in accordance with
the Environmental Code of the Republic of Kazakhstan, the Law of the
Republic of Kazakhstan On State Statistics”, the Rules for State
Regulation in the Sphere of Greenhouse Gas Emissions and
Absorption, as well as the IPCC Guidelines for National Greenhouse
Gas Inventories.
61 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Climate-related risk management is overseen by Nostrum’s Board of
Directors, supported by the Audit Committee and HSE Committee.
These governance structures ensure climate risks are effectively
identified, assessed, and managed.
Group’s management constantly evaluates climate-related risks and
integrates them into corporate strategy.
The HSE Committee, overseen by the Group Head of HSE, monitors
operational risks related to environmental and safety issues. Its
members meet regularly to assess emerging risks, regulatory
developments, and stakeholder expectations, ensuring climate-
related considerations are embedded in strategic decision-making.
Nostrum categorises climate-related risks into transition and physical
risks. Transition risks include policy and legal changes such as carbon
taxation and stricter regulations, technological risks from high
investment needs and asset obsolescence, market risks due to shifting
consumer demand and ESG-driven financing restrictions, and
reputational risks from stakeholder scrutiny and sustainability
commitments. Physical risks include acute risks like extreme weather
events affecting transportation and operations, and chronic risks such
as long-term temperature shifts impacting infrastructure and
efficiency. Nostrum integrates climate risk assessments into strategic
planning, regulatory monitoring, and scenario analysis to ensure long-
term resilience.
We conduct horizon scanning to stay ahead of emerging risks through
regular reviews of global climate policies, engagement with
stakeholders, and participation in industry forums. Risk assessment
tools include climate scenario analysis aligned with IPCC pathways and
materiality assessments to prioritise key risks.
Climate-related risks assessment is based on likelihood, financial
impact, and time horizon. Materiality assessments rank climate risks
alongside operational, financial, and geopolitical risks. Quantitative
analysis includes financial modeling to evaluate project viability.
Qualitative analysis involves workshops with operational teams to
assess supply chain and operational vulnerabilities.
For policy and market trend evaluation we adopt industry best
practices, using TCFD for risk classification, IPCC scenarios for long-
term impact assessment, and the IEA Net Zero Roadmap.
Physical risks management: Recognising the physical risks associated
with climate change, the company has incorporated climate risk
considerations into its routine risk assessments and overall business
strategy. Nostrum has established robust measures to manage risks
associated with extreme weather events, helping to mitigate potential
climate-related impacts and enhance infrastructure resilience. Key
initiatives include adaptation measures and the implementation of
comprehensive emergency response and disaster recovery
programmes, featuring regular training, testing procedures, and
dedicated emergency rescue teams at its production facilities.
Policy and legal risks management: Nostrum recognises the policy
and legal risks associated with climate change and actively integrates
climate-related considerations into its strategic planning, risk
management, and investment decision-making processes, allowing
for proactive adaptation to regulatory developments. The company
ensures compliance with evolving regulations through regular
assessments. The company’s legal team plays a critical role in
providing analysis and advice to mitigate potential regulatory risks.
Market risks management: Nostrum mitigates climate-related market
risks by diversifying into gas processing, optimising infrastructure use,
and reducing reliance on oil. The company integrates climate
considerations into strategic planning and risk management to align
with the energy transition. Cost efficiency improvements and
operational flexibility help navigate price volatility and regulatory
changes. Maintaining a strong balance sheet and prudent liquidity
supports long-term resilience and growth in a lower-carbon economy.
Technology risks management: Nostrum’s operations team actively
mitigates risks and identifies opportunities associated with emerging
technologies in the evolving global energy landscape. The team
conducts technology assessments and disruptive technology
evaluations, providing recommendations that inform strategic
decisions. We are investing in digitalisation, automation, and methane
emission management solutions to enhance operational efficiency,
manage risks, and support our transition to a lower-carbon future.
Reputation risks management: Nostrum actively mitigates
reputation-related climate risks by ensuring accurate data reporting
and strong environmental risk management practices. We align
corporate policies and public positions on climate change to
regulatory expectations and stakeholder concerns, minimising
potential reputational risks. Our transparent climate disclosures
through TCFD, CDP, and ESG reporting reinforce accountability and
demonstrate progress in climate action. We engage regularly with
investors, local communities, and stakeholders to assess and address
climate-related social, political, and regulatory risks.
Metrics and Targets
TCFD recommendation:
Disclose the metrics and targets used to assess and manage
relevant climate-related risks and opportunities where such
information is material.
Read more about our risk management on pages 20-21
a) Disclose the metrics used by the organisation to assess climate-
related risks and opportunities in line with its strategy and risk
management process.
Nostrum employs a range of defined metrics and targets to ensure
that business objectives related to climate change and the energy
transition are achieved. Our key risk indicators focus on carbon
emissions, air quality, flaring frequency, water use, and waste
management, all of which are measured, managed, and reported to
both the Board and regulatory authorities. A specific KPI is tied to GHG
reduction (see below). The above metrics are monitored by regulatory
authorities and undergo regular review to ensure compliance with
environmental regulations. In addition to these KPIs, we have
implemented various initiatives and projects aimed at reducing
emissions (please see pages 48-54 of the Environment section).
Management of climate-related risks and opportunities is embedded
into the company’s overall approach, including its executive
remuneration framework. Please refer to the Remuneration
Committee Report for further details on climate-related KPIs.
Each year, an independent provider prepares for us the Greenhouse
Gas Emissions Inventory Report (covering carbon dioxide, methane,
nitrous oxide, and perfluorocarbons), with independent verification of
the report.
The methodology for calculating greenhouse gas emissions and
absorption is based on the Order of the Minister of Ecology and
Natural Resources of the Republic of Kazakhstan, in accordance with
the Environmental Code of the Republic of Kazakhstan, the Law of the
Republic of Kazakhstan On State Statistics”, the Rules for State
Regulation in the Sphere of Greenhouse Gas Emissions and
Absorption, as well as the IPCC Guidelines for National Greenhouse
Gas Inventories.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
62
STRATEGIC REPORT
Looking ahead, Nostrum plans to integrate carbon pricing into the
economic evaluation of future investment opportunities, both within
Chinarevskoye and other assets. Through benchmarking against
industry peers, leading companies in the sector, and regional carbon
pricing developments, we will apply an internal carbon price in
investment decisions, effectively raising the hurdle rate for project
approvals. For more details, please see pages 48-54.
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3
greenhouse gas (GHG) emissions, and the related risks.
In the Environment (GHG Emissions Results) section of this report, we
provide a comprehensive disclosure of our Scope 1, Scope 2, and
Scope 3 GHG emissions.
These emissions have been reported on an annual basis in our Annual
Report and on the Company website, in line with our commitment to
transparency and compliance with the GHG Protocol, as mandated by
the Republic of Kazakhstan’s legislative requirements.
Summary of GHG Emissions (in tCO 2 e):
2024 2025
Scope 1 256,082 226,217
Scope 2 7 3
Scope 3 2,801 1,140,893
Waste generated in operations 1,313 1,196
Capital goods 184 301
Goods and services 1,304 834
Use of Sold products 1,132,586
Down Stream Transportation 447
Proccesing of Sold Products 5,529
Detailed results of Scope 3 calculations will be covered in CDP
submission for 2025. For a detailed information on GHG emissions,
please see page 52-54 of the Strategic Report.
The Company remains committed to reducing emissions from
business and commuting travel, strengthening collaboration with
suppliers to implement sustainable practices, and further expanding
the Scope 3 emissions analysis in future reporting.
c) Describe the targets used by the organisation to manage
climate- related risks and opportunities and performance against
target.
Nostrum uses key performance indicators (KPIs) to manage climate-
related risks and to realize climate-related opportunities in line with
its ESG strategy and regulatory requirements. These KPIs provide
measurable benchmarks to monitor performance, guide strategic
decisions, and promote continuous improvement.
Furthermore, as required by the section 414CB(2A)(h) of the UK
Companies Act 2006, Nostrum describes the KPIs used to manage
climate-related risks and realise climate-related opportunities and the
calculations on which those KPIs are base.
Climate-Related KPIs and Calculations
1. Greenhouse Gas (GHG) Emissions
• Purpose: Reduce the company’s carbon footprint and ensure
compliance with the national GHG allocation plan (201,283 tons of
CO₂ for 2025).
• Calculation: Measured in tons of CO₂ equivalent, with reduction
efforts focused on energy efficiency, minimizing flaring, and leak
prevention.
2. Health, Safety, and Environmental (HSE) KPIs
• Total Recordable Injury Frequency (TRIF) – Measures workplace
injuries per million hours worked.
• Lost Time Injury Frequency (LTIF) – Tracks incidents resulting in lost
workdays.
• Road Traffic Incidents (RTIs) – Monitors transportation safety.
3. ESG Performance and Ratings
• Purpose: Maintain current ESG rating levels while aiming for gradual
improvement, especially in light of tightening regulation and rating
agencies requirements, and ensure alignment with the Annual ESG
Plan.
• Calculation: Tracked through external ESG ratings and internal
assigned ESG initiatives, with the following reporting structure.
4. Management and Reporting
• Emissions, waste, and HSE performance are managed through
structured policies and initiatives.
• Monthly QHSE reports track KPIs, ensuring accountability.
• The Board oversees climate governance, risk assessment, and
emissions management.
These KPIs help Nostrum enhance efficiency, mitigate climate risks,
and strengthen sustainability commitments, capture opportunities in
low-emission technologies and ESG investment trends.
For more details, please refer to the Environment section on pages
48-54. We recognize that achieving net-zero emissions is a long-term
journey for the Group, and we remain committed to tracking progress
through interim targets in the coming years.
Nostrum aims to play an active role in supporting Kazakhstan’s
transition to cleaner energy and its goal of carbon neutrality by 2060,
aligning our strategy with national and global decarbonization efforts.
This strategic report is approved by the Board.
Viktor Gladun
Chief Executive Officer
25 April 2026
Nostrum Oil & Gas PLC, registered number 8717287
STRATEGIC REPORT
Looking ahead, Nostrum plans to integrate carbon pricing into the
economic evaluation of future investment opportunities, both within
Chinarevskoye and other assets. Through benchmarking against
industry peers, leading companies in the sector, and regional carbon
pricing developments, we will apply an internal carbon price in
investment decisions, effectively raising the hurdle rate for project
approvals. For more details, please see pages 48-54.
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3
greenhouse gas (GHG) emissions, and the related risks.
In the Environment (GHG Emissions Results) section of this report, we
provide a comprehensive disclosure of our Scope 1, Scope 2, and
Scope 3 GHG emissions.
These emissions have been reported on an annual basis in our Annual
Report and on the Company website, in line with our commitment to
transparency and compliance with the GHG Protocol, as mandated by
the Republic of Kazakhstan’s legislative requirements.
Summary of GHG Emissions (in tCO 2 e):
2024 2025
Scope 1 256,082 226,217
Scope 2 7 3
Scope 3 2,801 1,140,893
Waste generated in operations 1,313 1,196
Capital goods 184 301
Goods and services 1,304 834
Use of Sold products 1,132,586
Down Stream Transportation 447
Proccesing of Sold Products 5,529
Detailed results of Scope 3 calculations will be covered in CDP
submission for 2025. For a detailed information on GHG emissions,
please see page 52-54 of the Strategic Report.
The Company remains committed to reducing emissions from
business and commuting travel, strengthening collaboration with
suppliers to implement sustainable practices, and further expanding
the Scope 3 emissions analysis in future reporting.
c) Describe the targets used by the organisation to manage
climate- related risks and opportunities and performance against
target.
Nostrum uses key performance indicators (KPIs) to manage climate-
related risks and to realize climate-related opportunities in line with
its ESG strategy and regulatory requirements. These KPIs provide
measurable benchmarks to monitor performance, guide strategic
decisions, and promote continuous improvement.
Furthermore, as required by the section 414CB(2A)(h) of the UK
Companies Act 2006, Nostrum describes the KPIs used to manage
climate-related risks and realise climate-related opportunities and the
calculations on which those KPIs are base.
Climate-Related KPIs and Calculations
1. Greenhouse Gas (GHG) Emissions
• Purpose: Reduce the company’s carbon footprint and ensure
compliance with the national GHG allocation plan (201,283 tons of
CO₂ for 2025).
• Calculation: Measured in tons of CO₂ equivalent, with reduction
efforts focused on energy efficiency, minimizing flaring, and leak
prevention.
2. Health, Safety, and Environmental (HSE) KPIs
• Total Recordable Injury Frequency (TRIF) – Measures workplace
injuries per million hours worked.
• Lost Time Injury Frequency (LTIF) – Tracks incidents resulting in lost
workdays.
• Road Traffic Incidents (RTIs) – Monitors transportation safety.
3. ESG Performance and Ratings
• Purpose: Maintain current ESG rating levels while aiming for gradual
improvement, especially in light of tightening regulation and rating
agencies requirements, and ensure alignment with the Annual ESG
Plan.
• Calculation: Tracked through external ESG ratings and internal
assigned ESG initiatives, with the following reporting structure.
4. Management and Reporting
• Emissions, waste, and HSE performance are managed through
structured policies and initiatives.
• Monthly QHSE reports track KPIs, ensuring accountability.
• The Board oversees climate governance, risk assessment, and
emissions management.
These KPIs help Nostrum enhance efficiency, mitigate climate risks,
and strengthen sustainability commitments, capture opportunities in
low-emission technologies and ESG investment trends.
For more details, please refer to the Environment section on pages
48-54. We recognize that achieving net-zero emissions is a long-term
journey for the Group, and we remain committed to tracking progress
through interim targets in the coming years.
Nostrum aims to play an active role in supporting Kazakhstan’s
transition to cleaner energy and its goal of carbon neutrality by 2060,
aligning our strategy with national and global decarbonization efforts.
This strategic report is approved by the Board.
Viktor Gladun
Chief Executive Officer
25 April 2026
Nostrum Oil & Gas PLC, registered number 8717287
63
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
INTRODUCTION TO CORPORATE GOVERNANCE
Section 1: Board leadership and company purpose
A successful company is led by an effective and entrepreneurial
board, whose role is to promote the long-term sustainable success of
the company, generating value for shareholders and contributing to
wider society. The board should ensure that the necessary resources,
policies and practices are in place for the company to meet its
objectives and measure performance against them.
See pages 66-67.
The board should establish the company’s purpose, values and
strategy, and satisfy itself that these and its culture are all aligned. All
directors must act with integrity, lead by example and promote the
desired culture.
See pages 44-46, 8.
Governance reporting should focus on board decisions and their
outcomes in the context of the company’s strategy and objectives.
Where the board reports on departures from the Code’s provisions, it
should provide a clear explanation.
See pages 20-21.
In order for the company to meet its responsibilities to shareholders
and stakeholders, the board should ensure effective engagement
with, and encourage participation from, these parties.
See pages 10-11 and 68.
The board should ensure that workforce policies and practices are
consistent with the company’s values and support its long-term
sustainable success. The workforce should be able to raise any matters
of concern.
See pages 44-46.
Section 2: Division of responsibilities
The chair leads the board and is responsible for its overall
effectiveness in directing the company. They should demonstrate
objective judgement throughout their tenure and promote a culture
of openness and debate. In addition, the chair facilitates constructive
board relations and the effective contribution of all non- executive
directors, and ensures that directors receive accurate, timely and
clear information.
See pages 72-74.
The board should include an appropriate combination of executive
and non-executive (and, in particular, independent non-executive)
directors, such that no one individual or small group of individuals
dominates the board’s decision-making. There should be a clear
division of responsibilities between the leadership of the board and
the executive leadership of the company’s business.
See page 72-74.
Non-executive directors should have sufficient time to meet their
board responsibilities. They should provide constructive challenge,
strategic guidance, offer specialist advice and hold management to
account.
See page 72-74.
The board, supported by the company secretary, should ensure that it
has the policies, processes, information, time and resources it needs
in order to function effectively and efficiently.
See page 72-74.
Section 3: Composition, succession and evaluation
Appointments to the board should be subject to a formal, rigorous
and transparent procedure, and an effective succession plan for the
board and senior management should be maintained. Both
appointments and succession plans should be based on merit and
objective criteria. They should promote diversity, inclusion and equal
opportunity.
See page 72-74.
The board and its committees should have a combination of skills,
experience and knowledge. Consideration should be given to the
length of service of the board as a whole and membership regularly
refreshed.
See page 66-67 and committee reports.
Annual evaluation of the board should consider its performance,
composition, diversity and how effectively members work together to
achieve objectives. Individual evaluation should demonstrate whether
each director continues to contribute effectively.
See page 68.
Section 4: Audit, risk and internal control
The board should establish formal and transparent policies and
procedures to ensure the independence and effectiveness of internal
and external audit functions and satisfy itself on the integrity of
financial and narrative statements.
See page 79-79.
The board should present a fair, balanced and understandable
assessment of the company’s position and prospects.
See page 97.
The board should establish and maintain an effective risk
management and internal control framework, and determine the
nature and extent of the principal risks the company is willing to take in
order to achieve its long-term strategic objectives.
See page 20-21.
Section 5: Remuneration
Remuneration policies and practices should be designed to support
strategy and promote long-term sustainable success. Executive
remuneration should be aligned to company purpose and values, and
be clearly linked to the successful delivery of the company’s long-term
strategy.
See page 82-93.
A formal and transparent procedure for developing policy on
executive remuneration and determining director and senior
management remuneration should be established. No director should
be involved in deciding their own remuneration outcome.
See page 82-93.
Directors should exercise independent judgement and discretion
when authorising remuneration outcomes, taking account of
company and individual performance, and wider circumstances.
See page 82-93.
INTRODUCTION TO CORPORATE GOVERNANCE
Section 1: Board leadership and company purpose
A successful company is led by an effective and entrepreneurial
board, whose role is to promote the long-term sustainable success of
the company, generating value for shareholders and contributing to
wider society. The board should ensure that the necessary resources,
policies and practices are in place for the company to meet its
objectives and measure performance against them.
See pages 66-67.
The board should establish the company’s purpose, values and
strategy, and satisfy itself that these and its culture are all aligned. All
directors must act with integrity, lead by example and promote the
desired culture.
See pages 44-46, 8.
Governance reporting should focus on board decisions and their
outcomes in the context of the company’s strategy and objectives.
Where the board reports on departures from the Code’s provisions, it
should provide a clear explanation.
See pages 20-21.
In order for the company to meet its responsibilities to shareholders
and stakeholders, the board should ensure effective engagement
with, and encourage participation from, these parties.
See pages 10-11 and 68.
The board should ensure that workforce policies and practices are
consistent with the company’s values and support its long-term
sustainable success. The workforce should be able to raise any matters
of concern.
See pages 44-46.
Section 2: Division of responsibilities
The chair leads the board and is responsible for its overall
effectiveness in directing the company. They should demonstrate
objective judgement throughout their tenure and promote a culture
of openness and debate. In addition, the chair facilitates constructive
board relations and the effective contribution of all non- executive
directors, and ensures that directors receive accurate, timely and
clear information.
See pages 72-74.
The board should include an appropriate combination of executive
and non-executive (and, in particular, independent non-executive)
directors, such that no one individual or small group of individuals
dominates the board’s decision-making. There should be a clear
division of responsibilities between the leadership of the board and
the executive leadership of the company’s business.
See page 72-74.
Non-executive directors should have sufficient time to meet their
board responsibilities. They should provide constructive challenge,
strategic guidance, offer specialist advice and hold management to
account.
See page 72-74.
The board, supported by the company secretary, should ensure that it
has the policies, processes, information, time and resources it needs
in order to function effectively and efficiently.
See page 72-74.
Section 3: Composition, succession and evaluation
Appointments to the board should be subject to a formal, rigorous
and transparent procedure, and an effective succession plan for the
board and senior management should be maintained. Both
appointments and succession plans should be based on merit and
objective criteria. They should promote diversity, inclusion and equal
opportunity.
See page 72-74.
The board and its committees should have a combination of skills,
experience and knowledge. Consideration should be given to the
length of service of the board as a whole and membership regularly
refreshed.
See page 66-67 and committee reports.
Annual evaluation of the board should consider its performance,
composition, diversity and how effectively members work together to
achieve objectives. Individual evaluation should demonstrate whether
each director continues to contribute effectively.
See page 68.
Section 4: Audit, risk and internal control
The board should establish formal and transparent policies and
procedures to ensure the independence and effectiveness of internal
and external audit functions and satisfy itself on the integrity of
financial and narrative statements.
See page 79-79.
The board should present a fair, balanced and understandable
assessment of the company’s position and prospects.
See page 97.
The board should establish and maintain an effective risk
management and internal control framework, and determine the
nature and extent of the principal risks the company is willing to take in
order to achieve its long-term strategic objectives.
See page 20-21.
Section 5: Remuneration
Remuneration policies and practices should be designed to support
strategy and promote long-term sustainable success. Executive
remuneration should be aligned to company purpose and values, and
be clearly linked to the successful delivery of the company’s long-term
strategy.
See page 82-93.
A formal and transparent procedure for developing policy on
executive remuneration and determining director and senior
management remuneration should be established. No director should
be involved in deciding their own remuneration outcome.
See page 82-93.
Directors should exercise independent judgement and discretion
when authorising remuneration outcomes, taking account of
company and individual performance, and wider circumstances.
See page 82-93.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
64
CORPORATE GOVERNANCE
Statement of compliance
Nostrum fully complied throughout 2025 with the provisions of the
Code except in the following respects:
Provision 5
Provision 5 of the Code states that “The board should understand the
views of the company’s other key stakeholders and describe in the
annual report how these and the matters set out in section 172 of the
Companies Act 2006 have been considered in board discussions and
decision-making. The board should keep engagement mechanisms
under review so that they remain effective.
For engagement with the workforce, one or a combination of the
following methods should be used:
• a director appointed from the workforce;
• a formal workforce advisory panel; or
• a designated non-executive director.
If the board has not chosen one or more of these methods, it should
explain what alternative arrangements are in place and why it
considers that they are effective.”.
Mr. Hopkinson, who was the designated non-executive director for
workforce engagement, was not reappointed at the 2025 AGM on 30
June 2025 and no other method of engagement with the workforce
has been put in place since that date.
Provision 6
Provision 6 of the Code states “There should be a means for the
workforce to raise concerns in confidence and – if they wish –
anonymously. The board should routinely review these arrangements
and the reports arising from their operation. It should ensure that
arrangements are in place for the proportionate and independent
investigation of such matters and for follow-up action.
The whistleblowing policy allows concerns to be raised in confidence
but not entirely anonymously, as the information is required to be
shared with the Audit Committee and the auditors.
Provision 10
Provision 10 of the Code states that “Circumstances which are likely to
impair, or could appear to impair, a non-executive director’s
independence include, but are not limited to, whether a director […]
has received or receives additional remuneration from the company
apart from a director’s fee, participates in the company’s share
option or a performance-related pay scheme, or is a member of the
company’s pension scheme”. Provision 10 further states that where
any of these or other relevant circumstances apply, and the board
nonetheless considers that the non-executive director is independent,
a clear explanation should be provided.
The Board notes that Chris Cox, Chris Hopkinson, Martin Gudgeon,
Fiona Paulus and Stephen Whyte were appointed in February 2023 as
part of the plan to support the executive team following the
Restructuring and enable the Company to create significant
stakeholder value by pursuing new strategic goals. Such appointments
were not made in the expectation or anticipation of any performance-
related remuneration for such directors. Mr Cox resigned as an
Independent Non-Executive Director on 31 May 2024. Mr Hopkinson
left the Board at the AGM on 30 June 2025. Stephen Whyte left the
Board on 16 October 2025. Fiona Paulus left the Board on 13 February
2026. Each of Stephen Whyte (as Chair), Christopher Hopkinson and
Fiona Paulus (as Independent Non-Executive Directors) were
considered by the Board to be independent (for the purposes of the
Code) notwithstanding their participation in the Management
Incentive Plan implemented in 2024.
Following the vote against the remuneration report at the 2025 AGM
the Company is taking independent legal advice in relation to
historical MIP payments in order to inform the steps it takes to
address the concerns of the Company’s stakeholders. The Company
intends to further develop a new remuneration framework in 2026
that appropriately aligns remuneration of the management and board
with the strategic objectives of the Company.
Provision 11
Provision 11 of the Code states “At least half the board, excluding the
chair, should be non-executive directors whom the board considers to
be independent.”.
At all times following the departure of Mr. Cox from the Board on 31
May 2024 and the appointment of Mr. Gladun as a director on 15
August 2024, less than half the Board excluding the chair, have been
non-executive directors whom the Board considers to be
Independent. The Board intends to recruit additional independent
directors.
Provision 12
Provision 12 of the Code states that “The board should appoint one of
the independent non-executive directors to be the senior
independent director to provide a sounding board for the chair and
serve as an intermediary for the other directors and shareholders. Led
by the senior independent director, the non-executive directors
should meet without the chair present at least annually to appraise
the chair’s performance, and on other occasions as necessary.”.
The Board has not to date appointed one of the independent non-
executive directors to act as the senior independent director, to
provide a sounding board for the chair and serve as an intermediary
for the other directors and shareholders. The Board believes that
there are currently effective arrangements in place for
communication between the chair and other directors and
shareholders without such appointment.
Compliance with the Code
On 31 May 2022, the Company’s listing category was transferred from “Premium Listing (commercial company)” to “Standard Listing (shares)”.
Following the FCA’s reforms implemented on 29 July 2024, the Company’s listing category is now Equity Shares (transition). The UK Financial
Reporting Council promotes high-quality corporate governance and reporting through the UK Corporate Governance Code published by the
Financial Reporting Council (FRC) in January 2024 (the “Code”) with which all companies with “Equity Shares (Commercial Companies)” listing on
the London Stock Exchange are required to either comply in full, or explain why, and to what extent, they do not comply. A copy of the Code is
available from the Financial Reporting Council’s website at www.frc.org.uk. The aim of the corporate governance report is to demonstrate how
the principles of the Code have been considered and applied by the Company. The Company intends to continue to comply with the Code or
explain any non-compliance as it would if it were in the “Equity Shares (Commercial Companies)” listing category. This statement should be read
in conjunction with the Corporate Governance section of this report as a whole. The headings on this page and the following page correspond to
the headings in the Code.
CORPORATE GOVERNANCE
Statement of compliance
Nostrum fully complied throughout 2025 with the provisions of the
Code except in the following respects:
Provision 5
Provision 5 of the Code states that “The board should understand the
views of the company’s other key stakeholders and describe in the
annual report how these and the matters set out in section 172 of the
Companies Act 2006 have been considered in board discussions and
decision-making. The board should keep engagement mechanisms
under review so that they remain effective.
For engagement with the workforce, one or a combination of the
following methods should be used:
• a director appointed from the workforce;
• a formal workforce advisory panel; or
• a designated non-executive director.
If the board has not chosen one or more of these methods, it should
explain what alternative arrangements are in place and why it
considers that they are effective.”.
Mr. Hopkinson, who was the designated non-executive director for
workforce engagement, was not reappointed at the 2025 AGM on 30
June 2025 and no other method of engagement with the workforce
has been put in place since that date.
Provision 6
Provision 6 of the Code states “There should be a means for the
workforce to raise concerns in confidence and – if they wish –
anonymously. The board should routinely review these arrangements
and the reports arising from their operation. It should ensure that
arrangements are in place for the proportionate and independent
investigation of such matters and for follow-up action.
The whistleblowing policy allows concerns to be raised in confidence
but not entirely anonymously, as the information is required to be
shared with the Audit Committee and the auditors.
Provision 10
Provision 10 of the Code states that “Circumstances which are likely to
impair, or could appear to impair, a non-executive director’s
independence include, but are not limited to, whether a director […]
has received or receives additional remuneration from the company
apart from a director’s fee, participates in the company’s share
option or a performance-related pay scheme, or is a member of the
company’s pension scheme”. Provision 10 further states that where
any of these or other relevant circumstances apply, and the board
nonetheless considers that the non-executive director is independent,
a clear explanation should be provided.
The Board notes that Chris Cox, Chris Hopkinson, Martin Gudgeon,
Fiona Paulus and Stephen Whyte were appointed in February 2023 as
part of the plan to support the executive team following the
Restructuring and enable the Company to create significant
stakeholder value by pursuing new strategic goals. Such appointments
were not made in the expectation or anticipation of any performance-
related remuneration for such directors. Mr Cox resigned as an
Independent Non-Executive Director on 31 May 2024. Mr Hopkinson
left the Board at the AGM on 30 June 2025. Stephen Whyte left the
Board on 16 October 2025. Fiona Paulus left the Board on 13 February
2026. Each of Stephen Whyte (as Chair), Christopher Hopkinson and
Fiona Paulus (as Independent Non-Executive Directors) were
considered by the Board to be independent (for the purposes of the
Code) notwithstanding their participation in the Management
Incentive Plan implemented in 2024.
Following the vote against the remuneration report at the 2025 AGM
the Company is taking independent legal advice in relation to
historical MIP payments in order to inform the steps it takes to
address the concerns of the Company’s stakeholders. The Company
intends to further develop a new remuneration framework in 2026
that appropriately aligns remuneration of the management and board
with the strategic objectives of the Company.
Provision 11
Provision 11 of the Code states “At least half the board, excluding the
chair, should be non-executive directors whom the board considers to
be independent.”.
At all times following the departure of Mr. Cox from the Board on 31
May 2024 and the appointment of Mr. Gladun as a director on 15
August 2024, less than half the Board excluding the chair, have been
non-executive directors whom the Board considers to be
Independent. The Board intends to recruit additional independent
directors.
Provision 12
Provision 12 of the Code states that “The board should appoint one of
the independent non-executive directors to be the senior
independent director to provide a sounding board for the chair and
serve as an intermediary for the other directors and shareholders. Led
by the senior independent director, the non-executive directors
should meet without the chair present at least annually to appraise
the chair’s performance, and on other occasions as necessary.”.
The Board has not to date appointed one of the independent non-
executive directors to act as the senior independent director, to
provide a sounding board for the chair and serve as an intermediary
for the other directors and shareholders. The Board believes that
there are currently effective arrangements in place for
communication between the chair and other directors and
shareholders without such appointment.
Compliance with the Code
On 31 May 2022, the Company’s listing category was transferred from “Premium Listing (commercial company)” to “Standard Listing (shares)”.
Following the FCA’s reforms implemented on 29 July 2024, the Company’s listing category is now Equity Shares (transition). The UK Financial
Reporting Council promotes high-quality corporate governance and reporting through the UK Corporate Governance Code published by the
Financial Reporting Council (FRC) in January 2024 (the “Code”) with which all companies with “Equity Shares (Commercial Companies)” listing on
the London Stock Exchange are required to either comply in full, or explain why, and to what extent, they do not comply. A copy of the Code is
available from the Financial Reporting Council’s website at www.frc.org.uk. The aim of the corporate governance report is to demonstrate how
the principles of the Code have been considered and applied by the Company. The Company intends to continue to comply with the Code or
explain any non-compliance as it would if it were in the “Equity Shares (Commercial Companies)” listing category. This statement should be read
in conjunction with the Corporate Governance section of this report as a whole. The headings on this page and the following page correspond to
the headings in the Code.
INTRODUCTION TO CORPORATE GOVERNANCE
65 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Provision 17
Provision 17 of the Code states “The board should establish a
nomination committee to lead the process for appointments, ensure
plans are in place for orderly succession to both the board and senior
management positions, and oversee the development of a diverse
pipeline for succession. A majority of members of the committee
should be independent non-executive directors. The chair of the
board should not chair the committee when it is dealing with the
appointment of their successor.”.
At all times following the departure of Mr. Cox from the Board on 31
May 2024, less than a majority of the members of the Nomination
and Governance Committee have been Independent Non-Executive
Directors. The Board intends to recruit additional independent non-
executive directors.
Provision 21
Provision 21 of the Code states “There should be a formal and
rigorous annual review of the performance of the board, its
committees, the chair and individual directors. The chair should
commission a regular externally facilitated board performance review.
In FTSE 350 companies this should happen at least every three years.
The external reviewer should be identified in the annual report and a
statement made about any other connection it has with the company
or individual directors.”.
No external evaluation of the Board or any of its committees took
place in 2025.
Provision 24
Provision 24 of the Code states “The board should establish an audit
committee of independent non-executive directors, with a minimum
membership of three, or in the case of smaller companies, two. The
chair of the board should not be a member. The board should satisfy
itself that at least one member has recent and relevant financial
experience. The committee as a whole shall have competence
relevant to the sector in which the company operates.”.
Following the departure of Mr. Cox on 31 May 2024, the Audit
Committee comprised two independent non-executive directors.
Following the departure of Mr. Hopkinson on 30 June 2025, the Audit
Committee comprised only its Chairwoman, Fiona Paulus. On 23
October 2025 Mr. Hart (an independent non-executive director) was
appointed to the Audit Committee. On 31 October 2025 the Chairman
of the Board, Nikolay Ivin, was appointed to the Audit Committee. Mr.
Ivin’s membership of the Audit Committee ended on 20 November
2025, when Mr. Wynne (a non-executive director who is not
independent) was appointed to the Audit Committee and on 14
February 2026, Mr. Wynne replaced Ms. Paulus as chair of the Audit
Committee after Ms. Paulus left the Board on 13 February 2026.
Provision 32
Provision 32 of the Code states “The board should establish a
remuneration committee of independent non-executive directors
with a minimum membership of three, or in the case of smaller
companies, two. In addition, the chair of the board can only be a
member if they were independent on appointment and cannot chair
the committee. Before appointment as chair of the remuneration
committee, the appointee should have served on a remuneration
committee for at least 12 months.”.
The Remuneration Committee includes two members, Martin
Gudgeon and Robert Wynne, who are not independent non-executive
directors. Mr. Gudgeon’s membership in the committee was an
agreed term of the Company’s 2023 debt restructuring. In addition,
Mr. Hart, the chair of the Remuneration Committee from 23 October
2025, has not previously served on a remuneration committee.
Provision 34
Provision 34 of the Code states that “Remuneration for all non-
executive directors should not include share options or other
performance-related elements”.
The Company’s shareholders in 2024 approved amendments to the
Directors’ Remuneration Policy to allow for adoption of the MIP and
for non-executive directors to participate in the MIP.
Following the vote against the remuneration report at the 2025 AGM
the Company is taking independent legal advice in relation to
historical MIP payments in order to inform the steps it takes to
address the concerns of the Company’s stakeholders. The Company
intends to further develop a new remuneration framework in 2026
that appropriately aligns remuneration of the management and board
with the strategic objectives of the Company.
Provision 36
Provision 36 of the Code states “Remuneration schemes should
promote long-term shareholdings by executive directors that support
alignment with long-term shareholder interests. In normal
circumstances, share awards granted for this purpose should be
released for sale on a phased basis and be subject to a total vesting
and holding period of five years or more. The remuneration
committee should develop a formal policy for post-employment
shareholding requirements encompassing both unvested and vested
shares.”.
The Company’s LTIP has a total holding and vesting period of no more
than three years and therefore does not comply with the
requirements of Code Provision 36, which requires share awards to be
released for sale on a phased basis and be subject to a total vesting
and holding period of five years or more. As explained in the press
release released by the Company on 28 August 2019, a copy of which
has also been published on the Public Register maintained by the
Investment Association, the Board and the Remuneration Committee
believe that the current provisions of the LTIP relating to the
performance period and vesting period are appropriate and aligned
with the interests of shareholders, so that modifying such provisions
of the LTIP at this time would not be the right course of action. The
full text of the announcement is available to read on the Company’s
website.
Provision 37
Provision 37 of the Code states that “Directors’ contracts and/or other
agreements or documents which cover director remuneration should
include malus and clawback provisions that would enable the
company to recover and/or withhold sums or share awards, and
specify the circumstances in which it would be appropriate to do so.”
Whilst the LTIP and the MIP do include malus and clawback
provisions, the Phantom Share Option Scheme and the Directors’
contracts do not. The Board intends to update executive service
agreements and non‑executive director appointment letters to ensure
full alignment with Provision 37.
65 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Provision 17
Provision 17 of the Code states “The board should establish a
nomination committee to lead the process for appointments, ensure
plans are in place for orderly succession to both the board and senior
management positions, and oversee the development of a diverse
pipeline for succession. A majority of members of the committee
should be independent non-executive directors. The chair of the
board should not chair the committee when it is dealing with the
appointment of their successor.”.
At all times following the departure of Mr. Cox from the Board on 31
May 2024, less than a majority of the members of the Nomination
and Governance Committee have been Independent Non-Executive
Directors. The Board intends to recruit additional independent non-
executive directors.
Provision 21
Provision 21 of the Code states “There should be a formal and
rigorous annual review of the performance of the board, its
committees, the chair and individual directors. The chair should
commission a regular externally facilitated board performance review.
In FTSE 350 companies this should happen at least every three years.
The external reviewer should be identified in the annual report and a
statement made about any other connection it has with the company
or individual directors.”.
No external evaluation of the Board or any of its committees took
place in 2025.
Provision 24
Provision 24 of the Code states “The board should establish an audit
committee of independent non-executive directors, with a minimum
membership of three, or in the case of smaller companies, two. The
chair of the board should not be a member. The board should satisfy
itself that at least one member has recent and relevant financial
experience. The committee as a whole shall have competence
relevant to the sector in which the company operates.”.
Following the departure of Mr. Cox on 31 May 2024, the Audit
Committee comprised two independent non-executive directors.
Following the departure of Mr. Hopkinson on 30 June 2025, the Audit
Committee comprised only its Chairwoman, Fiona Paulus. On 23
October 2025 Mr. Hart (an independent non-executive director) was
appointed to the Audit Committee. On 31 October 2025 the Chairman
of the Board, Nikolay Ivin, was appointed to the Audit Committee. Mr.
Ivin’s membership of the Audit Committee ended on 20 November
2025, when Mr. Wynne (a non-executive director who is not
independent) was appointed to the Audit Committee and on 14
February 2026, Mr. Wynne replaced Ms. Paulus as chair of the Audit
Committee after Ms. Paulus left the Board on 13 February 2026.
Provision 32
Provision 32 of the Code states “The board should establish a
remuneration committee of independent non-executive directors
with a minimum membership of three, or in the case of smaller
companies, two. In addition, the chair of the board can only be a
member if they were independent on appointment and cannot chair
the committee. Before appointment as chair of the remuneration
committee, the appointee should have served on a remuneration
committee for at least 12 months.”.
The Remuneration Committee includes two members, Martin
Gudgeon and Robert Wynne, who are not independent non-executive
directors. Mr. Gudgeon’s membership in the committee was an
agreed term of the Company’s 2023 debt restructuring. In addition,
Mr. Hart, the chair of the Remuneration Committee from 23 October
2025, has not previously served on a remuneration committee.
Provision 34
Provision 34 of the Code states that “Remuneration for all non-
executive directors should not include share options or other
performance-related elements”.
The Company’s shareholders in 2024 approved amendments to the
Directors’ Remuneration Policy to allow for adoption of the MIP and
for non-executive directors to participate in the MIP.
Following the vote against the remuneration report at the 2025 AGM
the Company is taking independent legal advice in relation to
historical MIP payments in order to inform the steps it takes to
address the concerns of the Company’s stakeholders. The Company
intends to further develop a new remuneration framework in 2026
that appropriately aligns remuneration of the management and board
with the strategic objectives of the Company.
Provision 36
Provision 36 of the Code states “Remuneration schemes should
promote long-term shareholdings by executive directors that support
alignment with long-term shareholder interests. In normal
circumstances, share awards granted for this purpose should be
released for sale on a phased basis and be subject to a total vesting
and holding period of five years or more. The remuneration
committee should develop a formal policy for post-employment
shareholding requirements encompassing both unvested and vested
shares.”.
The Company’s LTIP has a total holding and vesting period of no more
than three years and therefore does not comply with the
requirements of Code Provision 36, which requires share awards to be
released for sale on a phased basis and be subject to a total vesting
and holding period of five years or more. As explained in the press
release released by the Company on 28 August 2019, a copy of which
has also been published on the Public Register maintained by the
Investment Association, the Board and the Remuneration Committee
believe that the current provisions of the LTIP relating to the
performance period and vesting period are appropriate and aligned
with the interests of shareholders, so that modifying such provisions
of the LTIP at this time would not be the right course of action. The
full text of the announcement is available to read on the Company’s
website.
Provision 37
Provision 37 of the Code states that “Directors’ contracts and/or other
agreements or documents which cover director remuneration should
include malus and clawback provisions that would enable the
company to recover and/or withhold sums or share awards, and
specify the circumstances in which it would be appropriate to do so.”
Whilst the LTIP and the MIP do include malus and clawback
provisions, the Phantom Share Option Scheme and the Directors’
contracts do not. The Board intends to update executive service
agreements and non‑executive director appointment letters to ensure
full alignment with Provision 37.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
66
CORPORATE GOVERNANCE
BOARD OF DIRECTORS
Members of the Board of Directors
Nikolay Ivin
Chairman of the Board
Chairman of the Strategy
Committee
Member of the Remuneration
Committee
Member of the Nomination &
Governance Committee
Date of appointment: 15 July 2025
Other current appointments:
• Co-founder and Managing Partner of Ziff-Ivin Associates Ltd, a UK-based financial advisory and
management consulting practice.
• Since 2021, Mr. Ivin has also been serving as an independent supervisory board member of DTEK
Energy B.V., an integrated energy and mining group.
Skills and experience:
• Mr. Ivin has broad expertise in corporate finance across emerging markets. Mr. Ivin has worked on
financial advisory and restructuring assignments for international investors and companies all over
Central and Eastern Europe, as well as Cyprus, Iceland, Kazakhstan, the Netherlands and the UK.
Mr. Ivin's prior professional experience includes roles at Houlihan Lokey (Europe), Citigroup
Corporate and Investment Bank (EMEA) and GE Capital (USA).
Viktor Gladun
Chief Executive Officer
Member of the Strategy
Committee
Date of appointment: 15 August 2024
Other current appointments:
• Non-Executive Director of Bank Avangard JSC in Ukraine.
Skills and experience:
• Executive professional with extensive experience in the energy sector.
• CEO and executive director on the board of directors of JKX Oil and Gas plc, a UK headquartered
hydrocarbon exploration company, from 2019 through 2022, acting CEO of JKX during 2017-2018,
CEO of JKX’s Ukrainian subsidiary Poltava Petroleum Company JV from 2016-2022.
• Executive financial roles at DTEK & NIKO, a senior auditor position at TNK-BP and a tax consultant
position at Arthur Andersen.
Martin Gudgeon
Non-Executive Warrant
Director
Member of the Strategy
Committee
Member of the Nomination &
Governance Committee
Member of the Remuneration
Committee
Date of appointment: 14 February 2023
Other current appointments:
• Partner and Chairman of the EMEA & Asia Restructuring and Special Situations Group (“RSSG”) at
PJT Partners.
• Member of the firm’s RSSG Operating Committee.
Skills and experience:
• 35 years of industry experience.
• Senior Managing Director at Blackstone for eight years.
• Chief Executive and Head of Restructuring at Close Brothers Corporate Finance.
• Non-Executive Director at Genel Energy.
James Hart
Independent Non-executive
director
Chairman of the Remuneration
Committee
Member of the Audit
Committee
Date of appointment: 23 October 2025
Other current appointments:
• For nearly 10 years he has managed Hillmont Partners, the international law firm he founded,
which focuses on matters in Eastern Europe and Eurasia. He jointly oversees the fir’'s International
Dispute Resolution & Restructuring practices.
Skills and experience:
• Mr Hart is a special situations and dispute resolution professional.
• Mr Hart holds a BA from Durham University and an MBA from London Business School.
Robert Wynne
Non-executive director
Chairman of the Audit
Committee
Member of the Nomination &
Governance Committee
Member of the Remuneration
Committee
Member of the Strategy
Committee
Date of appointment: 20 November 2025
Other current appointments:
• He is currently a partner and director of RD Energy LLC, an energy advisory, consulting, investment
and operating company based in the USA and Canada, which indirectly holds 18.88% of the
Compan’'s ordinary shares.
Skills and experience:
• Mr Wynne is a senior level international oil executive with 40 years of global oil and gas industry
and investment banking experience.
• Mr Wynne holds a Bachelor of Science in Mechanical Engineering and a Master of Business
Administration (Finance and New Ventures) from the University of Alberta.
CORPORATE GOVERNANCE
BOARD OF DIRECTORS
Members of the Board of Directors
Nikolay Ivin
Chairman of the Board
Chairman of the Strategy
Committee
Member of the Remuneration
Committee
Member of the Nomination &
Governance Committee
Date of appointment: 15 July 2025
Other current appointments:
• Co-founder and Managing Partner of Ziff-Ivin Associates Ltd, a UK-based financial advisory and
management consulting practice.
• Since 2021, Mr. Ivin has also been serving as an independent supervisory board member of DTEK
Energy B.V., an integrated energy and mining group.
Skills and experience:
• Mr. Ivin has broad expertise in corporate finance across emerging markets. Mr. Ivin has worked on
financial advisory and restructuring assignments for international investors and companies all over
Central and Eastern Europe, as well as Cyprus, Iceland, Kazakhstan, the Netherlands and the UK.
Mr. Ivin's prior professional experience includes roles at Houlihan Lokey (Europe), Citigroup
Corporate and Investment Bank (EMEA) and GE Capital (USA).
Viktor Gladun
Chief Executive Officer
Member of the Strategy
Committee
Date of appointment: 15 August 2024
Other current appointments:
• Non-Executive Director of Bank Avangard JSC in Ukraine.
Skills and experience:
• Executive professional with extensive experience in the energy sector.
• CEO and executive director on the board of directors of JKX Oil and Gas plc, a UK headquartered
hydrocarbon exploration company, from 2019 through 2022, acting CEO of JKX during 2017-2018,
CEO of JKX’s Ukrainian subsidiary Poltava Petroleum Company JV from 2016-2022.
• Executive financial roles at DTEK & NIKO, a senior auditor position at TNK-BP and a tax consultant
position at Arthur Andersen.
Martin Gudgeon
Non-Executive Warrant
Director
Member of the Strategy
Committee
Member of the Nomination &
Governance Committee
Member of the Remuneration
Committee
Date of appointment: 14 February 2023
Other current appointments:
• Partner and Chairman of the EMEA & Asia Restructuring and Special Situations Group (“RSSG”) at
PJT Partners.
• Member of the firm’s RSSG Operating Committee.
Skills and experience:
• 35 years of industry experience.
• Senior Managing Director at Blackstone for eight years.
• Chief Executive and Head of Restructuring at Close Brothers Corporate Finance.
• Non-Executive Director at Genel Energy.
James Hart
Independent Non-executive
director
Chairman of the Remuneration
Committee
Member of the Audit
Committee
Date of appointment: 23 October 2025
Other current appointments:
• For nearly 10 years he has managed Hillmont Partners, the international law firm he founded,
which focuses on matters in Eastern Europe and Eurasia. He jointly oversees the fir’'s International
Dispute Resolution & Restructuring practices.
Skills and experience:
• Mr Hart is a special situations and dispute resolution professional.
• Mr Hart holds a BA from Durham University and an MBA from London Business School.
Robert Wynne
Non-executive director
Chairman of the Audit
Committee
Member of the Nomination &
Governance Committee
Member of the Remuneration
Committee
Member of the Strategy
Committee
Date of appointment: 20 November 2025
Other current appointments:
• He is currently a partner and director of RD Energy LLC, an energy advisory, consulting, investment
and operating company based in the USA and Canada, which indirectly holds 18.88% of the
Compan’'s ordinary shares.
Skills and experience:
• Mr Wynne is a senior level international oil executive with 40 years of global oil and gas industry
and investment banking experience.
• Mr Wynne holds a Bachelor of Science in Mechanical Engineering and a Master of Business
Administration (Finance and New Ventures) from the University of Alberta.
BOARD OF DIRECTORS
67 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Former Members of the Board of Directors
Stephen Whyte
Chairman and Non-Executive
Director
Term of service: 14 February 2023 to 16 October 2025
Other current appointments :
• None.
Skills and experience:
• 35 years of total industry experience at Shell, BG and Galp.
• Seasoned FTSE and AIM Chairman and Non-Executive Director in the global energy sector with
direct experience in Kazakhstan.
• Chairman at Genel Energy (2017-2019).
• Chairman at Sound Energy.
• Non-Executive Director at Echo Energy.
• Non-Executive Director at JSC National Company KazMunaiGas.
Chris Hopkinson
Independent Non-Executive
Director
Term of service: 14 February 2023 to 30 June 2025
Other current appointments:
• Non-executive Chairman of Enwell Energy.
• Interim Executive Chairman of IGas Energy.
• Founder of Astra Resources Management and Antelopus Energy.
Skills and experience:
• 35 years of experience in the global oil and gas and energy sectors.
• Technical and management roles with Yukos and Lukoil Overseas.
• Chief Executive Officer of Imperial Energy Group.
• Vice-President Western Siberia for TNK-BP.
• Senior Vice-President North Africa for BG Group.
• Chief Executive Officer of International Petroleum Limited.
• Chief Operating Officer for JSC National Company KazMunaiGas.
Arfan Khan
Chief Executive Officer
Term of service: 26 January 2021 to 30 June 2025
Other current appointments:
• None.
Skills and experience:
• 35 years of total industry experience.
• From January 2020 until joining the Company, President of Stratum Energy Group (Romania).
• From April 2014 to December 2019, COO of Amni International Petroleum (Nigeria).
• From April 2012 to March 2014, Petroleum Engineering Director at Maersk Oil (Angola).
• From August 2002 to March 2012, Chief Production Engineer at Shell (Nigeria & Kazakhstan).
• Pre-2002: 12 years with ExxonMobil Gulf-of-Mexico Reservoir Development (US).
• Member of the Society of Petroleum Engineers.
• Holds a Bachelor of Science degree from Texas A&M University and an MBA from Tulane
University.
Fiona Paulus
Independent Non-executive
director
Term of service: 14 February 2023 to 13 February 2026
Other current appointments:
• Senior Adviser in the Metals & Mining business at Gleacher Shacklock LLP.
• Non-Executive Director at Interpipe Group and JSW Steel Limited.
Skills and experience:
• 37 years of investment banking experience.
• She has held senior roles at leading international investment banks. These include Head of
International Investment Banking at CIBC, EMEA Head of Private Equity & Infrastructure Funds at
Royal Bank of Scotland, Global Head of Energy and Resources at ABN AMRO Bank, and various
senior roles at Societe Generale, JPMorgan & Citigroup in the UK, Europe, Australia, and Latin
America.
67 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Former Members of the Board of Directors
Stephen Whyte
Chairman and Non-Executive
Director
Term of service: 14 February 2023 to 16 October 2025
Other current appointments :
• None.
Skills and experience:
• 35 years of total industry experience at Shell, BG and Galp.
• Seasoned FTSE and AIM Chairman and Non-Executive Director in the global energy sector with
direct experience in Kazakhstan.
• Chairman at Genel Energy (2017-2019).
• Chairman at Sound Energy.
• Non-Executive Director at Echo Energy.
• Non-Executive Director at JSC National Company KazMunaiGas.
Chris Hopkinson
Independent Non-Executive
Director
Term of service: 14 February 2023 to 30 June 2025
Other current appointments:
• Non-executive Chairman of Enwell Energy.
• Interim Executive Chairman of IGas Energy.
• Founder of Astra Resources Management and Antelopus Energy.
Skills and experience:
• 35 years of experience in the global oil and gas and energy sectors.
• Technical and management roles with Yukos and Lukoil Overseas.
• Chief Executive Officer of Imperial Energy Group.
• Vice-President Western Siberia for TNK-BP.
• Senior Vice-President North Africa for BG Group.
• Chief Executive Officer of International Petroleum Limited.
• Chief Operating Officer for JSC National Company KazMunaiGas.
Arfan Khan
Chief Executive Officer
Term of service: 26 January 2021 to 30 June 2025
Other current appointments:
• None.
Skills and experience:
• 35 years of total industry experience.
• From January 2020 until joining the Company, President of Stratum Energy Group (Romania).
• From April 2014 to December 2019, COO of Amni International Petroleum (Nigeria).
• From April 2012 to March 2014, Petroleum Engineering Director at Maersk Oil (Angola).
• From August 2002 to March 2012, Chief Production Engineer at Shell (Nigeria & Kazakhstan).
• Pre-2002: 12 years with ExxonMobil Gulf-of-Mexico Reservoir Development (US).
• Member of the Society of Petroleum Engineers.
• Holds a Bachelor of Science degree from Texas A&M University and an MBA from Tulane
University.
Fiona Paulus
Independent Non-executive
director
Term of service: 14 February 2023 to 13 February 2026
Other current appointments:
• Senior Adviser in the Metals & Mining business at Gleacher Shacklock LLP.
• Non-Executive Director at Interpipe Group and JSW Steel Limited.
Skills and experience:
• 37 years of investment banking experience.
• She has held senior roles at leading international investment banks. These include Head of
International Investment Banking at CIBC, EMEA Head of Private Equity & Infrastructure Funds at
Royal Bank of Scotland, Global Head of Energy and Resources at ABN AMRO Bank, and various
senior roles at Societe Generale, JPMorgan & Citigroup in the UK, Europe, Australia, and Latin
America.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
68
CORPORATE GOVERNANCE
BOARD OF DIRECTORS
Board activities and achievements during 2025
During the financial year, the Board held 16 meetings. The Board and
Committee agendas were shaped to ensure that discussion was
focused on the Group’s key strategies and monitoring activities, as
well as reviews of significant issues arising during the year. The
Group’s ongoing financial and strategic performance is reviewed at
every meeting, and the Chief Executive Officer and the Chief Financial
Officer comment on production, share price performance, the market
and shareholder feedback.
The table below gives the highlights of how the Board and its
committees spent their time during the 2025 financial year but should
not be regarded as an exhaustive list. More information regarding the
Group’s strategic objectives and focus during 2025 can be found in the
Strategic Report on pages 1-62 and the more detailed activities of
each Board committee are located in their relevant report.
Strategy and business focus
• Discussions around the strategic options available to the Group to
monetise the infrastructure through processing third-party volumes
and acquisition of nearby, stranded assets such as Stepnoy Leopard
• Approved a targeted well workover and intervention programme
Risk
• Review of all interim financial results announcements and the 2024
Annual Report and Accounts.
• Consideration of the Group’s going concern assessment, viability
statement and risk appetite for the coming year.
• Reviewed the Group’s liquidity forecast at each board meeting
Governance
• Received reports from Board committees.
• Consideration of the UK Corporate Governance Code and other
regulatory requirements for the Annual Report.
• Review of the Notice of AGM and matters proposed for shareholder
approval.
• Reviewed and approved new and updated Group policies.
People and culture
• Performance assessment.
• Individual KPIs.
Board evaluation
No board self-evaluation was carried out in 2025.
Director induction and training
Each individual joining the Board receives a full, formal induction
package with materials on the Group’s business and operational,
financial and legal matters. They also meet with members of the
Board in order to obtain a good understanding of the challenges and
opportunities faced by the Group. The Directors are given the
opportunity to discuss their training and professional development
needs at every Board meeting and on an ad-hoc basis as required, and
to make recommendations to the Chairman regarding topics on which
they would like to receive training. In addition to training organised by
the Company, the Directors regularly attend training events organised
by third parties and the Company actively encourages Directors to
attend such events.
Attendance at meetings of the Board and its Committees in 2025
The following table illustrates the attendance of Directors at Board and committee meetings (as relevant) throughout the year.
A = Total number of meetings the Director was eligible to attend.
B = Total number of meetings the Director did attend.
Board Audit Committee Remuneration
Committee
Nomination and
Governance
Committee
Strategy Committee
A B A B A B A B A B
Executive Directors
Arfan Khan 8 7
Viktor Gladun 8 8
Non-Executive
Directors
Stephen Whyte 11 11
Chris Hopkinson 8 8 1 1 3 3
Martin Gudgeon 16 16 3 3
Fiona Paulus 16 16 3 3 3 3
Viktor Gladun 8 7
Nikolay Ivin 7 7 1 1
James Hart 3 3 2 2
Robert Wynne 2 2 1 1
CORPORATE GOVERNANCE
BOARD OF DIRECTORS
Board activities and achievements during 2025
During the financial year, the Board held 16 meetings. The Board and
Committee agendas were shaped to ensure that discussion was
focused on the Group’s key strategies and monitoring activities, as
well as reviews of significant issues arising during the year. The
Group’s ongoing financial and strategic performance is reviewed at
every meeting, and the Chief Executive Officer and the Chief Financial
Officer comment on production, share price performance, the market
and shareholder feedback.
The table below gives the highlights of how the Board and its
committees spent their time during the 2025 financial year but should
not be regarded as an exhaustive list. More information regarding the
Group’s strategic objectives and focus during 2025 can be found in the
Strategic Report on pages 1-62 and the more detailed activities of
each Board committee are located in their relevant report.
Strategy and business focus
• Discussions around the strategic options available to the Group to
monetise the infrastructure through processing third-party volumes
and acquisition of nearby, stranded assets such as Stepnoy Leopard
• Approved a targeted well workover and intervention programme
Risk
• Review of all interim financial results announcements and the 2024
Annual Report and Accounts.
• Consideration of the Group’s going concern assessment, viability
statement and risk appetite for the coming year.
• Reviewed the Group’s liquidity forecast at each board meeting
Governance
• Received reports from Board committees.
• Consideration of the UK Corporate Governance Code and other
regulatory requirements for the Annual Report.
• Review of the Notice of AGM and matters proposed for shareholder
approval.
• Reviewed and approved new and updated Group policies.
People and culture
• Performance assessment.
• Individual KPIs.
Board evaluation
No board self-evaluation was carried out in 2025.
Director induction and training
Each individual joining the Board receives a full, formal induction
package with materials on the Group’s business and operational,
financial and legal matters. They also meet with members of the
Board in order to obtain a good understanding of the challenges and
opportunities faced by the Group. The Directors are given the
opportunity to discuss their training and professional development
needs at every Board meeting and on an ad-hoc basis as required, and
to make recommendations to the Chairman regarding topics on which
they would like to receive training. In addition to training organised by
the Company, the Directors regularly attend training events organised
by third parties and the Company actively encourages Directors to
attend such events.
Attendance at meetings of the Board and its Committees in 2025
The following table illustrates the attendance of Directors at Board and committee meetings (as relevant) throughout the year.
A = Total number of meetings the Director was eligible to attend.
B = Total number of meetings the Director did attend.
Board Audit Committee Remuneration
Committee
Nomination and
Governance
Committee
Strategy Committee
A B A B A B A B A B
Executive Directors
Arfan Khan 8 7
Viktor Gladun 8 8
Non-Executive
Directors
Stephen Whyte 11 11
Chris Hopkinson 8 8 1 1 3 3
Martin Gudgeon 16 16 3 3
Fiona Paulus 16 16 3 3 3 3
Viktor Gladun 8 7
Nikolay Ivin 7 7 1 1
James Hart 3 3 2 2
Robert Wynne 2 2 1 1
BOARD OF DIRECTORS
69 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
The key responsibilities of the Strategy Committee during
2025 were to:
• Assess the corporate and strategic performance of the Company and
its subsidiaries (the “Group”) in its broadest sense, and forming a wide
view on the adequacy of progress made in achieving strategic
objectives and outcomes, and of the systems to measure, monitor and
deliver on them;
• Support the Board and Senior Management in formulating the overall
strategy for the Company, with particular emphasis on horizon
scanning, priorities, activities and outcomes;
• Consider the strategic development opportunities for the Group,
including by way of acquisitions, disposals, joint ventures, commercial
co-operations or otherwise;
• Consider options for shareholder investment or exit.
More details on key responsibilities can be found in the Committee’s
terms of reference, which are available on the Group’s website at
www.nog.co.uk. The terms of reference of the Committee were
approved at a meeting of the Board on 20 November 2025.
Membership from 24 February 2023
Name Membership start date Membership end date
Stephen Whyte
(Committee Chair from
24 February 2023)
24 February 2023 16 October 2025
Martin Gudgeon 24 February 2023
Arfan Khan 24 February 2023 30 June 2025
Nikolay Ivin 23 October 2025
Viktor Gladun 23 October 2025
Robert Wynne 20 November 2025
Committee meetings
There were no separate meetings of the Strategy Committee during
2025. As a separate agenda item, the Committee reports to the
Board at each Board meeting on any activities of the Committee since
the last Board meeting.
Only members of the Committee have the right to attend Committee
meetings.
However, other individuals may be invited to attend all or part of any
meeting, as and when appropriate.
69 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
The key responsibilities of the Strategy Committee during
2025 were to:
• Assess the corporate and strategic performance of the Company and
its subsidiaries (the “Group”) in its broadest sense, and forming a wide
view on the adequacy of progress made in achieving strategic
objectives and outcomes, and of the systems to measure, monitor and
deliver on them;
• Support the Board and Senior Management in formulating the overall
strategy for the Company, with particular emphasis on horizon
scanning, priorities, activities and outcomes;
• Consider the strategic development opportunities for the Group,
including by way of acquisitions, disposals, joint ventures, commercial
co-operations or otherwise;
• Consider options for shareholder investment or exit.
More details on key responsibilities can be found in the Committee’s
terms of reference, which are available on the Group’s website at
www.nog.co.uk. The terms of reference of the Committee were
approved at a meeting of the Board on 20 November 2025.
Membership from 24 February 2023
Name Membership start date Membership end date
Stephen Whyte
(Committee Chair from
24 February 2023)
24 February 2023 16 October 2025
Martin Gudgeon 24 February 2023
Arfan Khan 24 February 2023 30 June 2025
Nikolay Ivin 23 October 2025
Viktor Gladun 23 October 2025
Robert Wynne 20 November 2025
Committee meetings
There were no separate meetings of the Strategy Committee during
2025. As a separate agenda item, the Committee reports to the
Board at each Board meeting on any activities of the Committee since
the last Board meeting.
Only members of the Committee have the right to attend Committee
meetings.
However, other individuals may be invited to attend all or part of any
meeting, as and when appropriate.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
70
CORPORATE GOVERNANCE
SENIOR MANAGEMENT TEAM
Viktor Gladun
Chief Executive Officer
See biography of Viktor Gladun on page 66.
Elena Zhuravleva
Chief Financial Officer
Skills and experience:
• Appointed as Chief Financial Officer of the Nostrum Group on 19 September 2025.
• She has a vast experience of advising and managing finance and other functions in the FSU.
• Prior to joining Nostrum, Ms Zhuravleva worked at EBRD as a business advisor, Skolkovo Consulting as
an Executive Partner, Nezavisimost as CFO and then CEO, the Niko group of companies as CFO, TNK-BP
as Head of Internal Audit and at AES Corporation as Regional Financial Controller and SAP ERP Project
Director.
• Elena is an FCCA and a graduate of INSEAD and Northwestern University Kellogg School of
Management.
David Roberts
Chief Operating Officer
Skills and experience:
• Appointed as Chief Operating Officer of the Group on 16 September 2025.
• David Roberts is a seasoned international oil and gas executive with over 30 years of operational,
technical, and leadership experience across Africa, Central Asia, and North America. He joined Nostrum
Oil & Gas in 2025 as Chief Operating Officer, bringing a deep understanding of petroleum engineering
and field operations, combined with strategic and commercial acumen.
• Prior to joining Nostrum, Mr. Roberts advised and assisted institutional investors and private energy
companies through RD Energy LLC, a firm he co-founded, on a range of transactions and operational
assignments, including asset evaluations, restructuring and workouts, as well as structured financing.
• Mr. Roberts served as Vice President Operations and Managing Director of PanAfrican Energy
(Tanzania) Limited, a subsidiary of Orca Exploration Group Inc., where he was instrumental in restoring
stakeholder confidence and operational integrity during a period of significant regulatory and
commercial challenges. Earlier in his career, he held senior operational and country management roles
with Perenco, Pan-Ocean Energy Corporation and Addax Petroleum in Gabon, where he led major
development and infrastructure projects that underpinned substantial increases in production and
company value.
• He holds a B.Sc. in Petroleum Engineering from the Colorado School of Mines and is fluent in English
and French.
Thomas Hartnett
Chief Legal Officer &
Company Secretary and
Acting Head of Human
Resources
Skills and experience:
• Appointed as General Counsel of the Nostrum Group on 5 September 2008, as Company Secretary of
Nostrum Oil & Gas PLC on 3 October 2013 and as Acting Head of Human Resources on 13 January
2020.
• More than 30 years of post-qualification experience, including 16 years with the law firm White & Case
LLP, where he was a Partner and specialised in cross- border corporate and M&A transactions based in
the firm’s New York, Istanbul, London, Brussels and Bangkok offices.
• Served as Senior Corporate Counsel in the EMEA headquarters of Intercontinental Hotels Group from
1996-1998.
• Holds a Bachelor of Arts degree in Comparative and Developmental Politics from the University of
Pennsylvania and a Juris Doctor degree from New York University School of Law.
• Member of the New York Bar and the Association of International Energy Negotiators.
Ulugbek Makhmadiyarov
Deputy CFO
Skills and experience:
• Group Finance Director since 1 December 2023.
• Chartered accountant with over 20 years of experience in auditing and finance.
• Ulugbek held various roles at Nostrum since 2014, including leading roles within finance team as well as
internal audit and risk management.
• Prior to joining Nostrum, for nine years he worked for Ernst & Young in Uzbekistan and Kazakhstan,
auditing and managing audits of large international companies including listed entities.
• Holds Master’s and Bachelor’s Degrees from the University of World Economy and Diplomacy.
• Fellow member of ACCA (since 2014) and held a Certified Internal Auditor designation (during 2015-
2023).
CORPORATE GOVERNANCE
SENIOR MANAGEMENT TEAM
Viktor Gladun
Chief Executive Officer
See biography of Viktor Gladun on page 66.
Elena Zhuravleva
Chief Financial Officer
Skills and experience:
• Appointed as Chief Financial Officer of the Nostrum Group on 19 September 2025.
• She has a vast experience of advising and managing finance and other functions in the FSU.
• Prior to joining Nostrum, Ms Zhuravleva worked at EBRD as a business advisor, Skolkovo Consulting as
an Executive Partner, Nezavisimost as CFO and then CEO, the Niko group of companies as CFO, TNK-BP
as Head of Internal Audit and at AES Corporation as Regional Financial Controller and SAP ERP Project
Director.
• Elena is an FCCA and a graduate of INSEAD and Northwestern University Kellogg School of
Management.
David Roberts
Chief Operating Officer
Skills and experience:
• Appointed as Chief Operating Officer of the Group on 16 September 2025.
• David Roberts is a seasoned international oil and gas executive with over 30 years of operational,
technical, and leadership experience across Africa, Central Asia, and North America. He joined Nostrum
Oil & Gas in 2025 as Chief Operating Officer, bringing a deep understanding of petroleum engineering
and field operations, combined with strategic and commercial acumen.
• Prior to joining Nostrum, Mr. Roberts advised and assisted institutional investors and private energy
companies through RD Energy LLC, a firm he co-founded, on a range of transactions and operational
assignments, including asset evaluations, restructuring and workouts, as well as structured financing.
• Mr. Roberts served as Vice President Operations and Managing Director of PanAfrican Energy
(Tanzania) Limited, a subsidiary of Orca Exploration Group Inc., where he was instrumental in restoring
stakeholder confidence and operational integrity during a period of significant regulatory and
commercial challenges. Earlier in his career, he held senior operational and country management roles
with Perenco, Pan-Ocean Energy Corporation and Addax Petroleum in Gabon, where he led major
development and infrastructure projects that underpinned substantial increases in production and
company value.
• He holds a B.Sc. in Petroleum Engineering from the Colorado School of Mines and is fluent in English
and French.
Thomas Hartnett
Chief Legal Officer &
Company Secretary and
Acting Head of Human
Resources
Skills and experience:
• Appointed as General Counsel of the Nostrum Group on 5 September 2008, as Company Secretary of
Nostrum Oil & Gas PLC on 3 October 2013 and as Acting Head of Human Resources on 13 January
2020.
• More than 30 years of post-qualification experience, including 16 years with the law firm White & Case
LLP, where he was a Partner and specialised in cross- border corporate and M&A transactions based in
the firm’s New York, Istanbul, London, Brussels and Bangkok offices.
• Served as Senior Corporate Counsel in the EMEA headquarters of Intercontinental Hotels Group from
1996-1998.
• Holds a Bachelor of Arts degree in Comparative and Developmental Politics from the University of
Pennsylvania and a Juris Doctor degree from New York University School of Law.
• Member of the New York Bar and the Association of International Energy Negotiators.
Ulugbek Makhmadiyarov
Deputy CFO
Skills and experience:
• Group Finance Director since 1 December 2023.
• Chartered accountant with over 20 years of experience in auditing and finance.
• Ulugbek held various roles at Nostrum since 2014, including leading roles within finance team as well as
internal audit and risk management.
• Prior to joining Nostrum, for nine years he worked for Ernst & Young in Uzbekistan and Kazakhstan,
auditing and managing audits of large international companies including listed entities.
• Holds Master’s and Bachelor’s Degrees from the University of World Economy and Diplomacy.
• Fellow member of ACCA (since 2014) and held a Certified Internal Auditor designation (during 2015-
2023).
SENIOR MANAGEMENT TEAM
71 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Melody Pinet
Head of HR outside the
RoK
Skills and experience:
• Appointed as Nostrum’s Head of HR outside the RoK in May 2018.
• 2016-2018 HR Manager at Bee Engineering in Belgium.
• 2015-2016 HR consultant at Tempo-Team’ Randstad company in Belgium.
• 2013-2014 Fieldworker at Terres Rouges in Senegal.
• Holds two Bachelor’s degrees from the Université catholique de Louvain (one in Political Science and
Government and one in Psychology).
• Holds Master’s degree from the Université catholique de Louvain in International relations and the
management of diplomatic conflicts.
Gulnara Shadeyeva
Head of HR in the RoK
Skills and experience:
• Appointed as Head of HR of Zhaikmunai LLP in October 2013.
• 23 years of experience in the oil and gas industry in several senior positions in Human Resources in
KIOS, Baker Hughes Services Inc., AMEC, Exterran, Bolashak- Atyrau.
• Holds Bachelor’s degrees in Automatics Engineering from the Gubkin Russian State University of Oil &
Gas (Moscow), in Accounting from the West Kazakhstan State University and Master’s degrees in
Human Resources Management from the RANEPA (Moscow) and in International Human Resource
Management from Kingston University in the UK.
Askhat Seitkazin
General Director of
Zhaikmunai LLP
Skills and experience:
• Appointed as General Director of Zhaikmunai LLP on 14 November 2024.
• Appointed as Deputy General Director of Zhaikmunai LLP in March 2022.
• 2013-2015 held position of PR manager at Zhaikmunai LLP.
• 2015-2022 Head of PR department Zhaikmunai LLP.
• Graduate of the Institute of International Law&Economics (Moscow) with a specialisation in Financial
and Enterprise Management.
Zhomart Darkeyev
Adviser to the CEO
Skills and experience:
• Appointed as General Director of Zhaikmunai LLP on 14 November 2016.
• At Zhaikmunai LLP, Mr Darkeyev has also held the positions of Administrative Director, Assistant
General Director, Chief Administrative Manager, Engineer Manager and Deputy General Manager.
• Before Zhaikmunai LLP, Mr Darkeyev worked for Derkl Oil & Gas drilling as assistant driller and for
Kazakhgas State Holding Company as a leading reservoir engineer.
• Graduate of Furmanov Secondary School with further education completed at the Ivano-Frankivsk
Institute of Oil & Gas with a specialisation in drilling of oil and gas wells.
Daulet Tulegenov
Group Head of QHSE
Skills and experience:
• Appointed as Group head of QHSE in October 2018.
• 2017-2018 HSE Transformation team leader at KazMunaiGas JSC.
• 2010-2016 HSE manager at Lukoil.
• 2009-2010 Senior HSE expert at KazMunaiTeniz JSC.
• 2006-2009 Senior HSE specialist at LUKOIL.
• 2003-2006 Safety specialist at Tengizchevroil.
• Over 20 years’ experience in E&P oil and gas assets (onshore and offshore).
• Took part in major international projects at Chevron, Shell, Lukoil, Tengizchevroil and CNPC companies
in Kazakhstan.
• Graduate of the Tyumen State Oil & Gas University, Russian Federation.
71 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Melody Pinet
Head of HR outside the
RoK
Skills and experience:
• Appointed as Nostrum’s Head of HR outside the RoK in May 2018.
• 2016-2018 HR Manager at Bee Engineering in Belgium.
• 2015-2016 HR consultant at Tempo-Team’ Randstad company in Belgium.
• 2013-2014 Fieldworker at Terres Rouges in Senegal.
• Holds two Bachelor’s degrees from the Université catholique de Louvain (one in Political Science and
Government and one in Psychology).
• Holds Master’s degree from the Université catholique de Louvain in International relations and the
management of diplomatic conflicts.
Gulnara Shadeyeva
Head of HR in the RoK
Skills and experience:
• Appointed as Head of HR of Zhaikmunai LLP in October 2013.
• 23 years of experience in the oil and gas industry in several senior positions in Human Resources in
KIOS, Baker Hughes Services Inc., AMEC, Exterran, Bolashak- Atyrau.
• Holds Bachelor’s degrees in Automatics Engineering from the Gubkin Russian State University of Oil &
Gas (Moscow), in Accounting from the West Kazakhstan State University and Master’s degrees in
Human Resources Management from the RANEPA (Moscow) and in International Human Resource
Management from Kingston University in the UK.
Askhat Seitkazin
General Director of
Zhaikmunai LLP
Skills and experience:
• Appointed as General Director of Zhaikmunai LLP on 14 November 2024.
• Appointed as Deputy General Director of Zhaikmunai LLP in March 2022.
• 2013-2015 held position of PR manager at Zhaikmunai LLP.
• 2015-2022 Head of PR department Zhaikmunai LLP.
• Graduate of the Institute of International Law&Economics (Moscow) with a specialisation in Financial
and Enterprise Management.
Zhomart Darkeyev
Adviser to the CEO
Skills and experience:
• Appointed as General Director of Zhaikmunai LLP on 14 November 2016.
• At Zhaikmunai LLP, Mr Darkeyev has also held the positions of Administrative Director, Assistant
General Director, Chief Administrative Manager, Engineer Manager and Deputy General Manager.
• Before Zhaikmunai LLP, Mr Darkeyev worked for Derkl Oil & Gas drilling as assistant driller and for
Kazakhgas State Holding Company as a leading reservoir engineer.
• Graduate of Furmanov Secondary School with further education completed at the Ivano-Frankivsk
Institute of Oil & Gas with a specialisation in drilling of oil and gas wells.
Daulet Tulegenov
Group Head of QHSE
Skills and experience:
• Appointed as Group head of QHSE in October 2018.
• 2017-2018 HSE Transformation team leader at KazMunaiGas JSC.
• 2010-2016 HSE manager at Lukoil.
• 2009-2010 Senior HSE expert at KazMunaiTeniz JSC.
• 2006-2009 Senior HSE specialist at LUKOIL.
• 2003-2006 Safety specialist at Tengizchevroil.
• Over 20 years’ experience in E&P oil and gas assets (onshore and offshore).
• Took part in major international projects at Chevron, Shell, Lukoil, Tengizchevroil and CNPC companies
in Kazakhstan.
• Graduate of the Tyumen State Oil & Gas University, Russian Federation.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
72
CORPORATE GOVERNANCE
GOVERNANCE FRAMEWORK
Our governance framework as at 31 December 2025
The Board
The Board is chaired by Nikolay Ivin as from 16 October 2025. The Board is collectively responsible to stakeholders for the long-term success
of the Group. This is achieved by reviewing trading performance, budgets and funding, setting and monitoring the Group’s strategic
objectives, reviewing acquisition opportunities and engaging with stakeholders. The Board is supported by a number of committees whose
terms of reference (TORs) are available on our website.
Chairman
Responsible for leadership of
the Board and for ensuring its
effectiveness in all aspects of its
role.
Chief Executive Officer
Responsible for the successful
planning and execution of the
objectives and strategies agreed
by the Board.
Independent Non-Executive
Directors 10
Responsible for bringing an
external perspective, sound
judgement and objectivity to
the Board’s decision-making.
Scrutinise management
performance and constructively
challenge strategy.
Non-Executive Warrant
Director
Responsible for giving or
withholding approval to certain
matters set out in the warrant
instrument.
Audit Committee
Responsible for oversight
of the Group’s financial
reporting processes.
Scrutinises the work of
the external auditor and
regularly reviews the risk
management framework
and the work of internal
audit.
Nomination and
Governance Committee
Governance Committee
Reviews the structure,
size and composition of
the Board and its
committees and makes
recommendations to the
Board accordingly, and
leads the process for
new Board
appointments.
Remuneration
Committee
Reviews and
recommends to the
Board the executive
Remuneration Policy and
determines the
remuneration packages
of the Directors.
Strategy Committee
Assists the Board to fulfil
its responsibilities in
relation to strategy.
Company Secretory
Responsible for advising
the Board, through the
Chairman, on all
governance matters and
for ensuring that Board
procedures are complied
with and there is a good
flow of information
between the Board and
its committees.
The appointment of the
Company Secretary is a
matter reserved to the
Board as a whole.
Chairman:
Robert Wynne 11
See page 79 for
Committee Report
Chairman:
Robert Wynne
See page 80 for
Committee Report
Chairman:
James Hart
See page 81 for
Committee Report
Chairman:
Nikolay Ivin
Company Secretory:
Thomas Hartnett
Senior Management Team
The Senior management team supports the Chief Executive Officer in making important decisions regarding the overall management of the
Group in respect of all Group matters that are not reserved for the Board and in ensuring that operational activities and performance are
aligned with the overarching strategy of the Group. Each member of the team reports directly to the Chief Executive Officer, who then
directly reports to the Board. The functional responsibilities of the senior management team members in their respective areas include but
are not limited to implementing Chief Executive Officer and Board decisions, allocating resources, managing risk, maximising efficiencies,
guiding and developing employees, reviewing performance and supporting cross-functional integration.
Finance and human resources
Responsible for supporting the Group and the Board in matters
relating to: (a) corporate finance, (b) investor relations, (c)
economic analysis, (d) public relations, (e) external communications,
(f) accounting and reporting (including without limitation ESG
reporting), (g) tax, (h) budget and control, (i) insurance, (j) treasury
and cash management, (k) liaison with internal audit, (l) risk
management, (m) information and communications technology, (n)
company administration (accounting and tax matters), (o) capital
markets analysis, (p) procurement, (q) human resources, (r)
personnel, (s) training and (t) the provision of services related to the
workforce.
Operations
Responsible for supporting the Group and the Board in matters
relating to: (a) general management of the production site, (b)
production engineering and reservoir management, (c) drilling and
workover management, (d) production, (e) engineering and
construction, (f) field operations, (g) relations with governmental
authorities, (h) security and (i) administration.
10 Since 24 February 2023, no Director has been appointed as Senior Independent Director
11 Until 14 February 2026 the Audit Committee was chaired by Fiona Paulus.
CORPORATE GOVERNANCE
GOVERNANCE FRAMEWORK
Our governance framework as at 31 December 2025
The Board
The Board is chaired by Nikolay Ivin as from 16 October 2025. The Board is collectively responsible to stakeholders for the long-term success
of the Group. This is achieved by reviewing trading performance, budgets and funding, setting and monitoring the Group’s strategic
objectives, reviewing acquisition opportunities and engaging with stakeholders. The Board is supported by a number of committees whose
terms of reference (TORs) are available on our website.
Chairman
Responsible for leadership of
the Board and for ensuring its
effectiveness in all aspects of its
role.
Chief Executive Officer
Responsible for the successful
planning and execution of the
objectives and strategies agreed
by the Board.
Independent Non-Executive
Directors 10
Responsible for bringing an
external perspective, sound
judgement and objectivity to
the Board’s decision-making.
Scrutinise management
performance and constructively
challenge strategy.
Non-Executive Warrant
Director
Responsible for giving or
withholding approval to certain
matters set out in the warrant
instrument.
Audit Committee
Responsible for oversight
of the Group’s financial
reporting processes.
Scrutinises the work of
the external auditor and
regularly reviews the risk
management framework
and the work of internal
audit.
Nomination and
Governance Committee
Governance Committee
Reviews the structure,
size and composition of
the Board and its
committees and makes
recommendations to the
Board accordingly, and
leads the process for
new Board
appointments.
Remuneration
Committee
Reviews and
recommends to the
Board the executive
Remuneration Policy and
determines the
remuneration packages
of the Directors.
Strategy Committee
Assists the Board to fulfil
its responsibilities in
relation to strategy.
Company Secretory
Responsible for advising
the Board, through the
Chairman, on all
governance matters and
for ensuring that Board
procedures are complied
with and there is a good
flow of information
between the Board and
its committees.
The appointment of the
Company Secretary is a
matter reserved to the
Board as a whole.
Chairman:
Robert Wynne 11
See page 79 for
Committee Report
Chairman:
Robert Wynne
See page 80 for
Committee Report
Chairman:
James Hart
See page 81 for
Committee Report
Chairman:
Nikolay Ivin
Company Secretory:
Thomas Hartnett
Senior Management Team
The Senior management team supports the Chief Executive Officer in making important decisions regarding the overall management of the
Group in respect of all Group matters that are not reserved for the Board and in ensuring that operational activities and performance are
aligned with the overarching strategy of the Group. Each member of the team reports directly to the Chief Executive Officer, who then
directly reports to the Board. The functional responsibilities of the senior management team members in their respective areas include but
are not limited to implementing Chief Executive Officer and Board decisions, allocating resources, managing risk, maximising efficiencies,
guiding and developing employees, reviewing performance and supporting cross-functional integration.
Finance and human resources
Responsible for supporting the Group and the Board in matters
relating to: (a) corporate finance, (b) investor relations, (c)
economic analysis, (d) public relations, (e) external communications,
(f) accounting and reporting (including without limitation ESG
reporting), (g) tax, (h) budget and control, (i) insurance, (j) treasury
and cash management, (k) liaison with internal audit, (l) risk
management, (m) information and communications technology, (n)
company administration (accounting and tax matters), (o) capital
markets analysis, (p) procurement, (q) human resources, (r)
personnel, (s) training and (t) the provision of services related to the
workforce.
Operations
Responsible for supporting the Group and the Board in matters
relating to: (a) general management of the production site, (b)
production engineering and reservoir management, (c) drilling and
workover management, (d) production, (e) engineering and
construction, (f) field operations, (g) relations with governmental
authorities, (h) security and (i) administration.
10 Since 24 February 2023, no Director has been appointed as Senior Independent Director
11 Until 14 February 2026 the Audit Committee was chaired by Fiona Paulus.
GOVERNANCE FRAMEWORK
73 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Head: Elena Zhuravleva Head: David Roberts
Legal
Responsible for supporting the Group and the Board in matters
relating to: (a) legal matters, (b) legal compliance, (c) corporate
governance, (d) company administration (legal and governance
matters), (e) relations with governmental authorities, (f) security
and (g) administration.
QHSE
Responsible for supporting the Group and the Board in matters
relating to QHSE issues.
Head: Thomas Hartnett Head: Daulet Tulegenov
Board policies and governance arrangements
Nostrum recognises the important role that good corporate
governance plays in the success of the Company. As a result, the
Board promotes high standards of corporate governance as a key
component of its activities. Clearly defined roles and responsibilities,
non-executive independence, boardroom and workplace diversity, an
open and transparent culture and the work of our committees in
implementing the Company’s values and policies throughout the
Group are all vital ingredients to get this right for our stakeholders.
In order to ensure that it is involved in making important decisions for
the Group and to ensure a clear division of responsibilities between
the Board and executive management, the Board has identified
certain “reserved matters” that are subject to its approval. Other
matters, responsibilities and authorities have been delegated to its
committees and the senior management team, as set out in the
governance framework on pages 72-74.
The schedule of matters reserved for the Board is reviewed annually
and is available on our website.
Division of responsibilities
The Company’s Chairman as from 16 October 2025, Nikolay Ivin, is a
non-executive director who also chairs the Company’s Strategy
Committee.
The Chief Executive Officer is also a member of the Strategy
Committee and his strategic capabilities are strengthened by the
Senior management team.
Independence
Robust oversight is crucial for strong corporate governance and the
Board is committed to securing this through an appropriate balance of
independent Non-Executive Directors.
At the date of this Annual Report, the Board considers James Hart to
be independent and Nikolay Ivin to have been independent since his
appointment.
Equality and diversity
The Board has due regard for the importance of, and benefits from,
diversity in its membership, including gender diversity, and strives to
maintain an appropriate balance on the Board. The Board is
composed of individuals with diverse sectoral experience, ages,
geographic and ethnic origin, and gender.
As at 31 December 2025 the Company had 17% female
representation on its Board. As at 2025 year-end, the Audit
Committee comprised 50% females, the Nomination and Governance
Committee had 25% female representation and the Remuneration
Committee had 33% female representation. The Nomination and
Governance Committee remains satisfied that the Board has the right
mix of skills and experience to operate effectively. However, the skills
and experience mix are under continuous review. The Nomination
and Governance Committee remains committed to monitoring
diversity closely as part of future succession planning.
On 7 December 2017, the Board approved its Equality and Diversity
Policy. Clarificatory amendments were made to the Company’s
Equality and Diversity Policy on 14 September 2022, to which the
Company continued to adhere throughout 2024.
In accordance with the policy, the Group is committed to eliminating
discrimination and encouraging equality and diversity in all of our
business activities, including the provision of employment. The policy
applies to all who work for the Group, including Directors, together
with the managerial, supervisory and administrative bodies of all
entities within the Group.
The policy also applies equally to the treatment of our supply chain,
applicants and visitors by our staff and the treatment of our staff by
these third parties. The objective of the policy is to promote equality
of opportunity and to ensure that no individual suffers unlawful
discrimination, directly or indirectly, on the grounds of race, colour,
ethnicity, religion, sex, gender identity or expression, gender
reassignment, national origin, age, marital status, disability or sexual
orientation.
The Group aims to ensure the objective of the policy is met by:
• Ensuring all recruitment advertising and publicity aims to encourage
applications from any individual who has appropriate qualifications
and/or experience;
• Not offering discriminatory conditions of employment;
• Ensuring all promotions are made strictly on the basis of the ability to
do the job and no such decision is made on a discriminatory basis;
• Considering requests for part-time work or job-sharing opportunities
wherever appropriate and practicable, and aiming to ensure that part-
time employees receive fair treatment;
• Ensuring that the demands of religion (e.g. prayer time and religious
holidays), culture (e.g. traditional dress) and special dietary needs are
accommodated where possible; and
• Taking reasonable steps to assist employees with domestic
responsibilities (e.g. young children and dependent elderly relatives).
• Throughout the year, our commitment to advancing diversity and
inclusion within our organisation has remained a priority. We have
enhanced and implemented several initiatives, notably the ‘Targeted
Recruitment Program’, focusing on underrepresented groups such as
women, minorities, and individuals with disabilities. Concrete
measures as collaborating with external organisations, taking training
for inclusive recruitment, and creating inclusive job advert have been
taken. For more information on the Diversity Action Plan of the Group
please see pages 44-46.
• As at 31 December 2025, we did not comply with the following targets
in the Listing Rules on board diversity:
• 40% of individuals on the board to be women.
• At least one senior position on the board (chair, chief executive, senior
independent director or chief financial officer) to be held by a woman.
As at 31 December 2025, we complied with the target in the Listing
Rules on board diversity that at least one individual on the board be
from a minority ethnic background.
73 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Head: Elena Zhuravleva Head: David Roberts
Legal
Responsible for supporting the Group and the Board in matters
relating to: (a) legal matters, (b) legal compliance, (c) corporate
governance, (d) company administration (legal and governance
matters), (e) relations with governmental authorities, (f) security
and (g) administration.
QHSE
Responsible for supporting the Group and the Board in matters
relating to QHSE issues.
Head: Thomas Hartnett Head: Daulet Tulegenov
Board policies and governance arrangements
Nostrum recognises the important role that good corporate
governance plays in the success of the Company. As a result, the
Board promotes high standards of corporate governance as a key
component of its activities. Clearly defined roles and responsibilities,
non-executive independence, boardroom and workplace diversity, an
open and transparent culture and the work of our committees in
implementing the Company’s values and policies throughout the
Group are all vital ingredients to get this right for our stakeholders.
In order to ensure that it is involved in making important decisions for
the Group and to ensure a clear division of responsibilities between
the Board and executive management, the Board has identified
certain “reserved matters” that are subject to its approval. Other
matters, responsibilities and authorities have been delegated to its
committees and the senior management team, as set out in the
governance framework on pages 72-74.
The schedule of matters reserved for the Board is reviewed annually
and is available on our website.
Division of responsibilities
The Company’s Chairman as from 16 October 2025, Nikolay Ivin, is a
non-executive director who also chairs the Company’s Strategy
Committee.
The Chief Executive Officer is also a member of the Strategy
Committee and his strategic capabilities are strengthened by the
Senior management team.
Independence
Robust oversight is crucial for strong corporate governance and the
Board is committed to securing this through an appropriate balance of
independent Non-Executive Directors.
At the date of this Annual Report, the Board considers James Hart to
be independent and Nikolay Ivin to have been independent since his
appointment.
Equality and diversity
The Board has due regard for the importance of, and benefits from,
diversity in its membership, including gender diversity, and strives to
maintain an appropriate balance on the Board. The Board is
composed of individuals with diverse sectoral experience, ages,
geographic and ethnic origin, and gender.
As at 31 December 2025 the Company had 17% female
representation on its Board. As at 2025 year-end, the Audit
Committee comprised 50% females, the Nomination and Governance
Committee had 25% female representation and the Remuneration
Committee had 33% female representation. The Nomination and
Governance Committee remains satisfied that the Board has the right
mix of skills and experience to operate effectively. However, the skills
and experience mix are under continuous review. The Nomination
and Governance Committee remains committed to monitoring
diversity closely as part of future succession planning.
On 7 December 2017, the Board approved its Equality and Diversity
Policy. Clarificatory amendments were made to the Company’s
Equality and Diversity Policy on 14 September 2022, to which the
Company continued to adhere throughout 2024.
In accordance with the policy, the Group is committed to eliminating
discrimination and encouraging equality and diversity in all of our
business activities, including the provision of employment. The policy
applies to all who work for the Group, including Directors, together
with the managerial, supervisory and administrative bodies of all
entities within the Group.
The policy also applies equally to the treatment of our supply chain,
applicants and visitors by our staff and the treatment of our staff by
these third parties. The objective of the policy is to promote equality
of opportunity and to ensure that no individual suffers unlawful
discrimination, directly or indirectly, on the grounds of race, colour,
ethnicity, religion, sex, gender identity or expression, gender
reassignment, national origin, age, marital status, disability or sexual
orientation.
The Group aims to ensure the objective of the policy is met by:
• Ensuring all recruitment advertising and publicity aims to encourage
applications from any individual who has appropriate qualifications
and/or experience;
• Not offering discriminatory conditions of employment;
• Ensuring all promotions are made strictly on the basis of the ability to
do the job and no such decision is made on a discriminatory basis;
• Considering requests for part-time work or job-sharing opportunities
wherever appropriate and practicable, and aiming to ensure that part-
time employees receive fair treatment;
• Ensuring that the demands of religion (e.g. prayer time and religious
holidays), culture (e.g. traditional dress) and special dietary needs are
accommodated where possible; and
• Taking reasonable steps to assist employees with domestic
responsibilities (e.g. young children and dependent elderly relatives).
• Throughout the year, our commitment to advancing diversity and
inclusion within our organisation has remained a priority. We have
enhanced and implemented several initiatives, notably the ‘Targeted
Recruitment Program’, focusing on underrepresented groups such as
women, minorities, and individuals with disabilities. Concrete
measures as collaborating with external organisations, taking training
for inclusive recruitment, and creating inclusive job advert have been
taken. For more information on the Diversity Action Plan of the Group
please see pages 44-46.
• As at 31 December 2025, we did not comply with the following targets
in the Listing Rules on board diversity:
• 40% of individuals on the board to be women.
• At least one senior position on the board (chair, chief executive, senior
independent director or chief financial officer) to be held by a woman.
As at 31 December 2025, we complied with the target in the Listing
Rules on board diversity that at least one individual on the board be
from a minority ethnic background.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
74
CORPORATE GOVERNANCE
Diversity data is collated by our HR function who request colleagues to self-report against drafts of this Annual Report. These targets were not
met due to the appointment processes which concluded on 14 February 2023 having failed to identify sufficient female candidates and the
Company having failed to add a second woman to the Board by the end of 2025 (one of the Company’s stated aspirations as published in the
2024 annual report) due to a number of unplanned changes to the Board.
Table for reporting on gender identity or sex as at 31 December 2025
Number of board
members
Percentage of the
board
Number of senior
positions on the
board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
Men 5 83% 2 7 70%
Women 1 17% 0 3 30%
Other categories
Not specified, prefer not to say
Table for reporting on ethnic background as at 31 December 2025
Number of board
members
Percentage of the
board
Number of senior
positions on the
board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other White
(including minority-white groups)
5 83% 2 5 50%
Mixed/Multiple Ethnic Groups 40%
Asian/Asian British 4
Black/African/Caribbean/Black British
Other ethnic group, including Arab 1 17% 1 10%
Not specified, prefer not to say
Conflicts of interest
Directors have a duty to avoid a situation in which they have, or may
have, a direct or indirect interest that conflicts or may conflict with the
interests of the Company.
Formal procedures are in place to ensure that the Board’s powers of
authorisation of conflicts or potential conflicts of interest of Directors
are operated effectively.
The Board is satisfied that during 2025 these procedures were
enforced and adhered to appropriately.
Appointment and tenure
All Executive Directors have service agreements with the Company.
All Non-Executive Directors have letters of appointment with the
Company. For all Executive Directors engaged through service
agreements, there is no term limit on their services, as the Company
proposes all Executive Directors for annual re- election at each
subsequent Annual General Meeting of the Company.
Each Non-Executive Director appointment is for an initial term of
three years, subject to being re-elected at each subsequent Annual
General Meeting.
Bribery, corruption and whistleblowing
Bribery and corruption are significant risks in the oil and gas industry
and, as such, the Company operates a Group-wide Anti-Corruption
and Bribery Policy, which applies to all Group employees and
contractor staff. The policy requires: annual bribery and corruption
risk assessments; risk-based due diligence on all parties with whom
the Company does business; appropriate anti-bribery and corruption
clauses in contracts; and the training of personnel in anti-bribery and
corruption measures. In addition, the Company’s Code of Conduct
requires that employees or others working on behalf of the Company
do not engage in bribery or corruption in any form. Corruption-related
risks are evaluated on a Group-wide basis (not in respect of divisions).
No confirmed corruption cases were identified in 2025.
No live anti-bribery training was conducted in 2025, however planning
took place in 2025 for antibribery and conflict of interest training for
Nostrum personnel which has been rolled out in 2026.
The Company has also adopted a Whistleblowing Policy that takes
account of the Whistleblowing Arrangements Code of Practice issued
by the British Standards Institute and Public Concern at Work.
Further information can be found on page 74.
Three whistleblowing disclosures were reported in 2025.
Anti-facilitation of tax evasion
Further to the new rules under the Criminal Finances Act 2017 (CFA)
in the UK, in 2018 the Board approved an Anti-Facilitation of Tax
Evasion Policy applicable to the Group and its associated persons. In
connection with the preparation of this policy, the Company
commissioned an independent bespoke risk assessment and
incorporated findings from the assessment into the policy.
CORPORATE GOVERNANCE
Diversity data is collated by our HR function who request colleagues to self-report against drafts of this Annual Report. These targets were not
met due to the appointment processes which concluded on 14 February 2023 having failed to identify sufficient female candidates and the
Company having failed to add a second woman to the Board by the end of 2025 (one of the Company’s stated aspirations as published in the
2024 annual report) due to a number of unplanned changes to the Board.
Table for reporting on gender identity or sex as at 31 December 2025
Number of board
members
Percentage of the
board
Number of senior
positions on the
board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
Men 5 83% 2 7 70%
Women 1 17% 0 3 30%
Other categories
Not specified, prefer not to say
Table for reporting on ethnic background as at 31 December 2025
Number of board
members
Percentage of the
board
Number of senior
positions on the
board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other White
(including minority-white groups)
5 83% 2 5 50%
Mixed/Multiple Ethnic Groups 40%
Asian/Asian British 4
Black/African/Caribbean/Black British
Other ethnic group, including Arab 1 17% 1 10%
Not specified, prefer not to say
Conflicts of interest
Directors have a duty to avoid a situation in which they have, or may
have, a direct or indirect interest that conflicts or may conflict with the
interests of the Company.
Formal procedures are in place to ensure that the Board’s powers of
authorisation of conflicts or potential conflicts of interest of Directors
are operated effectively.
The Board is satisfied that during 2025 these procedures were
enforced and adhered to appropriately.
Appointment and tenure
All Executive Directors have service agreements with the Company.
All Non-Executive Directors have letters of appointment with the
Company. For all Executive Directors engaged through service
agreements, there is no term limit on their services, as the Company
proposes all Executive Directors for annual re- election at each
subsequent Annual General Meeting of the Company.
Each Non-Executive Director appointment is for an initial term of
three years, subject to being re-elected at each subsequent Annual
General Meeting.
Bribery, corruption and whistleblowing
Bribery and corruption are significant risks in the oil and gas industry
and, as such, the Company operates a Group-wide Anti-Corruption
and Bribery Policy, which applies to all Group employees and
contractor staff. The policy requires: annual bribery and corruption
risk assessments; risk-based due diligence on all parties with whom
the Company does business; appropriate anti-bribery and corruption
clauses in contracts; and the training of personnel in anti-bribery and
corruption measures. In addition, the Company’s Code of Conduct
requires that employees or others working on behalf of the Company
do not engage in bribery or corruption in any form. Corruption-related
risks are evaluated on a Group-wide basis (not in respect of divisions).
No confirmed corruption cases were identified in 2025.
No live anti-bribery training was conducted in 2025, however planning
took place in 2025 for antibribery and conflict of interest training for
Nostrum personnel which has been rolled out in 2026.
The Company has also adopted a Whistleblowing Policy that takes
account of the Whistleblowing Arrangements Code of Practice issued
by the British Standards Institute and Public Concern at Work.
Further information can be found on page 74.
Three whistleblowing disclosures were reported in 2025.
Anti-facilitation of tax evasion
Further to the new rules under the Criminal Finances Act 2017 (CFA)
in the UK, in 2018 the Board approved an Anti-Facilitation of Tax
Evasion Policy applicable to the Group and its associated persons. In
connection with the preparation of this policy, the Company
commissioned an independent bespoke risk assessment and
incorporated findings from the assessment into the policy.
75
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
AUDIT COMMITTEE REPORT
Role and responsibilities of the Audit Committee
The key areas of responsibility of the Committee during 2025 were as
follows:
• Review the Group’s audited annual report and interim unaudited
consolidated financial statements;
• Review the formal announcement of the financial results, investor
presentations and any other related announcements;
• Review the effectiveness of significant investigations, internal audit
reviews and other assurance work performed during the year;
• Monitor compliance with applicable regulatory and legal requirements
and the Group’s Code of Conduct;
• Monitor and review the establishment, independence, mandate,
resourcing and effectiveness of the Group’s re-established Internal
Audit function, including the development of its Charter and risk-based
audit plan;
• Maintain the relationship with the Company’s external auditor and
oversee its appointment, remuneration and terms of engagement
whilst continually assessing its independence and objectivity; and
• Review audit findings and assess the standard and effectiveness of the
external audit.
More detail on these and other key areas of responsibility can be
found in the Committee’s terms of reference, which are available on
the Group’s website www.nog.co.uk. The terms of reference of the
Committee were last approved at a meeting of the Board on 6
February 2026.
Membership
The members of the Committee during 2025 were:
Name Membership start date Membership end date
Robert Wynne Member from 20
November 2025,
Chairman from 14
February 2026
James Hart 23 October 2025
Fiona Paulus
(Chairwoman)
24 February 2023 13 February 2026
Chris Hopkinson 24 February 2023 30 June 2025
Nikolay Ivin 31 October 2025 20 November 2025
The qualifications presented in the biographies of the members of the
Committee on pages 66-67, and their respective contributions to the
activities of the Committee, demonstrate that the Committee has the
necessary levels of competence in oil & gas upstream and
downstream operations and in accounting and auditing, as well as
recent and relevant financial experience.
Meetings in 2025
The Committee met in accordance with the reporting and governance
calendar and, as appropriate, in advance of Board consideration of
periodic financial reporting and other material matters within its
remit. The Chief Financial Officer, Chief Legal Officer and Company
Secretary were invited to attend meetings of the Committee.
Representatives of the external auditor attended meetings at the
appropriate stages of the reporting and audit cycle, and the
Committee also met the external auditor privately without
management present.
The Committee held three formal meetings during 2025 and the
attendance of each Committee member at meetings of the
Committee is shown on page 74.
The principal agenda items at the formal meetings were as follows:
Meetings Agenda item
13 May Recommend Q1 financial results to Board
11 November Recommend Q3 financial results to Board
11 December Considering 2026 budget
Financial Reporting Council (FRC) disclosure expectations
In reviewing the 2025 Annual Report and Accounts, the Committee
considered the Financial Reporting Council’s Annual Review of
Corporate Reporting 2024/25, published in September 2025. In
particular, the Committee noted the FRC’s continued focus on
impairment of assets, cash flow statements, financial instruments,
clear disclosure of significant judgements and estimates, internal
consistency across the annual report, and sufficiently robust pre-
issuance review processes.
The Committee therefore placed particular emphasis on:
• the consistency of assumptions and disclosures across the financial
statements, viability statement, principal risks and other narrative
reporting;
• the clarity and completeness of disclosures relating to going concern,
impairment, taxation and financial instruments;
• the presentation and classification of cash flows and financing-related
balances; and
• whether the Annual Report, taken as a whole, is fair, balanced and
understandable and contains material information necessary for
shareholders’ understanding.
These areas of focus are reflected in the Committee’s work described
below.
Self-assessment
A formal review of the Committee’s performance and effectiveness
was not conducted in 2025, as the Committee was reconstituted in
the final quarter of the year. The Committee intends to undertake a
formal evaluation in 2026, once it has operated for a sufficient period
in its current composition. In the meantime, the Chairman and
members have considered informally the Committee’s priorities,
composition and working practices as part of the re-establishment of
the Committee.
Activities during the year
In accordance with its responsibilities outlined above, the
Committee’s activities fall into the following four main areas, each of
which is explained in more detail in the following sections 1 to 4:
1. Financial reporting
2. Risk management and internal controls
3. Compliance with laws and regulations
4. External audit
AUDIT COMMITTEE REPORT
Role and responsibilities of the Audit Committee
The key areas of responsibility of the Committee during 2025 were as
follows:
• Review the Group’s audited annual report and interim unaudited
consolidated financial statements;
• Review the formal announcement of the financial results, investor
presentations and any other related announcements;
• Review the effectiveness of significant investigations, internal audit
reviews and other assurance work performed during the year;
• Monitor compliance with applicable regulatory and legal requirements
and the Group’s Code of Conduct;
• Monitor and review the establishment, independence, mandate,
resourcing and effectiveness of the Group’s re-established Internal
Audit function, including the development of its Charter and risk-based
audit plan;
• Maintain the relationship with the Company’s external auditor and
oversee its appointment, remuneration and terms of engagement
whilst continually assessing its independence and objectivity; and
• Review audit findings and assess the standard and effectiveness of the
external audit.
More detail on these and other key areas of responsibility can be
found in the Committee’s terms of reference, which are available on
the Group’s website www.nog.co.uk. The terms of reference of the
Committee were last approved at a meeting of the Board on 6
February 2026.
Membership
The members of the Committee during 2025 were:
Name Membership start date Membership end date
Robert Wynne Member from 20
November 2025,
Chairman from 14
February 2026
James Hart 23 October 2025
Fiona Paulus
(Chairwoman)
24 February 2023 13 February 2026
Chris Hopkinson 24 February 2023 30 June 2025
Nikolay Ivin 31 October 2025 20 November 2025
The qualifications presented in the biographies of the members of the
Committee on pages 66-67, and their respective contributions to the
activities of the Committee, demonstrate that the Committee has the
necessary levels of competence in oil & gas upstream and
downstream operations and in accounting and auditing, as well as
recent and relevant financial experience.
Meetings in 2025
The Committee met in accordance with the reporting and governance
calendar and, as appropriate, in advance of Board consideration of
periodic financial reporting and other material matters within its
remit. The Chief Financial Officer, Chief Legal Officer and Company
Secretary were invited to attend meetings of the Committee.
Representatives of the external auditor attended meetings at the
appropriate stages of the reporting and audit cycle, and the
Committee also met the external auditor privately without
management present.
The Committee held three formal meetings during 2025 and the
attendance of each Committee member at meetings of the
Committee is shown on page 74.
The principal agenda items at the formal meetings were as follows:
Meetings Agenda item
13 May Recommend Q1 financial results to Board
11 November Recommend Q3 financial results to Board
11 December Considering 2026 budget
Financial Reporting Council (FRC) disclosure expectations
In reviewing the 2025 Annual Report and Accounts, the Committee
considered the Financial Reporting Council’s Annual Review of
Corporate Reporting 2024/25, published in September 2025. In
particular, the Committee noted the FRC’s continued focus on
impairment of assets, cash flow statements, financial instruments,
clear disclosure of significant judgements and estimates, internal
consistency across the annual report, and sufficiently robust pre-
issuance review processes.
The Committee therefore placed particular emphasis on:
• the consistency of assumptions and disclosures across the financial
statements, viability statement, principal risks and other narrative
reporting;
• the clarity and completeness of disclosures relating to going concern,
impairment, taxation and financial instruments;
• the presentation and classification of cash flows and financing-related
balances; and
• whether the Annual Report, taken as a whole, is fair, balanced and
understandable and contains material information necessary for
shareholders’ understanding.
These areas of focus are reflected in the Committee’s work described
below.
Self-assessment
A formal review of the Committee’s performance and effectiveness
was not conducted in 2025, as the Committee was reconstituted in
the final quarter of the year. The Committee intends to undertake a
formal evaluation in 2026, once it has operated for a sufficient period
in its current composition. In the meantime, the Chairman and
members have considered informally the Committee’s priorities,
composition and working practices as part of the re-establishment of
the Committee.
Activities during the year
In accordance with its responsibilities outlined above, the
Committee’s activities fall into the following four main areas, each of
which is explained in more detail in the following sections 1 to 4:
1. Financial reporting
2. Risk management and internal controls
3. Compliance with laws and regulations
4. External audit
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
76
CORPORATE GOVERNANCE
1. Financial reporting
The key areas of the Committee’s activities related to financial
reporting can be summarised as follows:
• Review of the quarterly unaudited and annual audited financial
statements, related announcements and recommendation to the
Board for approval where appropriate;
• Review and challenge of management’s analysis and disclosures
relating to liquidity, going concern, viability, impairment, taxation and
other significant accounting judgements, estimates and assumptions;
• Oversight of the year-end reporting process, including the quality of
supporting papers, the robustness of the pre-issuance review process
and the consistency of narrative and financial reporting; and
• Discussion with management and the external auditor of significant
financial reporting, treasury, tax and balance sheet matters arising
during the year.
The Committee’s review of the quarterly results and half-yearly
financial statements was done with an emphasis on ensuring the
following:
• appropriateness of the critical judgements and estimates applied by
management, and completeness and clarity of the related disclosures;
• consistency of accounting policies and their application from period to
period, unless change was required and properly explained;
• completeness of disclosures for compliance with applicable financial
reporting standards, legal requirements and relevant governance
requirements;
• internal consistency between the financial statements, notes, strategic
report, risk disclosures, viability statement and other narrative
reporting; and
• assessment of whether the Annual Report, taken as a whole, is fair,
balanced and understandable, and provides the information necessary
for shareholders to assess the Group’s position, performance, business
model and strategy.
The Committee reviewed this Annual Report with the same emphasis
as noted above together with the specific areas noted by the FRC and
outlined above.
Significant judgements, estimates and assumptions
Significant judgements, estimates and assumptions applied by
management when preparing the financial statements are closely
related to the principal risks and uncertainties faced by the Group,
which are subject to constant monitoring by the Board and the
Committee.
The principal significant judgements, estimates and assumptions
considered by the Committee in connection with the 2025 financial
statements, together with the Committee’s principal areas of focus
and challenge, are summarised below:
Viability and going concern assessments
Significant judgements: One of the key judgements made by the
management when preparing 2025 Annual Report and Accounts was
related to the Group’s continued viability and going concern. Various
risks and uncertainties may threaten the Company’s future
performance and results.
Significant estimates: Management uses internal estimates to
forecast future volumes of oil and gas production, as well as opex,
G&A, and capital expenditure for future periods, which are subject to
various uncertainties.
Significant assumptions: Management uses product price
assumptions for crude oil, LPG, dry gas and stabilised condensate in
order to estimate cash inflows from future product sales.
Impact on financial statement accounts: Conclusions based on the
going concern and viability assessment affect the basis of preparation
of the financial statements, and may lead to differing valuation and
presentation of the items on the statement of financials.
Committee actions: During 2025, the Committee continued to
critically evaluate management’s assessment of the Company’s and
Group’s ability to operate as a going concern for at least 12 months
from the release date of the financial statements. Additionally, the
Committee examined the Company’s and Group’s long-term viability
beyond this 12-month period.
The Committee reviewed the Management’s analysis of the Group’s
cash flows for the 12-36 months, and monitoring of the Group’s
liquidity position, sensitivity tests of its liquidity position for changes in
crude oil price, production volumes and timing of completion of
various ongoing projects.
After careful consideration, the Committee is satisfied that the Group
has sufficient resources to continue in operation for the going concern
period to 30 June 2027, and agrees with management’s conclusions in
relation to the going concern (see page 32) and viability of the Group
over a period of longer than 12 months (see pages 27-28).
Geopolitical factors, sanctions and payment restrictions
Significant judgements: The Group’s operations are exposed to risks
associated with the political and business environment in Kazakhstan,
being the Group’s primary location of oil & gas operations, as well as
its neighbouring countries. Severe sanctions and trade restrictions
imposed by, among others, the US, UK and EU on Russia at various
stages have increased the economic and political uncertainty and may
have a material adverse impact on the Group’s business, results of
operations, financial condition and prospects.
Management exercised judgement in assessing the effect of
sanctions-related restrictions and OFAC licensing requirements on the
Group’s ability to make and process interest payments to
Noteholders, including the relevance of the trust structure established
for sanctioned holders and the consequences for related disclosures.
Significant estimates: Estimations of the future prices for oil, oil
products and dry gas along with projected production from the
Chinarevskoye and Stepnoy Leopard fields impact the calculation of
future cash flows. These factors, in turn, impact the assessment of the
Company’s and Group’s continued viability as well as the
determination of appropriate impairment provision levels.
Significant assumptions: In estimating recoverable amounts of the
Group’s non-current assets the Management uses assumptions such
future commodity prices, oil and gas reserves, future production
profiles, operating expenses and capital expenditure estimates, fiscal
regimes, and discount rates.
Impact on financial statement accounts: Changes in the significant
estimates and key assumptions may impact the Group’s ability to
continue as a going concern, or the level of impairment required
against the CGU.
The expiry and renewal requirements of relevant OFAC licences
affected the practical ability of the paying agent to process interest
payments to Noteholders in 2025, including payments to holders who
were not themselves sanctioned. This affected liquidity management,
financing risk disclosures and the assessment of going concern and
CORPORATE GOVERNANCE
1. Financial reporting
The key areas of the Committee’s activities related to financial
reporting can be summarised as follows:
• Review of the quarterly unaudited and annual audited financial
statements, related announcements and recommendation to the
Board for approval where appropriate;
• Review and challenge of management’s analysis and disclosures
relating to liquidity, going concern, viability, impairment, taxation and
other significant accounting judgements, estimates and assumptions;
• Oversight of the year-end reporting process, including the quality of
supporting papers, the robustness of the pre-issuance review process
and the consistency of narrative and financial reporting; and
• Discussion with management and the external auditor of significant
financial reporting, treasury, tax and balance sheet matters arising
during the year.
The Committee’s review of the quarterly results and half-yearly
financial statements was done with an emphasis on ensuring the
following:
• appropriateness of the critical judgements and estimates applied by
management, and completeness and clarity of the related disclosures;
• consistency of accounting policies and their application from period to
period, unless change was required and properly explained;
• completeness of disclosures for compliance with applicable financial
reporting standards, legal requirements and relevant governance
requirements;
• internal consistency between the financial statements, notes, strategic
report, risk disclosures, viability statement and other narrative
reporting; and
• assessment of whether the Annual Report, taken as a whole, is fair,
balanced and understandable, and provides the information necessary
for shareholders to assess the Group’s position, performance, business
model and strategy.
The Committee reviewed this Annual Report with the same emphasis
as noted above together with the specific areas noted by the FRC and
outlined above.
Significant judgements, estimates and assumptions
Significant judgements, estimates and assumptions applied by
management when preparing the financial statements are closely
related to the principal risks and uncertainties faced by the Group,
which are subject to constant monitoring by the Board and the
Committee.
The principal significant judgements, estimates and assumptions
considered by the Committee in connection with the 2025 financial
statements, together with the Committee’s principal areas of focus
and challenge, are summarised below:
Viability and going concern assessments
Significant judgements: One of the key judgements made by the
management when preparing 2025 Annual Report and Accounts was
related to the Group’s continued viability and going concern. Various
risks and uncertainties may threaten the Company’s future
performance and results.
Significant estimates: Management uses internal estimates to
forecast future volumes of oil and gas production, as well as opex,
G&A, and capital expenditure for future periods, which are subject to
various uncertainties.
Significant assumptions: Management uses product price
assumptions for crude oil, LPG, dry gas and stabilised condensate in
order to estimate cash inflows from future product sales.
Impact on financial statement accounts: Conclusions based on the
going concern and viability assessment affect the basis of preparation
of the financial statements, and may lead to differing valuation and
presentation of the items on the statement of financials.
Committee actions: During 2025, the Committee continued to
critically evaluate management’s assessment of the Company’s and
Group’s ability to operate as a going concern for at least 12 months
from the release date of the financial statements. Additionally, the
Committee examined the Company’s and Group’s long-term viability
beyond this 12-month period.
The Committee reviewed the Management’s analysis of the Group’s
cash flows for the 12-36 months, and monitoring of the Group’s
liquidity position, sensitivity tests of its liquidity position for changes in
crude oil price, production volumes and timing of completion of
various ongoing projects.
After careful consideration, the Committee is satisfied that the Group
has sufficient resources to continue in operation for the going concern
period to 30 June 2027, and agrees with management’s conclusions in
relation to the going concern (see page 32) and viability of the Group
over a period of longer than 12 months (see pages 27-28).
Geopolitical factors, sanctions and payment restrictions
Significant judgements: The Group’s operations are exposed to risks
associated with the political and business environment in Kazakhstan,
being the Group’s primary location of oil & gas operations, as well as
its neighbouring countries. Severe sanctions and trade restrictions
imposed by, among others, the US, UK and EU on Russia at various
stages have increased the economic and political uncertainty and may
have a material adverse impact on the Group’s business, results of
operations, financial condition and prospects.
Management exercised judgement in assessing the effect of
sanctions-related restrictions and OFAC licensing requirements on the
Group’s ability to make and process interest payments to
Noteholders, including the relevance of the trust structure established
for sanctioned holders and the consequences for related disclosures.
Significant estimates: Estimations of the future prices for oil, oil
products and dry gas along with projected production from the
Chinarevskoye and Stepnoy Leopard fields impact the calculation of
future cash flows. These factors, in turn, impact the assessment of the
Company’s and Group’s continued viability as well as the
determination of appropriate impairment provision levels.
Significant assumptions: In estimating recoverable amounts of the
Group’s non-current assets the Management uses assumptions such
future commodity prices, oil and gas reserves, future production
profiles, operating expenses and capital expenditure estimates, fiscal
regimes, and discount rates.
Impact on financial statement accounts: Changes in the significant
estimates and key assumptions may impact the Group’s ability to
continue as a going concern, or the level of impairment required
against the CGU.
The expiry and renewal requirements of relevant OFAC licences
affected the practical ability of the paying agent to process interest
payments to Noteholders in 2025, including payments to holders who
were not themselves sanctioned. This affected liquidity management,
financing risk disclosures and the assessment of going concern and
AUDIT COMMITTEE REPORT
77 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
related uncertainties. Sanctioned holders were addressed through the
relevant trust structure.
Committee actions: During 2025, the Committee continued to
critically evaluate management’s assessment of the geopolitical
factors and their impact on the Group’s operations.
As part of the regular Board meetings, the Committee reviewed the
monthly liquidity position prepared by management and agreed the
estimations of product prices, costs and production profiles were
appropriate.
As part of the regular Board meetings, the Committee considered
management’s assessment of the extent to which sanctions-related
restrictions and OFAC licensing requirements affected the Group’s
ability to make and process interest payments in 2025, including
where those restrictions affected payments to all Noteholders
through the paying mechanism rather than only to sanctioned holders
directly, and the extent to which these matters were appropriately
reflected in liquidity, going concern and related disclosures.
The Committee also considered the implications of those sanctions-
related payment restrictions for the financial statements, including
liquidity management, financing risk disclosures and the application of
the going concern basis in the quarterly, half-yearly and annual
financial statements.
Impairment of non-current assets
Significant judgements: In conducting the impairment analysis,
management exercised judgement in determining the appropriate
cash-generating unit (‘CGU’) for the Group’s non-current assets and in
assessing the valuation methodology to be applied in estimating the
recoverable amount of that CGU. Management also exercised
judgement in determining the relevant value drivers of the CGU,
including the role of market-based evidence and enterprise value in
assessing fair value less costs of disposal.
Significant estimates: Management estimated the CGU’s recoverable
amount using a discounted cash flow model, supported by market-
based considerations including enterprise value. This required
estimation of future cash flows over the relevant forecast period and
assessment of the extent to which those cash flows were supported
by current asset condition, reserves and anticipated utilisation of the
Group’s assets.
Significant assumptions: Key assumptions used in estimating
recoverable amount included commodity prices, oil and gas reserves,
production profiles, operating and capital expenditure, fiscal
assumptions and discount rates. Management also considered
market-based indicators, including the market value of the Group’s
bonds and the Company’s shares, in assessing enterprise value and
the overall reasonableness of the impairment conclusion.
Impact on financial statement accounts: Changes in the key
assumptions, including reserves, commodity prices, discount rates,
production profiles and capital expenditure, may materially affect the
estimated recoverable amount of the CGU and therefore the carrying
value of non-current assets.
In 2025, following a downgrade in reserves and the resulting impact
on expected future cash flows, an impairment loss was recognised in
the financial statements.
Committee actions: The Committee reviewed and challenged
management’s impairment assessment, including the determination
of the CGU, the valuation methodology adopted, and the principal
assumptions used in estimating recoverable amount.
Particular focus was given to reserves, production profiles, commodity
prices, discount rates, forecast operating and capital expenditure, and
the consistency of those assumptions with assumptions used
elsewhere in the Annual Report, including the going concern and
viability analysis.
The Committee also considered the use of market-based indicators,
including enterprise value, in supporting the impairment assessment,
and reviewed the sensitivity of the outcome to reasonably possible
changes in key assumptions.
In doing so, the Committee discussed the impairment analysis with
both management and the external auditor and considered whether
the related disclosures in the financial statements appropriately
described the basis of the assessment, the key uncertainties and the
effect of the impairment recognised in 2025.
Oil and gas reserves
Significant judgements: Management exercised significant judgment
in determining the volume of future production used in the unit-of-
production method for the depletion of the certain oil and gas asset.
This assessment was based on the estimated oil and gas reserves,
requiring careful evaluation to ensure accurate and reliable
calculations.
Significant estimates: Management uses internal estimates to
perform an annual assessment of the oil and gas reserves. The
reserves estimation is made in accordance with the methodology of
the Society of Petroleum Engineers (SPE).
Significant assumptions: Considering the most recent available
information, the Committee reviewed various key assumptions used
by management in estimating the oil and gas reserves and was
satisfied with the reasonableness of such assumptions.
Impact on financial statement accounts: The Committee remained
comfortable with the updated reserves estimations prepared by the
management, recognising them as a critical factor in the calculation of
depreciation, depletion, and impairment.
Committee actions: The Committee concurred with the continued
application of the unit-of-production method for the depletion of the
oil & gas assets, as this method reflects the expected pattern of
consumption of future economic benefits by the Group.
The Committee also considered the governance over the reserves
estimation process and the implications of reserves changes for
depletion, impairment and related disclosures.
Taxation
Significant judgements: Given the ongoing changes and varying
interpretations of Kazakhstan’s tax legislation and regulations,
management must exercise significant judgment in assessing
potential exposures. This includes estimating the ultimate amount of
any future taxes, penalties, and interest that could arise from
disagreements by tax authorities with the positions adopted by the
Group.
Significant estimates: The Group undergoes routine tax audits, which
involve discussions of tax computations with tax authorities. While the
final outcome of these audits and discussions cannot be determined
with absolute certainty, management estimates the amounts of tax
accruals and provides appropriate disclosures.
Significant assumptions: The assumptions used in estimating
potential tax liabilities are based on professional advice and a careful
consideration of the nature of ongoing discussions with tax
authorities.
Impact on financial statement accounts: Due to the inherent
uncertainties in Kazakhstan’s tax systems, there is a possibility that the
ultimate amount of taxes, penalties, and interest, if any, may exceed
the amount expensed to date and accrued as of 31 December 2025.
77 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
related uncertainties. Sanctioned holders were addressed through the
relevant trust structure.
Committee actions: During 2025, the Committee continued to
critically evaluate management’s assessment of the geopolitical
factors and their impact on the Group’s operations.
As part of the regular Board meetings, the Committee reviewed the
monthly liquidity position prepared by management and agreed the
estimations of product prices, costs and production profiles were
appropriate.
As part of the regular Board meetings, the Committee considered
management’s assessment of the extent to which sanctions-related
restrictions and OFAC licensing requirements affected the Group’s
ability to make and process interest payments in 2025, including
where those restrictions affected payments to all Noteholders
through the paying mechanism rather than only to sanctioned holders
directly, and the extent to which these matters were appropriately
reflected in liquidity, going concern and related disclosures.
The Committee also considered the implications of those sanctions-
related payment restrictions for the financial statements, including
liquidity management, financing risk disclosures and the application of
the going concern basis in the quarterly, half-yearly and annual
financial statements.
Impairment of non-current assets
Significant judgements: In conducting the impairment analysis,
management exercised judgement in determining the appropriate
cash-generating unit (‘CGU’) for the Group’s non-current assets and in
assessing the valuation methodology to be applied in estimating the
recoverable amount of that CGU. Management also exercised
judgement in determining the relevant value drivers of the CGU,
including the role of market-based evidence and enterprise value in
assessing fair value less costs of disposal.
Significant estimates: Management estimated the CGU’s recoverable
amount using a discounted cash flow model, supported by market-
based considerations including enterprise value. This required
estimation of future cash flows over the relevant forecast period and
assessment of the extent to which those cash flows were supported
by current asset condition, reserves and anticipated utilisation of the
Group’s assets.
Significant assumptions: Key assumptions used in estimating
recoverable amount included commodity prices, oil and gas reserves,
production profiles, operating and capital expenditure, fiscal
assumptions and discount rates. Management also considered
market-based indicators, including the market value of the Group’s
bonds and the Company’s shares, in assessing enterprise value and
the overall reasonableness of the impairment conclusion.
Impact on financial statement accounts: Changes in the key
assumptions, including reserves, commodity prices, discount rates,
production profiles and capital expenditure, may materially affect the
estimated recoverable amount of the CGU and therefore the carrying
value of non-current assets.
In 2025, following a downgrade in reserves and the resulting impact
on expected future cash flows, an impairment loss was recognised in
the financial statements.
Committee actions: The Committee reviewed and challenged
management’s impairment assessment, including the determination
of the CGU, the valuation methodology adopted, and the principal
assumptions used in estimating recoverable amount.
Particular focus was given to reserves, production profiles, commodity
prices, discount rates, forecast operating and capital expenditure, and
the consistency of those assumptions with assumptions used
elsewhere in the Annual Report, including the going concern and
viability analysis.
The Committee also considered the use of market-based indicators,
including enterprise value, in supporting the impairment assessment,
and reviewed the sensitivity of the outcome to reasonably possible
changes in key assumptions.
In doing so, the Committee discussed the impairment analysis with
both management and the external auditor and considered whether
the related disclosures in the financial statements appropriately
described the basis of the assessment, the key uncertainties and the
effect of the impairment recognised in 2025.
Oil and gas reserves
Significant judgements: Management exercised significant judgment
in determining the volume of future production used in the unit-of-
production method for the depletion of the certain oil and gas asset.
This assessment was based on the estimated oil and gas reserves,
requiring careful evaluation to ensure accurate and reliable
calculations.
Significant estimates: Management uses internal estimates to
perform an annual assessment of the oil and gas reserves. The
reserves estimation is made in accordance with the methodology of
the Society of Petroleum Engineers (SPE).
Significant assumptions: Considering the most recent available
information, the Committee reviewed various key assumptions used
by management in estimating the oil and gas reserves and was
satisfied with the reasonableness of such assumptions.
Impact on financial statement accounts: The Committee remained
comfortable with the updated reserves estimations prepared by the
management, recognising them as a critical factor in the calculation of
depreciation, depletion, and impairment.
Committee actions: The Committee concurred with the continued
application of the unit-of-production method for the depletion of the
oil & gas assets, as this method reflects the expected pattern of
consumption of future economic benefits by the Group.
The Committee also considered the governance over the reserves
estimation process and the implications of reserves changes for
depletion, impairment and related disclosures.
Taxation
Significant judgements: Given the ongoing changes and varying
interpretations of Kazakhstan’s tax legislation and regulations,
management must exercise significant judgment in assessing
potential exposures. This includes estimating the ultimate amount of
any future taxes, penalties, and interest that could arise from
disagreements by tax authorities with the positions adopted by the
Group.
Significant estimates: The Group undergoes routine tax audits, which
involve discussions of tax computations with tax authorities. While the
final outcome of these audits and discussions cannot be determined
with absolute certainty, management estimates the amounts of tax
accruals and provides appropriate disclosures.
Significant assumptions: The assumptions used in estimating
potential tax liabilities are based on professional advice and a careful
consideration of the nature of ongoing discussions with tax
authorities.
Impact on financial statement accounts: Due to the inherent
uncertainties in Kazakhstan’s tax systems, there is a possibility that the
ultimate amount of taxes, penalties, and interest, if any, may exceed
the amount expensed to date and accrued as of 31 December 2025.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
78
CORPORATE GOVERNANCE
Committee actions: The Committee received regular updates from
management on material tax matters and uncertainties and
considered the basis on which management had assessed the
relevant risks, provisions, contingencies and disclosures. In doing so,
the Committee considered the status of discussions and proceedings
with the tax authorities, external legal and tax advice, experience from
prior similar matters where relevant, and the degree of estimation
uncertainty involved.
The Committee paid particular attention to the disclosure of
significant uncertainties in estimating tax liabilities, including
maintaining ongoing oversight of the Group’s material withholding tax
dispute in Kazakhstan, and considered whether the related
disclosures appropriately described the nature of the uncertainty and
the possible range of outcomes.
Other significant judgements and estimates
The decommissioning of oil and gas assets at the end of their
economic lives, the provisioning for contingent and other liabilities,
current and deferred income tax, depreciation of certain gas
processing assets, and fair value of financial instruments, and the
classification and presentation of financing-related balances and cash
flows are all areas that require management to use judgement and
estimates. The Committee examined each of these issues and sought
clarifications, as and when necessary, including discussions with the
Company’s auditors.
Significant matters communicated by the external auditors
In addition to the significant judgements, estimates and assumptions
outlined above, the external auditor identified revenue recognition
and the risk of fraud through management override of controls as
areas of audit focus. The Committee discussed these matters with
management and the external auditor, considered the design and
operation of the relevant controls, and reviewed the auditor’s
planned and performed procedures in those areas.
2. Risk management and internal controls
The Committee reviewed the Group’s risk management and internal
control framework throughout the year, including the principal risks,
related mitigations and the operation of key controls relevant to
financial reporting, compliance and wider governance, further
information on which can be found in the Risk Management section
on pages 27-28.
In accordance with requirements of the Code relating to the viability
statement, the Committee reviewed the impact and sensitivity
analysis of such risks on the Group’s long-term viability. The principal
areas of risk management assessed by the Committee are described
in the table below.
Key areas of the Committee’s focus in relation to principal
risks:
Geopolitical Risk: The Committee continued to oversee the
management’s assessments and responses to the impact of
worldwide sanctions on the operations the Group. Such responses
included continued collating and regular updates of the lists of all
persons/entities sanctioned in order to ensure Nostrum does not
enter into transactions with any of the persons/entities on these lists.
Liquidity and financial reporting: Throughout the year, and as
explained in more detail elsewhere in this report, the Committee has
been focused on reviews of the viability of the Group and the
application of the going concern basis for preparing the financial
statements.
Tax and legal/regulatory risk: The Committee reviewed significant tax
and legal/regulatory matters relevant to the financial statements and
considered their implications for provisions, contingencies, disclosures
and the wider control environment.
Oil and gas production rates: The Committee recognises the oil and
gas production volumes are subject to significant risks and
uncertainties, and hence continued constant monitoring of the
forecast production rates against actual rates. Periodic updates were
reported by the management at the Committee meetings and Board
meetings, and any material variances were discussed in detail with the
management.
Cyber security: The Committee continued to review the Company’s
and Group’s exposure to cyber-attacks and discussed with
management the effectiveness of proposed actions to address such
exposure.
Third-party contracting and payment controls: The Committee also
considered the adequacy of controls over third-party contracting,
approval and payment processes, particularly where these could give
rise to financial reporting, compliance or fraud risks.
Financial reporting: The Committee seeks to ensure the accurate
maintenance of accounting records and related transactions, and
relevant disclosures, with particular attention to areas of significant
judgements, estimations and assumptions which are inherently
subject to significant risks and uncertainties. Such areas of focus
included viability and going concern assessments, impairment, oil and
gas reserves and production forecasts, taxation as described in the
previous section.
Internal control system
The Group’s internal control system is aimed at mitigating risks and
improving efficiency. These include:
• Segregation of authorities and duties at various levels;
• Policies and procedures covering Directors’ remuneration, compliance,
accounting and reporting and health, safety and environment as
described in the relevant sections of the Annual Report;
• Training and internal communications; and
• Continuous monitoring of short-term, medium-term and long-term
planning, forecasting and decision-making processes.
In the Committee’s view, the Group maintained an appropriate and
evolving framework of risk management and internal control during
the period. The Committee remains focused on continuous
improvement and has provided recommendations to senior
management to further enhance the effectiveness of the control
environment.
Details of the procedures related to compliance control are set out
below (including compliance liaison equivalent to a hotline).
The Committee also considered compliance procedures relevant to
conflicts of interest, whistleblowing and related control matters.
CORPORATE GOVERNANCE
Committee actions: The Committee received regular updates from
management on material tax matters and uncertainties and
considered the basis on which management had assessed the
relevant risks, provisions, contingencies and disclosures. In doing so,
the Committee considered the status of discussions and proceedings
with the tax authorities, external legal and tax advice, experience from
prior similar matters where relevant, and the degree of estimation
uncertainty involved.
The Committee paid particular attention to the disclosure of
significant uncertainties in estimating tax liabilities, including
maintaining ongoing oversight of the Group’s material withholding tax
dispute in Kazakhstan, and considered whether the related
disclosures appropriately described the nature of the uncertainty and
the possible range of outcomes.
Other significant judgements and estimates
The decommissioning of oil and gas assets at the end of their
economic lives, the provisioning for contingent and other liabilities,
current and deferred income tax, depreciation of certain gas
processing assets, and fair value of financial instruments, and the
classification and presentation of financing-related balances and cash
flows are all areas that require management to use judgement and
estimates. The Committee examined each of these issues and sought
clarifications, as and when necessary, including discussions with the
Company’s auditors.
Significant matters communicated by the external auditors
In addition to the significant judgements, estimates and assumptions
outlined above, the external auditor identified revenue recognition
and the risk of fraud through management override of controls as
areas of audit focus. The Committee discussed these matters with
management and the external auditor, considered the design and
operation of the relevant controls, and reviewed the auditor’s
planned and performed procedures in those areas.
2. Risk management and internal controls
The Committee reviewed the Group’s risk management and internal
control framework throughout the year, including the principal risks,
related mitigations and the operation of key controls relevant to
financial reporting, compliance and wider governance, further
information on which can be found in the Risk Management section
on pages 27-28.
In accordance with requirements of the Code relating to the viability
statement, the Committee reviewed the impact and sensitivity
analysis of such risks on the Group’s long-term viability. The principal
areas of risk management assessed by the Committee are described
in the table below.
Key areas of the Committee’s focus in relation to principal
risks:
Geopolitical Risk: The Committee continued to oversee the
management’s assessments and responses to the impact of
worldwide sanctions on the operations the Group. Such responses
included continued collating and regular updates of the lists of all
persons/entities sanctioned in order to ensure Nostrum does not
enter into transactions with any of the persons/entities on these lists.
Liquidity and financial reporting: Throughout the year, and as
explained in more detail elsewhere in this report, the Committee has
been focused on reviews of the viability of the Group and the
application of the going concern basis for preparing the financial
statements.
Tax and legal/regulatory risk: The Committee reviewed significant tax
and legal/regulatory matters relevant to the financial statements and
considered their implications for provisions, contingencies, disclosures
and the wider control environment.
Oil and gas production rates: The Committee recognises the oil and
gas production volumes are subject to significant risks and
uncertainties, and hence continued constant monitoring of the
forecast production rates against actual rates. Periodic updates were
reported by the management at the Committee meetings and Board
meetings, and any material variances were discussed in detail with the
management.
Cyber security: The Committee continued to review the Company’s
and Group’s exposure to cyber-attacks and discussed with
management the effectiveness of proposed actions to address such
exposure.
Third-party contracting and payment controls: The Committee also
considered the adequacy of controls over third-party contracting,
approval and payment processes, particularly where these could give
rise to financial reporting, compliance or fraud risks.
Financial reporting: The Committee seeks to ensure the accurate
maintenance of accounting records and related transactions, and
relevant disclosures, with particular attention to areas of significant
judgements, estimations and assumptions which are inherently
subject to significant risks and uncertainties. Such areas of focus
included viability and going concern assessments, impairment, oil and
gas reserves and production forecasts, taxation as described in the
previous section.
Internal control system
The Group’s internal control system is aimed at mitigating risks and
improving efficiency. These include:
• Segregation of authorities and duties at various levels;
• Policies and procedures covering Directors’ remuneration, compliance,
accounting and reporting and health, safety and environment as
described in the relevant sections of the Annual Report;
• Training and internal communications; and
• Continuous monitoring of short-term, medium-term and long-term
planning, forecasting and decision-making processes.
In the Committee’s view, the Group maintained an appropriate and
evolving framework of risk management and internal control during
the period. The Committee remains focused on continuous
improvement and has provided recommendations to senior
management to further enhance the effectiveness of the control
environment.
Details of the procedures related to compliance control are set out
below (including compliance liaison equivalent to a hotline).
The Committee also considered compliance procedures relevant to
conflicts of interest, whistleblowing and related control matters.
AUDIT COMMITTEE REPORT
79 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Internal Audit
Until late 2025, the Group did not operate a dedicated Internal Audit
function and relied on third-party financial and technical audits,
together with ad hoc internal reviews, with the results reported to the
relevant Board committee. Following the appointment of a Head of
Internal Audit in late 2025, the Committee began overseeing the re-
establishment of the function.
During this initial period, the Committee’s focus was on the proposed
mandate, reporting line, independence and access rights of Internal
Audit, together with the development of an updated Internal Audit
Charter and a risk-based audit plan. The Committee also considered
how the function should be resourced, including the potential use of
co-sourced specialist support where appropriate.
The Committee expects Internal Audit to develop into an independent
assurance function reporting functionally to the Committee, with
direct access to the Chair of the Committee and responsibility for
reporting significant findings, monitoring agreed remedial actions and
escalating material control issues where necessary.
3. Compliance with laws and regulations
The Chief Legal Officer and Company Secretary attend the
Committee’s meetings, which allows the Committee to raise any
concerns related to legal, compliance or whistleblowing matters and
the status of any ongoing litigation. During the year, the Committee
received updates on legal and compliance matters relevant to its
remit, including significant litigation, regulatory developments,
whistleblowing matters and compliance procedures. Where relevant,
the Committee considered the potential effect of such matters on the
financial statements, disclosures and wider control environment.
UK Corporate Governance Code
The Committee considered the requirements of the UK Corporate
Governance Code applicable to the Group during 2025. As noted
above, no formal review of the Committee’s performance and
effectiveness was carried out in 2025 following the Committee’s
reconstitution late in the year. The Committee also recognised that
the Internal Audit function was only re-established in late 2025 and
that the relevant framework documentation and annual plan were
still under development at year end. These matters are being
addressed in 2026.
Whistleblowing arrangements
Nostrum has a Group Whistleblowing Policy and, to ensure that all
Group employees have access to someone who can provide them
with support and guidance, the Group has two compliance liaison
officers: one English, Kazakh and Russian-speaking officer based in
Uralsk and another Dutch and English-speaking officer based in
Brussels. The Audit Committee maintained close contact with the
compliance liaison officers. Three whistleblowing disclosures were
reported in 2025. The Committee received updates on the handling of
whistleblowing matters and remained available to oversee any matter
requiring escalation within its remit.
4. External audit
Appointment of external auditor
Since 2023, MHA and Ernst & Young Kazakhstan have been auditors
of the Group and Zhaikmunai LLP, respectively. On the
recommendation of the Committee and subsequent approval by the
Company’s shareholders, MHA was first appointed as auditors of the
Group on 30 June 2023. The re-appointment of MHA was approved
by the shareholders at the Annual General Meetings on 5 June 2024
and 30 June 2025. On 14 November 2025, the Company announced
the resignation of MHA and that RPG Crouch Chapman LLP had been
appointed to fill the ensuing casual vacancy. The Committee oversaw
this transition, including consideration of the independence,
competence and resources of the new Group auditor and the
proposed audit approach for the 2025 year end.
The consolidated financial statements of the Group are now audited
by RPG Crouch Chapman LLP as the Group auditor. The audits of the
stand-alone financial statements of the Group’s principal entities,
including Zhaikmunai LLP and Positiv Invest LLP, are performed by
Grant Thornton Kazakhstan, acting as component auditors.
Non-audit services
The main principle of the Group’s policy on the provision of non-audit
services by the external auditor is that non-audit services may only be
provided by the external auditor where the external auditor maintains
the necessary degree of independence and objectivity, and that
standard supplier selection procedures are carried out.
Committee pre-approval is required before the external auditor is
engaged to provide any permitted non-audit services (as defined in
the policy) in addition to any other approvals required by the Board
and management pursuant to powers delegated by the Board or
Nostrum’s internal approvals policies.
The Committee monitors the external auditor to ensure that it does
not provide non-audit services that are prohibited by the FRC and
limits such services to due diligence services and other assurance
services. The revised policy is available on the Group’s website at
www.nog.co.uk and will be reviewed and amended as and when
required.
No non-audit services were provided by the Group auditor during
2025. Audit fees for 2025 totalled US$743 thousand (2024: US$1,273
thousand).
A detailed breakdown of audit and non-audit fees for 2025 can be
found in Note 29 to the consolidated financial statements of the
Group on page 131.
By operating in accordance with the above policy and other practices
established within the Group, the Committee was satisfied that
adequate safeguards were in place to ensure the objectivity and
independence of the external auditor.
79 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Internal Audit
Until late 2025, the Group did not operate a dedicated Internal Audit
function and relied on third-party financial and technical audits,
together with ad hoc internal reviews, with the results reported to the
relevant Board committee. Following the appointment of a Head of
Internal Audit in late 2025, the Committee began overseeing the re-
establishment of the function.
During this initial period, the Committee’s focus was on the proposed
mandate, reporting line, independence and access rights of Internal
Audit, together with the development of an updated Internal Audit
Charter and a risk-based audit plan. The Committee also considered
how the function should be resourced, including the potential use of
co-sourced specialist support where appropriate.
The Committee expects Internal Audit to develop into an independent
assurance function reporting functionally to the Committee, with
direct access to the Chair of the Committee and responsibility for
reporting significant findings, monitoring agreed remedial actions and
escalating material control issues where necessary.
3. Compliance with laws and regulations
The Chief Legal Officer and Company Secretary attend the
Committee’s meetings, which allows the Committee to raise any
concerns related to legal, compliance or whistleblowing matters and
the status of any ongoing litigation. During the year, the Committee
received updates on legal and compliance matters relevant to its
remit, including significant litigation, regulatory developments,
whistleblowing matters and compliance procedures. Where relevant,
the Committee considered the potential effect of such matters on the
financial statements, disclosures and wider control environment.
UK Corporate Governance Code
The Committee considered the requirements of the UK Corporate
Governance Code applicable to the Group during 2025. As noted
above, no formal review of the Committee’s performance and
effectiveness was carried out in 2025 following the Committee’s
reconstitution late in the year. The Committee also recognised that
the Internal Audit function was only re-established in late 2025 and
that the relevant framework documentation and annual plan were
still under development at year end. These matters are being
addressed in 2026.
Whistleblowing arrangements
Nostrum has a Group Whistleblowing Policy and, to ensure that all
Group employees have access to someone who can provide them
with support and guidance, the Group has two compliance liaison
officers: one English, Kazakh and Russian-speaking officer based in
Uralsk and another Dutch and English-speaking officer based in
Brussels. The Audit Committee maintained close contact with the
compliance liaison officers. Three whistleblowing disclosures were
reported in 2025. The Committee received updates on the handling of
whistleblowing matters and remained available to oversee any matter
requiring escalation within its remit.
4. External audit
Appointment of external auditor
Since 2023, MHA and Ernst & Young Kazakhstan have been auditors
of the Group and Zhaikmunai LLP, respectively. On the
recommendation of the Committee and subsequent approval by the
Company’s shareholders, MHA was first appointed as auditors of the
Group on 30 June 2023. The re-appointment of MHA was approved
by the shareholders at the Annual General Meetings on 5 June 2024
and 30 June 2025. On 14 November 2025, the Company announced
the resignation of MHA and that RPG Crouch Chapman LLP had been
appointed to fill the ensuing casual vacancy. The Committee oversaw
this transition, including consideration of the independence,
competence and resources of the new Group auditor and the
proposed audit approach for the 2025 year end.
The consolidated financial statements of the Group are now audited
by RPG Crouch Chapman LLP as the Group auditor. The audits of the
stand-alone financial statements of the Group’s principal entities,
including Zhaikmunai LLP and Positiv Invest LLP, are performed by
Grant Thornton Kazakhstan, acting as component auditors.
Non-audit services
The main principle of the Group’s policy on the provision of non-audit
services by the external auditor is that non-audit services may only be
provided by the external auditor where the external auditor maintains
the necessary degree of independence and objectivity, and that
standard supplier selection procedures are carried out.
Committee pre-approval is required before the external auditor is
engaged to provide any permitted non-audit services (as defined in
the policy) in addition to any other approvals required by the Board
and management pursuant to powers delegated by the Board or
Nostrum’s internal approvals policies.
The Committee monitors the external auditor to ensure that it does
not provide non-audit services that are prohibited by the FRC and
limits such services to due diligence services and other assurance
services. The revised policy is available on the Group’s website at
www.nog.co.uk and will be reviewed and amended as and when
required.
No non-audit services were provided by the Group auditor during
2025. Audit fees for 2025 totalled US$743 thousand (2024: US$1,273
thousand).
A detailed breakdown of audit and non-audit fees for 2025 can be
found in Note 29 to the consolidated financial statements of the
Group on page 131.
By operating in accordance with the above policy and other practices
established within the Group, the Committee was satisfied that
adequate safeguards were in place to ensure the objectivity and
independence of the external auditor.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
80
CORPORATE GOVERNANCE
NOMINATION AND GOVERNANCE COMMITTEE REPORT
Nomination and Governance Committee report
Key responsibilities of the Nomination and Governance
Committee
The key responsibilities of the Committee in 2025 were to:
• Lead the process for Board appointments and make recommendations
to the Board regarding candidates for appointment or reappointment
as Directors;
• Monitor and make recommendations to the Board on Board
governance and corporate governance issues, to enable the Board to
operate effectively and efficiently;
• Regularly review the structure, size and composition (including skills,
knowledge and experience) of the Board;
• Ensure that an annual review of the effectiveness of the Board, and
each committee of the Board, and the contribution of each director is
conducted every year, with an independent external review at least
every three years;
• Keep under review the leadership needs of the Company, both
executive and non-executive, with a view to ensuring the continued
ability of the Company to compete effectively in the marketplace;
• Review annually the time required from Non-Executive Directors.
• Review and approve changes to the Board’s governance guidelines,
monitor the compliance with such guidelines and with applicable legal,
regulatory and listing requirements and recommend to the Board such
changes or additional action as it deems necessary;
• Require Directors to obtain approval from the Board before
undertaking additional external appointments.
More details on key responsibilities can be found in the Committee’s
terms of reference, which are available on the Group’s website at
www.nog.co.uk. The terms of reference of the Committee were last
approved at a meeting of the Board on 6 February 2026.
Membership
The members of the Committee during 2025 were:
Name
Membership start
date
Membership end
date
Martin Gudgeon
(acting Chairman from 1 June
2024 to 20 November 2025)
24 February 2023
Robert Wynne
(Chairman from 20
November 2025)
20 November 2025
Chris Hopkinson 24 February 2023 30 June 2025
Fiona Paulus 24 February 2023 13 February 2026
Stephen Whyte 24 February 2023 16 October 2025
Nikolay Ivin 20 November 2025
Committee meetings
There were no separate meetings of the Nomination and Governance
Committee during 2025. Only members of the Committee have the
right to attend Committee meetings. However, other individuals may
be invited to attend all or part of any meeting, as and when
appropriate.
The process used in relation to appointments, its approach to
succession planning and how both support developing a diverse
pipeline.
Please refer to the Committee’s terms of reference. All Directors will
stand for re-election at the 2026 Annual General Meeting with the full
support of the Board.
How the board evaluation has been conducted, the nature and extent
of an external evaluator’s contact with the board and individual
directors, the outcomes and actions taken, and how it has or will
influence board composition.
No Board evaluation took place during 2025.
The policy on diversity and inclusion, its objectives and linkage to
Company strategy, how it has been implemented and progress on
achieving the objectives.
Please see pages 44-46.
The gender balance of those in the senior management and their
direct reports.
Please see pages 44-46.
CORPORATE GOVERNANCE
NOMINATION AND GOVERNANCE COMMITTEE REPORT
Nomination and Governance Committee report
Key responsibilities of the Nomination and Governance
Committee
The key responsibilities of the Committee in 2025 were to:
• Lead the process for Board appointments and make recommendations
to the Board regarding candidates for appointment or reappointment
as Directors;
• Monitor and make recommendations to the Board on Board
governance and corporate governance issues, to enable the Board to
operate effectively and efficiently;
• Regularly review the structure, size and composition (including skills,
knowledge and experience) of the Board;
• Ensure that an annual review of the effectiveness of the Board, and
each committee of the Board, and the contribution of each director is
conducted every year, with an independent external review at least
every three years;
• Keep under review the leadership needs of the Company, both
executive and non-executive, with a view to ensuring the continued
ability of the Company to compete effectively in the marketplace;
• Review annually the time required from Non-Executive Directors.
• Review and approve changes to the Board’s governance guidelines,
monitor the compliance with such guidelines and with applicable legal,
regulatory and listing requirements and recommend to the Board such
changes or additional action as it deems necessary;
• Require Directors to obtain approval from the Board before
undertaking additional external appointments.
More details on key responsibilities can be found in the Committee’s
terms of reference, which are available on the Group’s website at
www.nog.co.uk. The terms of reference of the Committee were last
approved at a meeting of the Board on 6 February 2026.
Membership
The members of the Committee during 2025 were:
Name
Membership start
date
Membership end
date
Martin Gudgeon
(acting Chairman from 1 June
2024 to 20 November 2025)
24 February 2023
Robert Wynne
(Chairman from 20
November 2025)
20 November 2025
Chris Hopkinson 24 February 2023 30 June 2025
Fiona Paulus 24 February 2023 13 February 2026
Stephen Whyte 24 February 2023 16 October 2025
Nikolay Ivin 20 November 2025
Committee meetings
There were no separate meetings of the Nomination and Governance
Committee during 2025. Only members of the Committee have the
right to attend Committee meetings. However, other individuals may
be invited to attend all or part of any meeting, as and when
appropriate.
The process used in relation to appointments, its approach to
succession planning and how both support developing a diverse
pipeline.
Please refer to the Committee’s terms of reference. All Directors will
stand for re-election at the 2026 Annual General Meeting with the full
support of the Board.
How the board evaluation has been conducted, the nature and extent
of an external evaluator’s contact with the board and individual
directors, the outcomes and actions taken, and how it has or will
influence board composition.
No Board evaluation took place during 2025.
The policy on diversity and inclusion, its objectives and linkage to
Company strategy, how it has been implemented and progress on
achieving the objectives.
Please see pages 44-46.
The gender balance of those in the senior management and their
direct reports.
Please see pages 44-46.
81
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
STATEMENT FROM THE REMUNERATION COMMITTEE
CHAIRMAN
Dear shareholder,
I am pleased to introduce the Directors’ Remuneration Report, which has
been approved by both the Remuneration Committee and the Board for
the year ended 31 December 2025.
Remuneration Policy
The aim of our Directors’ Remuneration Policy, amongst other things, is to
align the remuneration of non-executive and executive directors with the
interests of the Company’s shareholders and to ensure that rewards are
justified by performance.
A resolution to approve an amended Directors’ Remuneration Policy was
submitted to shareholders for a binding vote at the General Meeting held
on 11 July 2024 and was approved by 99.77% of votes cast. The principal
changes approved were:
• the adoption of a new Management Incentive Plan (the “MIP”); and
• to permit all Directors (including the Chairman and Non-executive
Directors) to participate in the MIP.
The first awards under the MIP were released in July 2024 following
achievement of the performance conditions for these awards. Further
awards under the MIP were released in April/May 2025.
Following the vote against the remuneration report at the 2025 AGM the
Company is taking independent legal advice in relation to historical MIP
payments in order to inform the steps it takes to address the concerns of
the Company’s stakeholders. The Company intends to further develop a
new remuneration framework in 2026 that appropriately aligns
remuneration of the management and board with the strategic objectives
of the Company.
At the 2026 AGM, we will be asking our shareholders to approve a new
remuneration policy. The 2025 Directors’ Remuneration Report will also
be subject to an advisory vote at our 2026 AGM. Following the 2026 AGM,
it is intended to hold an EGM proposing further amendments to the
directors’ remuneration policy to introduce a strategic alignment plan.
Remuneration for 2025
By decision of the Remuneration Committee on 10 April 2025, Mr. Khan’s
salary was increased by 20% to GBP 540,000, effective 1 April 2025.
As regards the Group’s personnel as a whole, the collective agreement
with employees of the Company’s subsidiary Zhaikmunai LLP working in
the RoK provides for annual indexation of salaries. Effective 1 January
2025 an increase of 12.3% was granted to employees who are paid in
Kazakh Tenge to cover the increase in the cost of living there during 2024.
Since 14 February 2023, fees payable to the non-executive Directors have
been set at US$100,000 per annum, plus US$10,000 per annum for
committee chairmanship. With effect from 23 October 2025, new
appointments of non-executive directors have been set at GBP 100,000
per annum, plus GBP 10,000 per annum for committee chairmanship.
Details of Executive Director performance against the 2025 KPIs can be
found on page 84 . In setting these targets, the Committee focused on
areas critical to the Company, which were:
• Minimising annual decline of average sales volumes.
• Reducing operational and G&A cash costs.
• Pursuing strategic objectives to monetise the spare capacity within
our world-class processing facilities.
• Ensuring all of our operations are carried out as safely as possible.
• Actively managing our greenhouse gas emissions.
Our strategic targets all remain commercially sensitive and, therefore,
have not been disclosed.
Mr Gladun is the only person who served as an Executive Director during
2025 who has been assessed for a bonus. The assessment was prepared
by the Remuneration Committee and was considered and agreed by the
Committee on 14 April 2026. It was determined that 70% of the 2025 KPIs
had been achieved over the period 15 July 2025 to 31 December 2025
(GBP 160,417 or US$216,851). In addition, it was determined to award Mr
Gladun an exceptional discretionary bonus of GBP 163,596 (US$221,149)
in recognition of his efforts during 2025.
Remuneration for 2026
The 2026 key performance indicators for the CEO and senior managers
were initially proposed by the CEO and then developed in consultation
with the Remuneration Committee and were agreed by the Committee on
14 April 2026. Such KPIs are set out on page 87 .
Following the 2026 AGM, it is intended to hold an EGM proposing further
amendments to the directors’ remuneration policy to introduce a strategic
alignment plan.
Senior management, including the CEO and the CFO, are assessed for
bonuses based on these KPIs. Certain KPIs relating to strategic objectives
are considered to be commercially sensitive and so have not been
disclosed. It is our intention to publish these, together with the bonus
outcome, as required in the first Directors’ Remuneration Report following
their achievement and when the relevant information is no longer
commercially sensitive.
UK Corporate Governance Code
Information on compliance with the Code can be found on pages 63-65 .
Compliance statement
This report has been prepared in accordance with the UK’s regulations on
remuneration reporting. The Companies Act 2006 requires the Company’s
auditor to report to shareholders on certain parts of the Directors’
Remuneration Report and to state whether, in the auditor’s opinion, those
parts of the report have been properly prepared in accordance with the
above regulations. This Annual Statement and the Policy Report are not
subject to audit. The sections of the Directors’ Remuneration Report that
are subject to audit are indicated accordingly.
On behalf of the Committee, I would like to thank shareholders for their
continuing support.
James Hart
Chairman, Remuneration Committee Independent Non-Executive
Director
25 April 2026
STATEMENT FROM THE REMUNERATION COMMITTEE
CHAIRMAN
Dear shareholder,
I am pleased to introduce the Directors’ Remuneration Report, which has
been approved by both the Remuneration Committee and the Board for
the year ended 31 December 2025.
Remuneration Policy
The aim of our Directors’ Remuneration Policy, amongst other things, is to
align the remuneration of non-executive and executive directors with the
interests of the Company’s shareholders and to ensure that rewards are
justified by performance.
A resolution to approve an amended Directors’ Remuneration Policy was
submitted to shareholders for a binding vote at the General Meeting held
on 11 July 2024 and was approved by 99.77% of votes cast. The principal
changes approved were:
• the adoption of a new Management Incentive Plan (the “MIP”); and
• to permit all Directors (including the Chairman and Non-executive
Directors) to participate in the MIP.
The first awards under the MIP were released in July 2024 following
achievement of the performance conditions for these awards. Further
awards under the MIP were released in April/May 2025.
Following the vote against the remuneration report at the 2025 AGM the
Company is taking independent legal advice in relation to historical MIP
payments in order to inform the steps it takes to address the concerns of
the Company’s stakeholders. The Company intends to further develop a
new remuneration framework in 2026 that appropriately aligns
remuneration of the management and board with the strategic objectives
of the Company.
At the 2026 AGM, we will be asking our shareholders to approve a new
remuneration policy. The 2025 Directors’ Remuneration Report will also
be subject to an advisory vote at our 2026 AGM. Following the 2026 AGM,
it is intended to hold an EGM proposing further amendments to the
directors’ remuneration policy to introduce a strategic alignment plan.
Remuneration for 2025
By decision of the Remuneration Committee on 10 April 2025, Mr. Khan’s
salary was increased by 20% to GBP 540,000, effective 1 April 2025.
As regards the Group’s personnel as a whole, the collective agreement
with employees of the Company’s subsidiary Zhaikmunai LLP working in
the RoK provides for annual indexation of salaries. Effective 1 January
2025 an increase of 12.3% was granted to employees who are paid in
Kazakh Tenge to cover the increase in the cost of living there during 2024.
Since 14 February 2023, fees payable to the non-executive Directors have
been set at US$100,000 per annum, plus US$10,000 per annum for
committee chairmanship. With effect from 23 October 2025, new
appointments of non-executive directors have been set at GBP 100,000
per annum, plus GBP 10,000 per annum for committee chairmanship.
Details of Executive Director performance against the 2025 KPIs can be
found on page 84 . In setting these targets, the Committee focused on
areas critical to the Company, which were:
• Minimising annual decline of average sales volumes.
• Reducing operational and G&A cash costs.
• Pursuing strategic objectives to monetise the spare capacity within
our world-class processing facilities.
• Ensuring all of our operations are carried out as safely as possible.
• Actively managing our greenhouse gas emissions.
Our strategic targets all remain commercially sensitive and, therefore,
have not been disclosed.
Mr Gladun is the only person who served as an Executive Director during
2025 who has been assessed for a bonus. The assessment was prepared
by the Remuneration Committee and was considered and agreed by the
Committee on 14 April 2026. It was determined that 70% of the 2025 KPIs
had been achieved over the period 15 July 2025 to 31 December 2025
(GBP 160,417 or US$216,851). In addition, it was determined to award Mr
Gladun an exceptional discretionary bonus of GBP 163,596 (US$221,149)
in recognition of his efforts during 2025.
Remuneration for 2026
The 2026 key performance indicators for the CEO and senior managers
were initially proposed by the CEO and then developed in consultation
with the Remuneration Committee and were agreed by the Committee on
14 April 2026. Such KPIs are set out on page 87 .
Following the 2026 AGM, it is intended to hold an EGM proposing further
amendments to the directors’ remuneration policy to introduce a strategic
alignment plan.
Senior management, including the CEO and the CFO, are assessed for
bonuses based on these KPIs. Certain KPIs relating to strategic objectives
are considered to be commercially sensitive and so have not been
disclosed. It is our intention to publish these, together with the bonus
outcome, as required in the first Directors’ Remuneration Report following
their achievement and when the relevant information is no longer
commercially sensitive.
UK Corporate Governance Code
Information on compliance with the Code can be found on pages 63-65 .
Compliance statement
This report has been prepared in accordance with the UK’s regulations on
remuneration reporting. The Companies Act 2006 requires the Company’s
auditor to report to shareholders on certain parts of the Directors’
Remuneration Report and to state whether, in the auditor’s opinion, those
parts of the report have been properly prepared in accordance with the
above regulations. This Annual Statement and the Policy Report are not
subject to audit. The sections of the Directors’ Remuneration Report that
are subject to audit are indicated accordingly.
On behalf of the Committee, I would like to thank shareholders for their
continuing support.
James Hart
Chairman, Remuneration Committee Independent Non-Executive
Director
25 April 2026
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
82
CORPORATE GOVERNANCE
2025 ANNUAL REPORT ON REMUNERATION
Key responsibilities of the Remuneration Committee
The key responsibilities include ensuring that:
• Remuneration policy and practices of the Company are designed to
support strategy and promote long-term sustainable success, reward
fairly and responsibly, with a clear link to corporate and individual
performance, having regard to statutory and regulatory requirements;
and
• Executive remuneration is aligned to company purpose and values
and linked to delivery of the Company’s long-term strategy.
Membership
The members of the Committee during 2025 were 1 :
Name
Membership start
date
Membership end
date
James Hart (Chairman
from 23 October 2025)
23 October 2025
Chris Hopkinson
(Chairman from
24 February 2023 to
30 June 2025)
24 February 2023 30 June 2025
Fiona Paulus 24 February 2023 13 February
2026
Martin Gudgeon 24 February 2023
1 Nikolay Ivin and Robert Wynne were appointed to the Committee on 14 February 2026.
Their biographies are given on pages 66-67. The Company Secretary
acts as secretary to the Committee.
Remuneration Committee
The remuneration of the Chairman, the CEO, the CFO, the Company
Secretary and all other senior members of executive management is
determined by the Committee under delegated powers from the
Board and in accordance with the Committee’s terms of reference.
The Chairman and the executive members of the Board determine
the remuneration of all Non-Executive Directors, including members
of the Committees.
In accordance with the terms of reference, members of the
Committee shall be appointed by the Board on the recommendation
of the Nomination and Governance Committee in consultation with
the Chair of the Committee. The Committee shall comprise at least
three members, the majority of whom shall be INEDs and one of
whom shall be the Warrant Director.
From 1 January 2025 to 30 June 2025 the Committee was comprised
of two INEDs and the Warrant Director.
The primary responsibilities of the Committee are set out in its terms
of reference which are reviewed and updated annually, and which are
available to download from the Company’s website. Alternatively,
copies can be obtained on request from the Company Secretary.
When making recommendations to the Board regarding Executive
Directors’ remuneration the Committee is able to consider corporate
performance on environmental, social and governance issues and
ensures that any incentive structures do not raise any environmental,
social or governance risks by inadvertently motivating irresponsible
behaviour.
The Committee held three meetings in 2025 and the attendance of
each committee member at such meeting is shown on page 68.
The principal agenda items at the meetings were as follows:
Meetings Agenda item
25 March Performance against 2024 KPIs and approval
of 2025 KPIs
10 April Changes to Mr Khan’s employment agreement
18 April MIP
Stephen Whyte and Arfan Khan attended the meeting on 10 April
2025. Stephen Whyte attended the meeting on 18 April 2025. No
other Directors participated in meetings of the Committee during
2025.
During the year, the Committee received advice internally from Arfan
Khan, Petro Mychalkiw and Thomas Hartnett (Company Secretary).
Mr Khan and Mr Mychalkiw were consulted on the remuneration of
the other senior members of executive management and on matters
relating to the performance of the Company. The Company Secretary
was consulted on regulatory requirements.
Members of the Group’s human resources team may attend relevant
portions of Committee meetings to ensure appropriate input on
matters related to the remuneration of senior members of the
executive management team below Board level.
Voting on remuneration matters
The resolution put to shareholders at the 2025 Annual General Meeting relating to Directors’ remuneration was a resolution to approve the
Directors’ annual report on remuneration which, in accordance with the Companies Act 2006, was subject to an advisory vote. The votes received
are set out in the table below.
Resolution Votes FOR % of votes
cast
Votes AGAINST % of votes
cast
Votes
WITHHELD
To approve the Directors’ Remuneration Report, other than the part
containing the Directors’ Remuneration Policy, in the form set out in the
Company’s Annual Report and Accounts for the year ended 31 December
2024.
9,082,685 10.5 77,379,701 89.5 0
At the 2026 Annual General Meeting, we will be asking our shareholders to approve a new remuneration policy. In addition, the Directors’
remuneration report will be put to shareholders for approval by way of an advisory vote.
CORPORATE GOVERNANCE
2025 ANNUAL REPORT ON REMUNERATION
Key responsibilities of the Remuneration Committee
The key responsibilities include ensuring that:
• Remuneration policy and practices of the Company are designed to
support strategy and promote long-term sustainable success, reward
fairly and responsibly, with a clear link to corporate and individual
performance, having regard to statutory and regulatory requirements;
and
• Executive remuneration is aligned to company purpose and values
and linked to delivery of the Company’s long-term strategy.
Membership
The members of the Committee during 2025 were 1 :
Name
Membership start
date
Membership end
date
James Hart (Chairman
from 23 October 2025)
23 October 2025
Chris Hopkinson
(Chairman from
24 February 2023 to
30 June 2025)
24 February 2023 30 June 2025
Fiona Paulus 24 February 2023 13 February
2026
Martin Gudgeon 24 February 2023
1 Nikolay Ivin and Robert Wynne were appointed to the Committee on 14 February 2026.
Their biographies are given on pages 66-67. The Company Secretary
acts as secretary to the Committee.
Remuneration Committee
The remuneration of the Chairman, the CEO, the CFO, the Company
Secretary and all other senior members of executive management is
determined by the Committee under delegated powers from the
Board and in accordance with the Committee’s terms of reference.
The Chairman and the executive members of the Board determine
the remuneration of all Non-Executive Directors, including members
of the Committees.
In accordance with the terms of reference, members of the
Committee shall be appointed by the Board on the recommendation
of the Nomination and Governance Committee in consultation with
the Chair of the Committee. The Committee shall comprise at least
three members, the majority of whom shall be INEDs and one of
whom shall be the Warrant Director.
From 1 January 2025 to 30 June 2025 the Committee was comprised
of two INEDs and the Warrant Director.
The primary responsibilities of the Committee are set out in its terms
of reference which are reviewed and updated annually, and which are
available to download from the Company’s website. Alternatively,
copies can be obtained on request from the Company Secretary.
When making recommendations to the Board regarding Executive
Directors’ remuneration the Committee is able to consider corporate
performance on environmental, social and governance issues and
ensures that any incentive structures do not raise any environmental,
social or governance risks by inadvertently motivating irresponsible
behaviour.
The Committee held three meetings in 2025 and the attendance of
each committee member at such meeting is shown on page 68.
The principal agenda items at the meetings were as follows:
Meetings Agenda item
25 March Performance against 2024 KPIs and approval
of 2025 KPIs
10 April Changes to Mr Khan’s employment agreement
18 April MIP
Stephen Whyte and Arfan Khan attended the meeting on 10 April
2025. Stephen Whyte attended the meeting on 18 April 2025. No
other Directors participated in meetings of the Committee during
2025.
During the year, the Committee received advice internally from Arfan
Khan, Petro Mychalkiw and Thomas Hartnett (Company Secretary).
Mr Khan and Mr Mychalkiw were consulted on the remuneration of
the other senior members of executive management and on matters
relating to the performance of the Company. The Company Secretary
was consulted on regulatory requirements.
Members of the Group’s human resources team may attend relevant
portions of Committee meetings to ensure appropriate input on
matters related to the remuneration of senior members of the
executive management team below Board level.
Voting on remuneration matters
The resolution put to shareholders at the 2025 Annual General Meeting relating to Directors’ remuneration was a resolution to approve the
Directors’ annual report on remuneration which, in accordance with the Companies Act 2006, was subject to an advisory vote. The votes received
are set out in the table below.
Resolution Votes FOR % of votes
cast
Votes AGAINST % of votes
cast
Votes
WITHHELD
To approve the Directors’ Remuneration Report, other than the part
containing the Directors’ Remuneration Policy, in the form set out in the
Company’s Annual Report and Accounts for the year ended 31 December
2024.
9,082,685 10.5 77,379,701 89.5 0
At the 2026 Annual General Meeting, we will be asking our shareholders to approve a new remuneration policy. In addition, the Directors’
remuneration report will be put to shareholders for approval by way of an advisory vote.
2025 ANNUAL REPORT ON REMUNERATION
83 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Single total figure of remuneration
The table below shows the single total figure of remuneration for the year ended 31 December 2025 for each Director that served at any time
during the year. The information contained in the table is as prescribed by the Large and Medium-sized Companies and Groups (Accounts and
Reports) (Amendment) Regulations 2013 and contains a single total figure of remuneration for each Director.
Directors are remunerated in either GBP, US$ or KZT 1 . All figures in relation to Director remuneration are reported in USD throughout this report.
Director Period
Salary
and fees
Taxable
benefits 2 Annual
bonus 3 MIP1 4 MIP2 4 Pension 5 Total
(audited)
Total
fixed
remuneration
Total
variable
remuneration
Stephen Whyte 2025 247,974 − − 274,295 1,898,024 − 2,420,293 247,974 2,172,319
(until 16 October 2025) 2024 303,515 − − 137,148 − − 440,662 303,515 137,148
Nikolay Ivin 2025 92,211 − − − − − 92,211 92,211 −
(from 15 July 2025) 2024 − − − − − − − − −
Arfan Khan 2025 724,467 23,710 − 423,943 2,933,536 24,749 4,130,405 772,926 3,357,479
(until 30 June 2025) 2024 573,043 29,306 583,556 233,169 − 56,159 1,475,233 658,508 816,725
Viktor Gladun 6 2025 390,390 11,735 438,000 − − 25,884 812,215 374,215 438,000
2024 37,366 − − − − − 37,366 37,366 −
Fiona Paulus 2025 110,000 − − 97,647 675,672 − 883,319 110,000 773,319
2024 110,000 − − 48,823 − − 158,823 110,000 48,823
Chris Cox 2025 − − − − − − − − −
(Until 31 May 2024) 2024 75,833 − − − − − 75,833 75,833 −
Chris Hopkinson 2025 85,150 − − 97,647 675,672 − 858,469 85,150 773,319
(Until 30 June 2025) 2024 110,000 − − 48,823 − − 158,823 110,000 48,823
Martin Gudgeon 2025 110,000 − − 97,647 675,672 − 883,319 110,000 773,319
2024 104,167 − − 48,823 − − 152,989 104,167 48,823
James Hart 2025 28,270 − − − − − 28,270 28,270 −
(from 23 October 2025) 2024 − − − − − − − − −
Robert Wynne 2025 16,166 − − − − − 16,166 16,166 −
(from 20 November 2025) 2024 − − − − − − − − −
1 Stephen Whyte, Nikolay Ivin and Viktor Gladun were remunerated in GBP and US$, Fiona Paulus, Chris Hopkinson and Martin Gudgeon, were remunerated in US$, James Hart and Robert
Wynne were remunerated in GBP, Arfan Khan was remunerated in GBP and KZT. For the purposes of this table, the following exchange rates have been used:
2025: GBP: EUR 1.172; EUR: US$1.123; US$: KZT 524.92
2024: GBP: EUR 1.179; EUR: US$1.085; US$: KZT 503.82
2 Taxable benefits include travel, medical, disability insurances and other benefits.
3 Viktor Gladun received a bonus for his contribution to the operating, commercial, strategic and environmental objectives of the Group in 2025. Arfan Khan received a bonus for his
contribution to the operating, commercial, strategic and environmental objectives of the Group in 2024. None of the bonus awarded to Viktor Gladun or Arfan Khan was in relation to the
appreciation or depreciation of the Company’s share price. No other Executive Directors received bonuses in respect of 2025 or 2024.
4 Awards were released under the Management Incentive Plan (MIP) in 2024 and 2025.
5 The Company did not operate a pension scheme for Executive Directors in 2025 or 2024 but may make a pension contribution or a payment in lieu of pension contributions to Executive
Directors under their employment contracts as executives of the Group as opposed to under their service agreements as Directors of the Company. The total amount paid to Executive
Directors in 2025 in lieu of pension contributions was US$ 50,633 (2024: US$ 56,159). Executive Directors are not entitled to any additional benefit if they retire early.
6 Viktor Gladun was appointed as CEO effective from 15 July 2025. The figures in the table include his remuneration during 2025 as a Non-executive director in the amount of US$53,794, prior
to appointment as a CEO.
Notes on the single total figure of remuneration table
Base salaries
Executive Directors’ salaries were considered by the Committee at the
time of appointment to post in 2020 and 2021. When reviewing
salaries, the Committee considered the provisions of the
Remuneration Policy and the situation of the Company. By decision of
the Remuneration Committee on 10 April 2025, Mr Khan’s salary was
increased by 20% to GBP 540,000, effective 1 April 2025. By decision
of the Board following Mr Khan’s departure on 30 June 2025 and the
appointment of Mr Gladun on 15 July 2025, Mr Gladun’s salary was
agreed to be GBP 500,000.
Annual bonus
Mr Gladun is the only person who served as an Executive Director
during 2025 who has been assessed for a bonus. The assessment was
prepared by the Remuneration Committee and was considered and
agreed by the Committee on 14 April 2026. It was determined that
70% of the 2025 KPIs had been achieved over the period 15 July 2025
to 31 December 2025 (GBP 160,417 or US$ 216,851). In addition, it
was determined to award Mr Gladun an exceptional discretionary
bonus of GBP 163,596 (US$221,149) in recognition of his efforts
during 2025.
In accordance with the Remuneration Policy approved on 11 July
2024, the maximum annual bonus opportunity for Mr Gladun in
respect of 2025 was 240% of base compensation. The maximum
annual bonus opportunity of the CEO for achievement against key
performance indicators in 2025 under his service agreement was
100% of the base compensation.
83 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Single total figure of remuneration
The table below shows the single total figure of remuneration for the year ended 31 December 2025 for each Director that served at any time
during the year. The information contained in the table is as prescribed by the Large and Medium-sized Companies and Groups (Accounts and
Reports) (Amendment) Regulations 2013 and contains a single total figure of remuneration for each Director.
Directors are remunerated in either GBP, US$ or KZT 1 . All figures in relation to Director remuneration are reported in USD throughout this report.
Director Period
Salary
and fees
Taxable
benefits 2 Annual
bonus 3 MIP1 4 MIP2 4 Pension 5 Total
(audited)
Total
fixed
remuneration
Total
variable
remuneration
Stephen Whyte 2025 247,974 − − 274,295 1,898,024 − 2,420,293 247,974 2,172,319
(until 16 October 2025) 2024 303,515 − − 137,148 − − 440,662 303,515 137,148
Nikolay Ivin 2025 92,211 − − − − − 92,211 92,211 −
(from 15 July 2025) 2024 − − − − − − − − −
Arfan Khan 2025 724,467 23,710 − 423,943 2,933,536 24,749 4,130,405 772,926 3,357,479
(until 30 June 2025) 2024 573,043 29,306 583,556 233,169 − 56,159 1,475,233 658,508 816,725
Viktor Gladun 6 2025 390,390 11,735 438,000 − − 25,884 812,215 374,215 438,000
2024 37,366 − − − − − 37,366 37,366 −
Fiona Paulus 2025 110,000 − − 97,647 675,672 − 883,319 110,000 773,319
2024 110,000 − − 48,823 − − 158,823 110,000 48,823
Chris Cox 2025 − − − − − − − − −
(Until 31 May 2024) 2024 75,833 − − − − − 75,833 75,833 −
Chris Hopkinson 2025 85,150 − − 97,647 675,672 − 858,469 85,150 773,319
(Until 30 June 2025) 2024 110,000 − − 48,823 − − 158,823 110,000 48,823
Martin Gudgeon 2025 110,000 − − 97,647 675,672 − 883,319 110,000 773,319
2024 104,167 − − 48,823 − − 152,989 104,167 48,823
James Hart 2025 28,270 − − − − − 28,270 28,270 −
(from 23 October 2025) 2024 − − − − − − − − −
Robert Wynne 2025 16,166 − − − − − 16,166 16,166 −
(from 20 November 2025) 2024 − − − − − − − − −
1 Stephen Whyte, Nikolay Ivin and Viktor Gladun were remunerated in GBP and US$, Fiona Paulus, Chris Hopkinson and Martin Gudgeon, were remunerated in US$, James Hart and Robert
Wynne were remunerated in GBP, Arfan Khan was remunerated in GBP and KZT. For the purposes of this table, the following exchange rates have been used:
2025: GBP: EUR 1.172; EUR: US$1.123; US$: KZT 524.92
2024: GBP: EUR 1.179; EUR: US$1.085; US$: KZT 503.82
2 Taxable benefits include travel, medical, disability insurances and other benefits.
3 Viktor Gladun received a bonus for his contribution to the operating, commercial, strategic and environmental objectives of the Group in 2025. Arfan Khan received a bonus for his
contribution to the operating, commercial, strategic and environmental objectives of the Group in 2024. None of the bonus awarded to Viktor Gladun or Arfan Khan was in relation to the
appreciation or depreciation of the Company’s share price. No other Executive Directors received bonuses in respect of 2025 or 2024.
4 Awards were released under the Management Incentive Plan (MIP) in 2024 and 2025.
5 The Company did not operate a pension scheme for Executive Directors in 2025 or 2024 but may make a pension contribution or a payment in lieu of pension contributions to Executive
Directors under their employment contracts as executives of the Group as opposed to under their service agreements as Directors of the Company. The total amount paid to Executive
Directors in 2025 in lieu of pension contributions was US$ 50,633 (2024: US$ 56,159). Executive Directors are not entitled to any additional benefit if they retire early.
6 Viktor Gladun was appointed as CEO effective from 15 July 2025. The figures in the table include his remuneration during 2025 as a Non-executive director in the amount of US$53,794, prior
to appointment as a CEO.
Notes on the single total figure of remuneration table
Base salaries
Executive Directors’ salaries were considered by the Committee at the
time of appointment to post in 2020 and 2021. When reviewing
salaries, the Committee considered the provisions of the
Remuneration Policy and the situation of the Company. By decision of
the Remuneration Committee on 10 April 2025, Mr Khan’s salary was
increased by 20% to GBP 540,000, effective 1 April 2025. By decision
of the Board following Mr Khan’s departure on 30 June 2025 and the
appointment of Mr Gladun on 15 July 2025, Mr Gladun’s salary was
agreed to be GBP 500,000.
Annual bonus
Mr Gladun is the only person who served as an Executive Director
during 2025 who has been assessed for a bonus. The assessment was
prepared by the Remuneration Committee and was considered and
agreed by the Committee on 14 April 2026. It was determined that
70% of the 2025 KPIs had been achieved over the period 15 July 2025
to 31 December 2025 (GBP 160,417 or US$ 216,851). In addition, it
was determined to award Mr Gladun an exceptional discretionary
bonus of GBP 163,596 (US$221,149) in recognition of his efforts
during 2025.
In accordance with the Remuneration Policy approved on 11 July
2024, the maximum annual bonus opportunity for Mr Gladun in
respect of 2025 was 240% of base compensation. The maximum
annual bonus opportunity of the CEO for achievement against key
performance indicators in 2025 under his service agreement was
100% of the base compensation.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
84
CORPORATE GOVERNANCE
All bonuses are discretionary and can be reduced from the maximum
annual bonus opportunity level for reasons such as poor performance
by the employee or due to disappointing financial performance of the
Group as a whole.
The key performance indicators for annual cash bonuses for the CEO
were as follows:
2025 bonus performance measures Weight
NFA Operations and Costs 50%
Achieve annual CHN No-Further-Activity PDP volume
available for sales from low-side of 5,652 boepd (0%) to
high-side of 6,229 boepd (100 %), sliding scale.
20%
Low Pressure System 3 project: Mechanical completion
and operationalize the two spare Gas Compressors in
GTU/3 through interconnecting pipelines with an incident
free start-up, no HSE incidents (LTI) & within budget.
5%
NFA Cost Focus. Opex $37.9mln & G&A US$10.8m total
US$48.7m. 0% if any increases, 30% if flat, and 100% if
lower by US$0.25m, sliding scale.
10%
Drill, Complete and Deliver wells CH-116_1 and CH-725_1
to planned mechanical objectives and within the
approved budget. Weighting split 7.5% for budget target
and 7.5% for at least one well success. Sliding scale from
100% (under/on budget) to 0%
(10% or more over budget).
15%
Strategic Objectives 40%
A commercially sensitive strategic target, therefore not
disclosed 1 10%
A commercially sensitive strategic target, therefore not
disclosed 1 10%
A commercially sensitive strategic target, therefore not
disclosed 1 20%
HSE 10%
Target: Achievement of the GHG emissions & safety KPIs
provided that there have been no fatalities. In the case of
a fatality, 10% additional will be deducted from the overall
weighting.
KPIs:
• GHG emissions: not to exceed forecast target of
290,209 tons of CO 2 (or equivalent level)
• Safety KPIs: LTI < 1.15; RTI < 1.0; TRIF < 2.0
10%
Total 100%
1 In certain cases information on performance measures or targets has been omitted
because it is commercially sensitive and disclosure of such information may not be in the
Company’s interest. Such information may be reported in the subsequent annual report if
the performance measure or target has been met and the Company considers that
disclosure of such information at such time would not be contrary to the Company’s
interest.
The Committee considered the performance of the CEO in the period
15 July to 31 December 2025. Operations and costs KPIs were partly
satisfied (40% out of a possible 50%), the strategic KPIs were partly
met (20% out of a possible 40%) and HSE KPIs were met (10% out of a
possible 10%), resulting in the conclusion that 70% of the 2025 KPIs
had been achieved over the year 2025.
Management Incentive Plan (MIP)
The remuneration policy approved on 11 July 2024 provided that over
the entire duration of the MIP aggregate MIP payments to the CEO
may not exceed 16 times his current maximum base salary.
The remuneration policy approved on 11 July 2024 also provided that
over the entire duration of the MIP aggregate MIP payments: (a) to
the Chairman may not exceed 19 times his current annual director’s
fees, and (b) to each of the other non-executive directors may not
exceed 19 times the current level of annual director’s fees payable to
non-executive directors other than the Chairman.
Following the vote against the remuneration report at the 2025 AGM
the Company is taking independent legal advice in relation to
historical MIP payments in order to inform the steps it takes to
address the concerns of the Company’s stakeholders. The Company
intends to further develop a new remuneration framework in 2026
that appropriately aligns remuneration of the management and board
with the strategic objectives of the Company.
Pension entitlements
The Company did not operate a pension scheme for Executive
Directors in 2025 but may make a contribution to a private pension
fund or a payment in lieu of pension contributions to Executive
Directors, under their employment contracts as executives of the
Group as opposed to under their service agreements as Directors of
the Company.
Payments to past Directors
The following payments were made to past directors of the Company
during the year ended 31 December 2025:
Director Amount in US$
Arfan Khan 614,602
Chris Hopkinson 81,497
Stephen Whyte 84,345
Payments for loss of office
No payments were made to Directors in 2025 for loss of office.
Non-executive Director fees
In 2025, Non- executive Director fees were as follows:
Nikolay Ivin 100K USD per annum from 15 July 2025 until 16
October 2025
From 16 October 2025, 230K GBP per annum, plus
10K GBP per annum for chairmanship of Strategy
Committee
Viktor Gladun 100K USD per annum until 15 July 2025
Martin Gudgeon 100K USD per annum, plus (until 20 November 2025)
10K USD per annum for chairmanship of Nomination
and Governance Committee
James Hart From 23 October 2025, 100K GBP per annum, plus
10K GBP per annum for chairmanship of
Remuneration Committee
Robert Wynne From 20 November 2025, 100K USD per annum, plus
10K USD per annum for chairmanship of each of
Audit Committee and Nomination & Governance
Committee
Fiona Paulus 100K USD per annum, plus 10K USD per annum for
chairmanship of Audit Committee
Stephen Whyte 230K GBP per annum, plus 10K USD per annum for
chairmanship of Strategy Committee, both until 16
October 2025
Chris Hopkinson 100K USD per annum, plus 10K USD per annum for
chairmanship of Remuneration Committee both
until 30 June 2025
CORPORATE GOVERNANCE
All bonuses are discretionary and can be reduced from the maximum
annual bonus opportunity level for reasons such as poor performance
by the employee or due to disappointing financial performance of the
Group as a whole.
The key performance indicators for annual cash bonuses for the CEO
were as follows:
2025 bonus performance measures Weight
NFA Operations and Costs 50%
Achieve annual CHN No-Further-Activity PDP volume
available for sales from low-side of 5,652 boepd (0%) to
high-side of 6,229 boepd (100 %), sliding scale.
20%
Low Pressure System 3 project: Mechanical completion
and operationalize the two spare Gas Compressors in
GTU/3 through interconnecting pipelines with an incident
free start-up, no HSE incidents (LTI) & within budget.
5%
NFA Cost Focus. Opex $37.9mln & G&A US$10.8m total
US$48.7m. 0% if any increases, 30% if flat, and 100% if
lower by US$0.25m, sliding scale.
10%
Drill, Complete and Deliver wells CH-116_1 and CH-725_1
to planned mechanical objectives and within the
approved budget. Weighting split 7.5% for budget target
and 7.5% for at least one well success. Sliding scale from
100% (under/on budget) to 0%
(10% or more over budget).
15%
Strategic Objectives 40%
A commercially sensitive strategic target, therefore not
disclosed 1 10%
A commercially sensitive strategic target, therefore not
disclosed 1 10%
A commercially sensitive strategic target, therefore not
disclosed 1 20%
HSE 10%
Target: Achievement of the GHG emissions & safety KPIs
provided that there have been no fatalities. In the case of
a fatality, 10% additional will be deducted from the overall
weighting.
KPIs:
• GHG emissions: not to exceed forecast target of
290,209 tons of CO 2 (or equivalent level)
• Safety KPIs: LTI < 1.15; RTI < 1.0; TRIF < 2.0
10%
Total 100%
1 In certain cases information on performance measures or targets has been omitted
because it is commercially sensitive and disclosure of such information may not be in the
Company’s interest. Such information may be reported in the subsequent annual report if
the performance measure or target has been met and the Company considers that
disclosure of such information at such time would not be contrary to the Company’s
interest.
The Committee considered the performance of the CEO in the period
15 July to 31 December 2025. Operations and costs KPIs were partly
satisfied (40% out of a possible 50%), the strategic KPIs were partly
met (20% out of a possible 40%) and HSE KPIs were met (10% out of a
possible 10%), resulting in the conclusion that 70% of the 2025 KPIs
had been achieved over the year 2025.
Management Incentive Plan (MIP)
The remuneration policy approved on 11 July 2024 provided that over
the entire duration of the MIP aggregate MIP payments to the CEO
may not exceed 16 times his current maximum base salary.
The remuneration policy approved on 11 July 2024 also provided that
over the entire duration of the MIP aggregate MIP payments: (a) to
the Chairman may not exceed 19 times his current annual director’s
fees, and (b) to each of the other non-executive directors may not
exceed 19 times the current level of annual director’s fees payable to
non-executive directors other than the Chairman.
Following the vote against the remuneration report at the 2025 AGM
the Company is taking independent legal advice in relation to
historical MIP payments in order to inform the steps it takes to
address the concerns of the Company’s stakeholders. The Company
intends to further develop a new remuneration framework in 2026
that appropriately aligns remuneration of the management and board
with the strategic objectives of the Company.
Pension entitlements
The Company did not operate a pension scheme for Executive
Directors in 2025 but may make a contribution to a private pension
fund or a payment in lieu of pension contributions to Executive
Directors, under their employment contracts as executives of the
Group as opposed to under their service agreements as Directors of
the Company.
Payments to past Directors
The following payments were made to past directors of the Company
during the year ended 31 December 2025:
Director Amount in US$
Arfan Khan 614,602
Chris Hopkinson 81,497
Stephen Whyte 84,345
Payments for loss of office
No payments were made to Directors in 2025 for loss of office.
Non-executive Director fees
In 2025, Non- executive Director fees were as follows:
Nikolay Ivin 100K USD per annum from 15 July 2025 until 16
October 2025
From 16 October 2025, 230K GBP per annum, plus
10K GBP per annum for chairmanship of Strategy
Committee
Viktor Gladun 100K USD per annum until 15 July 2025
Martin Gudgeon 100K USD per annum, plus (until 20 November 2025)
10K USD per annum for chairmanship of Nomination
and Governance Committee
James Hart From 23 October 2025, 100K GBP per annum, plus
10K GBP per annum for chairmanship of
Remuneration Committee
Robert Wynne From 20 November 2025, 100K USD per annum, plus
10K USD per annum for chairmanship of each of
Audit Committee and Nomination & Governance
Committee
Fiona Paulus 100K USD per annum, plus 10K USD per annum for
chairmanship of Audit Committee
Stephen Whyte 230K GBP per annum, plus 10K USD per annum for
chairmanship of Strategy Committee, both until 16
October 2025
Chris Hopkinson 100K USD per annum, plus 10K USD per annum for
chairmanship of Remuneration Committee both
until 30 June 2025
2025 ANNUAL REPORT ON REMUNERATION
85 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Directors’ shareholdings
The beneficial interests of the Directors in the share capital of the
Company as at 31 December 2025 were as follows:
Director Total (audited)
Viktor Gladun −
Martin Gudgeon −
James Hart −
Nikolay Ivin −
Fiona Paulus −
Robert Wynne 15,987,596
The Company has not been notified of any change in Directors’
shareholdings since 31 December 2025.
Please refer to the text in the Remuneration Policy table on pages 89-
90 in relation to shareholding guidelines applicable to Directors.
No shares have been granted to Directors so there was no
requirement on any Director to hold them in accordance with the
guidelines. The Company’s sole Executive Director Arfan Khan until 30
June 2025 and Viktor Gladun from 15 July 2025 did not hold any
shares in 2025 as encouraged by the guidelines.
Phantom share option plan
The Company operates one non- performance-related phantom share
option plan (the Plan). There are no outstanding options to Directors.
No awards were made under the Plan in 2025 (2024: nil).
It is not currently envisaged to make any further awards under the
Plan.
Long-term incentive plan
On 24 August 2017, the Board approved the making of certain initial
grants under the Company’s long-term incentive plan (LTIP). Awards
under the LTIP were made in 2017 and 2018 but no further awards
were made thereafter or are currently envisaged under the LTIP.
In accordance with the LTIP rules, all outstanding options that had
been issued to two Executive Directors, Mr Kessel and
Mr Richardson, who left the Company on 16 December 2019 and 31
March 2020, respectively, lapsed as of 16 December 2019 and 30
March 2021, respectively.
All Non-Executive Directors who had been granted awards under the
LTIP (including Atul Gupta) have formally renounced such awards and
the Company has amended the terms of its LTIP to make Non-
Executive Directors ineligible to participate in the LTIP.
Remuneration statistics and comparisons
The following performance graph shows the growth in value of a
notional £100 invested in the Company since the premium listing of
the Company compared with the growth in the FTSE 350 Oil & Gas
Index over the same period.
The Committee selected the FTSE 350 Oil & Gas Index as the most
appropriate comparator as it feels that it is a broad-based index which
includes many of the Company’s competitors.
Source: Refinitiv
History of Chief Executive Officer remuneration
The total remuneration figures compared with a respective maximum
opportunity for the CEO during each of the last ten financial years are
shown in the table below. Kai-Uwe Kessel was in the position for the
period 1 January 2014 to 16 December 2019, Kaat Van Hecke was the
CEO from 16 December 2019 to 31 August 2020 and Atul Gupta from
1 September to 25 January 2021.
The total CEO remuneration figure for 2020 therefore includes all
amounts paid to Kaat van Hecke for the period 1 January 2020 to 31
August 2020 and Atul Gupta for the period 1 September 2020 to 31
December 2020 for CEO services provided to the Group. Mr Gupta
remained as Executive Chairman throughout the period 1 September
2020 to 25 January 2021. Therefore, the amount attributed to his role
as CEO is the incremental value in his remuneration only, which was
the pension contribution.
Please refer to the single total figure of remuneration table on page
83 for more information.
Year Amount in US$
Annual bonus
as % of maximum
opportunity
MIP as % of
maximum
opportunity
2015 1,078,059 80.00% 1 −
2016 1,013,718 75.00% −
2017 1,004,305 31.25% −
2018 732,271 0.00% −
2019 2 1,577,014 0.00% −
2020 3 1,284,577 60.33% −
2021 4 948,525 12.61% −
2022 1,453,649 53.13% −
2023 1,535,511 58.14% −
2024 1,475,233 58.73% 2.54%
2025 4,996,414 54.22% 28.97%
1 These figures include a bonus amount of EUR 236,262 paid in 2015 in respect of 2014
performance. No bonuses were paid for 2015 performance.
2 The amounts published in 2021 in respect of payments to Kaat Van Hecke in 2019 have
been corrected to include the amount of EUR 32,006 paid to her spouse in 2019.
3 The amounts published in 2021 in respect of payments to Kaat Van Hecke in 2020 have
been corrected to include amount of EUR 423,031 paid to her spouse in 2020.
4 Kaat Van Hecke was CEO from 16 December 2019 to 31 August 2020. Atul Gupta
discharged the role of CEO from 1 September 2020 to 25 January 2021 but received no
increment in salary, benefits or annual bonus as a result of assuming this role as well as
that of Executive Chairman. Therefore, the figures for the remuneration of the CEO in
2019, 2020 and 2021 reflect only the amounts paid to Kaat Van Hecke (and her spouse)
and Arfan Khan.
0
20
40
60
80
100
120
Jun 14
Sep 14
Dec 14
Mar 15
Jun 15
Sep 15
Dec 15
Mar 16
Jun 16
Sep 16
Dec 16
Mar 17
Jun 17
Sep 17
Dec 17
Mar 18
Jun 18
Sep 18
Dec 18
Mar 19
Jun 19
Sep 19
Dec 19
Mar 20
Jun 20
Sep 20
Dec 20
Mar 21
Jun 21
Sep 21
Dec 21
Mar 22
Jun 22
Sep 22
Dec 22
Mar 23
Jun 23
Sep 23
Dec 23
Mar 24
Jun 24
Sep 24
Dec 24
Mar 25
Jun 25
Sep 25
Dec 25
Total Share Return
Nostrum O&G (dividends received) Nostrum O&G (dividends re-invested) FTSE 350 Oil & Gas
85 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Directors’ shareholdings
The beneficial interests of the Directors in the share capital of the
Company as at 31 December 2025 were as follows:
Director Total (audited)
Viktor Gladun −
Martin Gudgeon −
James Hart −
Nikolay Ivin −
Fiona Paulus −
Robert Wynne 15,987,596
The Company has not been notified of any change in Directors’
shareholdings since 31 December 2025.
Please refer to the text in the Remuneration Policy table on pages 89-
90 in relation to shareholding guidelines applicable to Directors.
No shares have been granted to Directors so there was no
requirement on any Director to hold them in accordance with the
guidelines. The Company’s sole Executive Director Arfan Khan until 30
June 2025 and Viktor Gladun from 15 July 2025 did not hold any
shares in 2025 as encouraged by the guidelines.
Phantom share option plan
The Company operates one non- performance-related phantom share
option plan (the Plan). There are no outstanding options to Directors.
No awards were made under the Plan in 2025 (2024: nil).
It is not currently envisaged to make any further awards under the
Plan.
Long-term incentive plan
On 24 August 2017, the Board approved the making of certain initial
grants under the Company’s long-term incentive plan (LTIP). Awards
under the LTIP were made in 2017 and 2018 but no further awards
were made thereafter or are currently envisaged under the LTIP.
In accordance with the LTIP rules, all outstanding options that had
been issued to two Executive Directors, Mr Kessel and
Mr Richardson, who left the Company on 16 December 2019 and 31
March 2020, respectively, lapsed as of 16 December 2019 and 30
March 2021, respectively.
All Non-Executive Directors who had been granted awards under the
LTIP (including Atul Gupta) have formally renounced such awards and
the Company has amended the terms of its LTIP to make Non-
Executive Directors ineligible to participate in the LTIP.
Remuneration statistics and comparisons
The following performance graph shows the growth in value of a
notional £100 invested in the Company since the premium listing of
the Company compared with the growth in the FTSE 350 Oil & Gas
Index over the same period.
The Committee selected the FTSE 350 Oil & Gas Index as the most
appropriate comparator as it feels that it is a broad-based index which
includes many of the Company’s competitors.
Source: Refinitiv
History of Chief Executive Officer remuneration
The total remuneration figures compared with a respective maximum
opportunity for the CEO during each of the last ten financial years are
shown in the table below. Kai-Uwe Kessel was in the position for the
period 1 January 2014 to 16 December 2019, Kaat Van Hecke was the
CEO from 16 December 2019 to 31 August 2020 and Atul Gupta from
1 September to 25 January 2021.
The total CEO remuneration figure for 2020 therefore includes all
amounts paid to Kaat van Hecke for the period 1 January 2020 to 31
August 2020 and Atul Gupta for the period 1 September 2020 to 31
December 2020 for CEO services provided to the Group. Mr Gupta
remained as Executive Chairman throughout the period 1 September
2020 to 25 January 2021. Therefore, the amount attributed to his role
as CEO is the incremental value in his remuneration only, which was
the pension contribution.
Please refer to the single total figure of remuneration table on page
83 for more information.
Year Amount in US$
Annual bonus
as % of maximum
opportunity
MIP as % of
maximum
opportunity
2015 1,078,059 80.00% 1 −
2016 1,013,718 75.00% −
2017 1,004,305 31.25% −
2018 732,271 0.00% −
2019 2 1,577,014 0.00% −
2020 3 1,284,577 60.33% −
2021 4 948,525 12.61% −
2022 1,453,649 53.13% −
2023 1,535,511 58.14% −
2024 1,475,233 58.73% 2.54%
2025 4,996,414 54.22% 28.97%
1 These figures include a bonus amount of EUR 236,262 paid in 2015 in respect of 2014
performance. No bonuses were paid for 2015 performance.
2 The amounts published in 2021 in respect of payments to Kaat Van Hecke in 2019 have
been corrected to include the amount of EUR 32,006 paid to her spouse in 2019.
3 The amounts published in 2021 in respect of payments to Kaat Van Hecke in 2020 have
been corrected to include amount of EUR 423,031 paid to her spouse in 2020.
4 Kaat Van Hecke was CEO from 16 December 2019 to 31 August 2020. Atul Gupta
discharged the role of CEO from 1 September 2020 to 25 January 2021 but received no
increment in salary, benefits or annual bonus as a result of assuming this role as well as
that of Executive Chairman. Therefore, the figures for the remuneration of the CEO in
2019, 2020 and 2021 reflect only the amounts paid to Kaat Van Hecke (and her spouse)
and Arfan Khan.
0
20
40
60
80
100
120
Jun 14
Sep 14
Dec 14
Mar 15
Jun 15
Sep 15
Dec 15
Mar 16
Jun 16
Sep 16
Dec 16
Mar 17
Jun 17
Sep 17
Dec 17
Mar 18
Jun 18
Sep 18
Dec 18
Mar 19
Jun 19
Sep 19
Dec 19
Mar 20
Jun 20
Sep 20
Dec 20
Mar 21
Jun 21
Sep 21
Dec 21
Mar 22
Jun 22
Sep 22
Dec 22
Mar 23
Jun 23
Sep 23
Dec 23
Mar 24
Jun 24
Sep 24
Dec 24
Mar 25
Jun 25
Sep 25
Dec 25
Total Share Return
Nostrum O&G (dividends received) Nostrum O&G (dividends re-invested) FTSE 350 Oil & Gas
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
86
CORPORATE GOVERNANCE
Annual percentage change in Director and average employee remuneration
The table below shows the percentage changes in the salary, benefits and annual bonus of the Directors compared to the percentage increases of
the workforce as a whole for each financial year beginning on or after 10 June 2019.
2025
USD
2025 to
2024
% change
2024
USD
2024 to
2023
% change
2023
USD
2023 to
2022
% change
2022
USD
2022 to
2021
% change
2021
USD
2021 to
2020
% change
2020
USD
Executive Directors (USD)
Executive Chairman 1 Salaries − − 37,500 (93.0%) 538,748 3.9% 518,575 3.9% 512,203 (0.1%) 512,776
Taxable benefits − − 130 (96.7%) 3,967 2.0% 3,888 2.0% 4,209 705.6% 522
Annual bonus − − − − − − − − − − −
Chief Executive Officer 2 Salaries 1,061,063 85.2% 573,043 (16.5%) 686,555 0.4% 683,814 0.1% 683,330 (37.9%) 1,100,965
Taxable benefits 35,445 20.9% 29,306 4.0% 28,183 104.8% 13,763 (70.2%) 46,124 255.2% 12,985
Annual bonus 438,000 (24.9%) 583,556 (70.9%) 780,395 8.9% 716,919 309.7% 175,000 50.3% 116,405
Chief Financial Officer 3,4 Salaries − − − − − − − − 446,338 (47.6%) 851,099
Taxable benefits − − − − − − − − − (100.0%) 3,530
Annual bonus − − − − − − − − − − −
Non-Executive Directors (USD)
Nikolay Ivin Salaries 92,211 − − − − − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
James Hart Salaries 28,270 − − − − − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Robert Wynne Salaries 16,166 − − − − − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Viktor Gladun Salaries 53,794 44.0% 37,366 − − − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Martin Gudgeon Salaries 110,000 5.6% 104,167 13.6% 91,667 − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Fiona Paulus Salaries 110,000 0.0% 110,000 14.7% 95,897 − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Stephen Whyte Salaries 247,974 (18.3%) 303,515 17.2% 259,038 − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Chris Hopkinson Salaries 85,150 (22.6%) 110,000 14.7% 95,897 − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Chris Cox Salaries − − 75,833 (20.9%) 95,897 − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Sir Christopher Codrington Bt Salaries − − − − − − 120,000 − 120,000 27.5% 94,098
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Kaat Van Hecke Salaries − − − − − − 120,000 − 120,000 300.4% 29,968
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Martin Cocker Salaries − − − − − − 120,000 − 40,000 45.5% 27,500
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Mark Martin Salaries − − − − − − − − − − 51,023
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Michael Calvey Salaries − − − − − − − − − − 25,000
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Simon Byrne Salaries − − − − − − − − − − 25,000
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Employees of the Group on an FTE basis
Salaries 24,617 (1.9%) 25,096 18.6% 21,156 13.0% 18,729 (0.3%) 18,781 (8.2%) 20,469
Taxable benefits 2,243 (2.8%) 2,307 53.7% 1,501 11.2% 1,350 (12.0%) 1,533 63.4% 938
Taxable benefits 3,072 (17.9%) 3,742 8.4% 3,451 45.5% 2,372 19.2% 1,989 54.7% 1,286
Annual bonus 15,966 1498.2% 999 100.0% (25) (34.2%) (38) (84.6%) (247) 0.0% −
1 Amounts paid to the Executive Chairman in 2023 represent remuneration paid to Atul Gupta until 14 February 2023 and payments in lieu of 12 months’ notice as monthly equal instalments
over 12-month period following the end of his term of service on 14 February 2023.
2 Kaat Van Hecke was CEO from 16 December 2019 to 31 August 2020. Atul Gupta discharged the role of CEO from 1 September 2020 to 25 January 2021 but received no increment in salary,
benefits or annual bonus as a result of assuming this role as well as that of Executive Chairman. Therefore, the figures for the remuneration of the CEO in 2019, 2020 and 2021 reflect only
the amounts paid to Kaat Van Hecke (and her spouse) and Arfan Khan.
3 The CFO was not a Director in 2022, 2023, 2024 and 2025.
4 The amounts published in 2021 in respect of payments to Mr Richardson in 2020 have been corrected to include amounts paid to his spouse in 2020. The amounts for 2021 only include
Chief Financial Officer’s compensation up until 30 August 2021, at which time the position was removed as an Executive Director.
CORPORATE GOVERNANCE
Annual percentage change in Director and average employee remuneration
The table below shows the percentage changes in the salary, benefits and annual bonus of the Directors compared to the percentage increases of
the workforce as a whole for each financial year beginning on or after 10 June 2019.
2025
USD
2025 to
2024
% change
2024
USD
2024 to
2023
% change
2023
USD
2023 to
2022
% change
2022
USD
2022 to
2021
% change
2021
USD
2021 to
2020
% change
2020
USD
Executive Directors (USD)
Executive Chairman 1 Salaries − − 37,500 (93.0%) 538,748 3.9% 518,575 3.9% 512,203 (0.1%) 512,776
Taxable benefits − − 130 (96.7%) 3,967 2.0% 3,888 2.0% 4,209 705.6% 522
Annual bonus − − − − − − − − − − −
Chief Executive Officer 2 Salaries 1,061,063 85.2% 573,043 (16.5%) 686,555 0.4% 683,814 0.1% 683,330 (37.9%) 1,100,965
Taxable benefits 35,445 20.9% 29,306 4.0% 28,183 104.8% 13,763 (70.2%) 46,124 255.2% 12,985
Annual bonus 438,000 (24.9%) 583,556 (70.9%) 780,395 8.9% 716,919 309.7% 175,000 50.3% 116,405
Chief Financial Officer 3,4 Salaries − − − − − − − − 446,338 (47.6%) 851,099
Taxable benefits − − − − − − − − − (100.0%) 3,530
Annual bonus − − − − − − − − − − −
Non-Executive Directors (USD)
Nikolay Ivin Salaries 92,211 − − − − − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
James Hart Salaries 28,270 − − − − − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Robert Wynne Salaries 16,166 − − − − − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Viktor Gladun Salaries 53,794 44.0% 37,366 − − − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Martin Gudgeon Salaries 110,000 5.6% 104,167 13.6% 91,667 − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Fiona Paulus Salaries 110,000 0.0% 110,000 14.7% 95,897 − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Stephen Whyte Salaries 247,974 (18.3%) 303,515 17.2% 259,038 − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Chris Hopkinson Salaries 85,150 (22.6%) 110,000 14.7% 95,897 − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Chris Cox Salaries − − 75,833 (20.9%) 95,897 − − − − − −
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Sir Christopher Codrington Bt Salaries − − − − − − 120,000 − 120,000 27.5% 94,098
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Kaat Van Hecke Salaries − − − − − − 120,000 − 120,000 300.4% 29,968
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Martin Cocker Salaries − − − − − − 120,000 − 40,000 45.5% 27,500
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Mark Martin Salaries − − − − − − − − − − 51,023
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Michael Calvey Salaries − − − − − − − − − − 25,000
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Simon Byrne Salaries − − − − − − − − − − 25,000
Taxable benefits − − − − − − − − − − −
Annual bonus − − − − − − − − − − −
Employees of the Group on an FTE basis
Salaries 24,617 (1.9%) 25,096 18.6% 21,156 13.0% 18,729 (0.3%) 18,781 (8.2%) 20,469
Taxable benefits 2,243 (2.8%) 2,307 53.7% 1,501 11.2% 1,350 (12.0%) 1,533 63.4% 938
Taxable benefits 3,072 (17.9%) 3,742 8.4% 3,451 45.5% 2,372 19.2% 1,989 54.7% 1,286
Annual bonus 15,966 1498.2% 999 100.0% (25) (34.2%) (38) (84.6%) (247) 0.0% −
1 Amounts paid to the Executive Chairman in 2023 represent remuneration paid to Atul Gupta until 14 February 2023 and payments in lieu of 12 months’ notice as monthly equal instalments
over 12-month period following the end of his term of service on 14 February 2023.
2 Kaat Van Hecke was CEO from 16 December 2019 to 31 August 2020. Atul Gupta discharged the role of CEO from 1 September 2020 to 25 January 2021 but received no increment in salary,
benefits or annual bonus as a result of assuming this role as well as that of Executive Chairman. Therefore, the figures for the remuneration of the CEO in 2019, 2020 and 2021 reflect only
the amounts paid to Kaat Van Hecke (and her spouse) and Arfan Khan.
3 The CFO was not a Director in 2022, 2023, 2024 and 2025.
4 The amounts published in 2021 in respect of payments to Mr Richardson in 2020 have been corrected to include amounts paid to his spouse in 2020. The amounts for 2021 only include
Chief Financial Officer’s compensation up until 30 August 2021, at which time the position was removed as an Executive Director.
2025 ANNUAL REPORT ON REMUNERATION
87 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Relative importance of spend on pay
The table below shows the Group’s actual spend on pay (for all
employees) relative to dividends.
Key expenditure areas in thousands of US$ 2025 2024 % change
Remuneration paid to all employees 1 45,898 32,144 42.8%
Dividends to shareholders (total) − − 0%
Dividends − − 0%
Share buy-back − − 0%
1 Total remuneration reflects overall payroll and related taxes. Refer to the consolidated
financial statements for further information.
For further information on dividends and expenditure on
remuneration for all employees, please see the notes to the
consolidated financial statements.
Service contracts
Details of the Executive Directors’ service agreements’ and the Non-
Executive Directors’ letters of appointment can be found in the
Company’s Remuneration Policy on pages 89-93 of this Annual
Report. All Directors are subject to annual reappointment and
accordingly all executive and Non-Executive Directors will stand for
election or re-election (as appropriate) at the Annual General
Meeting.
Statement of Remuneration Policy implementation
The Company’s Remuneration Policy was put to a shareholder vote at
the General Meeting on 11 July 2024 and was approved by 99.77% of
votes cast.
Salaries and bonuses of the Executive Directors are reviewed and
determined annually to ensure they remain appropriate. The
Company’s bonus year runs from 1 January to 31 December each
year, with bonus amounts usually being determined between
December and March and usually becoming payable between March
and April of each year.
Remuneration in respect of 2026 will be consistent with the new
policy described on pages 89-93 if that new policy is approved at the
Company’s 2026 AGM.
Following the 2026 AGM, it is intended to hold an EGM proposing
further amendments to the directors’ remuneration policy to
introduce a strategic alignment plan.
Salaries and service fees
The Group appointed a new CEO on 15 July 2025. As part of that
process, the level of remuneration to be paid was approved by the
Board.
Annual bonus
In accordance with the remuneration policy approved at the General
Meeting on 11 July 2024, the maximum Executive Director annual
bonus opportunity in respect of 2024 was up to 40% of base
compensation, subject to a maximum opportunity for the Company’s
CEO, of an annual bonus of up to 240% of base compensation and a
maximum opportunity of 100% of base compensation for the
Company’s Chief Financial Officer (if a Director).
Annual performance will be assessed against a performance scorecard
of which a portion is based on operational and financial measures, a
portion on strategic objectives and a portion on HSE, social and
governance objectives.
The Committee has compiled a list of suitable key performance
indicators against which the performance of the Executive Directors
will be measured at the end of 2026 to determine the annual bonus
amounts payable to Executive Directors in 2027. Details of any non-
commercially sensitive KPIs are set out below. 2026 performance will
be measured against these key performance indicators and the
Committee will consider such performance together with the
Company’s financial position, in deciding whether and at what level to
award.
2026 bonus performance measures Weight
Operations and Costs 60%
Target: to achieve annual CHN production volumes from low-side of
5,172 boepd (0%) to high-side of 5,685 boepd (100 %), sliding scale.
NB: The basis for the calculation is most recently prepared production
forecasts.
10%
Target: successful completion of planned scope of facilities shut-
downs and maintenance on time and budget. 5%
Target: (Net Operating Cash Flow) – (Net Investment) = Free Cash
Flow – budget basis with actuals readjusted to negate commodity
price effect
30%
Target: G&A Expenses 5%
Target: to achieve transition to full tolling arrangement by the end of
2026. 10%
Strategic Objectives 30%
A commercially sensitive strategic target, therefore not disclosed 1 5%
A commercially sensitive strategic target, therefore not disclosed 1 15%
A commercially sensitive strategic target, therefore not disclosed 1 10%
HSE 10%
Target: achievement of the GHG emissions & safety KPIs provided
that there have been no fatalities. In the case of a fatality, 10%
additional will be deducted from the overall weighting. KPIs:
• GHG emissions: not to exceed forecast target of 290,209 tons of
CO 2 (or equivalent level), split ZKM 96,996 tons + UOG 193,213
tons.
• Safety KPIs: LTI < 0.5; RTI < 0.5; TRIF < 1.2
10%
Total 100%
1 In certain cases information on performance measures or targets has been omitted
because it is commercially sensitive and disclosure of such information may not be in the
Company’s interest. Such information may be reported in the subsequent annual report if
the performance measure or target has been met and the Company considers that
disclosure of such information at such time would not be contrary to the Company’s
interest.
The percentage result (from the above table of key performance
indicator out of 100%) will be applied to 100% of the CEO’s base
compensation and may also be applied to a percentage up to the
Chief Financial Officer’s maximum opportunity of 100% (if he or she is
appointed as a Director). Currently, no other director is eligible for any
bonus payment relating to 2025 performance based on these
performance measures.
The CEO’s maximum possible total bonus opportunity for 2026 is
240% of base compensation and his bonus opportunity based on the
performance measures in the table above is 100% of base
compensation. If appointed to the Board, the CFO’s maximum
possible total bonus opportunity for 2026 will be 100% of base
compensation.
MIP
Over the entire duration of the MIP aggregate MIP payments to the
CEO may not exceed 16 times his current base salary. Over the entire
duration of the MIP aggregate MIP payments: (a) to the Chairman
may not exceed 19 times his current annual director’s fees, and (b) to
each of the other non-executive directors may not exceed 19 times
the current level of annual director’s fees payable to non-executive
directors other than the Chairman.
87 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Relative importance of spend on pay
The table below shows the Group’s actual spend on pay (for all
employees) relative to dividends.
Key expenditure areas in thousands of US$ 2025 2024 % change
Remuneration paid to all employees 1 45,898 32,144 42.8%
Dividends to shareholders (total) − − 0%
Dividends − − 0%
Share buy-back − − 0%
1 Total remuneration reflects overall payroll and related taxes. Refer to the consolidated
financial statements for further information.
For further information on dividends and expenditure on
remuneration for all employees, please see the notes to the
consolidated financial statements.
Service contracts
Details of the Executive Directors’ service agreements’ and the Non-
Executive Directors’ letters of appointment can be found in the
Company’s Remuneration Policy on pages 89-93 of this Annual
Report. All Directors are subject to annual reappointment and
accordingly all executive and Non-Executive Directors will stand for
election or re-election (as appropriate) at the Annual General
Meeting.
Statement of Remuneration Policy implementation
The Company’s Remuneration Policy was put to a shareholder vote at
the General Meeting on 11 July 2024 and was approved by 99.77% of
votes cast.
Salaries and bonuses of the Executive Directors are reviewed and
determined annually to ensure they remain appropriate. The
Company’s bonus year runs from 1 January to 31 December each
year, with bonus amounts usually being determined between
December and March and usually becoming payable between March
and April of each year.
Remuneration in respect of 2026 will be consistent with the new
policy described on pages 89-93 if that new policy is approved at the
Company’s 2026 AGM.
Following the 2026 AGM, it is intended to hold an EGM proposing
further amendments to the directors’ remuneration policy to
introduce a strategic alignment plan.
Salaries and service fees
The Group appointed a new CEO on 15 July 2025. As part of that
process, the level of remuneration to be paid was approved by the
Board.
Annual bonus
In accordance with the remuneration policy approved at the General
Meeting on 11 July 2024, the maximum Executive Director annual
bonus opportunity in respect of 2024 was up to 40% of base
compensation, subject to a maximum opportunity for the Company’s
CEO, of an annual bonus of up to 240% of base compensation and a
maximum opportunity of 100% of base compensation for the
Company’s Chief Financial Officer (if a Director).
Annual performance will be assessed against a performance scorecard
of which a portion is based on operational and financial measures, a
portion on strategic objectives and a portion on HSE, social and
governance objectives.
The Committee has compiled a list of suitable key performance
indicators against which the performance of the Executive Directors
will be measured at the end of 2026 to determine the annual bonus
amounts payable to Executive Directors in 2027. Details of any non-
commercially sensitive KPIs are set out below. 2026 performance will
be measured against these key performance indicators and the
Committee will consider such performance together with the
Company’s financial position, in deciding whether and at what level to
award.
2026 bonus performance measures Weight
Operations and Costs 60%
Target: to achieve annual CHN production volumes from low-side of
5,172 boepd (0%) to high-side of 5,685 boepd (100 %), sliding scale.
NB: The basis for the calculation is most recently prepared production
forecasts.
10%
Target: successful completion of planned scope of facilities shut-
downs and maintenance on time and budget. 5%
Target: (Net Operating Cash Flow) – (Net Investment) = Free Cash
Flow – budget basis with actuals readjusted to negate commodity
price effect
30%
Target: G&A Expenses 5%
Target: to achieve transition to full tolling arrangement by the end of
2026. 10%
Strategic Objectives 30%
A commercially sensitive strategic target, therefore not disclosed 1 5%
A commercially sensitive strategic target, therefore not disclosed 1 15%
A commercially sensitive strategic target, therefore not disclosed 1 10%
HSE 10%
Target: achievement of the GHG emissions & safety KPIs provided
that there have been no fatalities. In the case of a fatality, 10%
additional will be deducted from the overall weighting. KPIs:
• GHG emissions: not to exceed forecast target of 290,209 tons of
CO 2 (or equivalent level), split ZKM 96,996 tons + UOG 193,213
tons.
• Safety KPIs: LTI < 0.5; RTI < 0.5; TRIF < 1.2
10%
Total 100%
1 In certain cases information on performance measures or targets has been omitted
because it is commercially sensitive and disclosure of such information may not be in the
Company’s interest. Such information may be reported in the subsequent annual report if
the performance measure or target has been met and the Company considers that
disclosure of such information at such time would not be contrary to the Company’s
interest.
The percentage result (from the above table of key performance
indicator out of 100%) will be applied to 100% of the CEO’s base
compensation and may also be applied to a percentage up to the
Chief Financial Officer’s maximum opportunity of 100% (if he or she is
appointed as a Director). Currently, no other director is eligible for any
bonus payment relating to 2025 performance based on these
performance measures.
The CEO’s maximum possible total bonus opportunity for 2026 is
240% of base compensation and his bonus opportunity based on the
performance measures in the table above is 100% of base
compensation. If appointed to the Board, the CFO’s maximum
possible total bonus opportunity for 2026 will be 100% of base
compensation.
MIP
Over the entire duration of the MIP aggregate MIP payments to the
CEO may not exceed 16 times his current base salary. Over the entire
duration of the MIP aggregate MIP payments: (a) to the Chairman
may not exceed 19 times his current annual director’s fees, and (b) to
each of the other non-executive directors may not exceed 19 times
the current level of annual director’s fees payable to non-executive
directors other than the Chairman.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
88
CORPORATE GOVERNANCE
Phantom share option plan
The Committee does not envisage the award of any additional
phantom share options to Executive Directors in 2026.
Long-term incentive plan
The Committee does not envisage any awards under the Company’s
existing long-term incentive plan in 2026. Therefore, no performance
conditions have been set for 2026.
Remuneration Policy
The Company’s current directors’ remuneration policy was approved
by shareholders at the Company’s EGM on 11 July 2024. It is set out in
full on pages 118 through 124 of the 2024 Annual Report. We will be
asking our shareholders to approve a new directors’ remuneration
policy at our 2026 AGM. It is set out in full below.
Policy coverage
This policy applies to all payments to Directors of the Company from
the date of the Company’s 2026 AGM and until the approval of a
revised directors’ remuneration policy.
Following the 2026 AGM, it is intended to hold an EGM proposing
further amendments to the directors’ remuneration policy to
introduce a strategic alignment plan.
Policy objectives
This policy is designed to:
• Provide a structure and level of pay that attracts and retains high-calibre
directors capable of delivering the Company’s strategic objectives.
• Provide clear and transparent performance incentives in a manner that
is consistent with best practice and aligned with the interests of the
Company’s shareholders.
• Align the remuneration of executives with the interests of the
Company’s shareholders, and ensure that rewards are justified by
performance.
• Ensure that the pay of the Executive Directors takes into account: (i) pay
and conditions throughout the Company; and (ii) corporate governance
best practice, including health and safety, environmental, social and
governance risks.
• Allow for future bonuses to be paid in whole or part in deferred shares.
• Allow for pension contributions to Executive Directors for their services
under service contracts up to a 10% maximum opportunity, or higher if
required by applicable law.
Peer group
For the purposes of benchmarking appropriate compensation, the
Committee currently regards the following companies as the most
relevant peer group for Nostrum:
• FTSE 350 companies of a similar size to Nostrum;
• Oil and gas E&P companies globally which compete for scarce skills
within the industry; and
• Companies operating predominantly in the FSU which compete for
expatriate and local staff.
Risk management
The Committee will review incentive arrangements regularly to
ensure that they comply with the Group’s risk management systems,
and that controls are operating effectively. The Committee also
ensures that inappropriate operational or financial risk-taking is
neither encouraged nor rewarded through the Company’s
remuneration policies. Instead, a sensible balance will be struck
between fixed and variable pay, short- and long-term incentives and
cash and equity.
The Committee has access to the Audit Committee and senior
executive management as and when required to discuss any matters
of risk assessment.
Nostrum operates in an industry that is inherently subject to
operational risks. Particular emphasis is therefore placed on ensuring
that health and safety best practice is reinforced by this Policy. The
Committee consults regularly to ensure that this is the case.
Ongoing review of policy
The Committee will periodically review whether this policy is
operating appropriately. Any actions arising from this review will be
assigned to an appropriate person with a deadline to report back to
the Committee. The level and structure of the compensation system
will also be reviewed annually by the Committee.
CORPORATE GOVERNANCE
Phantom share option plan
The Committee does not envisage the award of any additional
phantom share options to Executive Directors in 2026.
Long-term incentive plan
The Committee does not envisage any awards under the Company’s
existing long-term incentive plan in 2026. Therefore, no performance
conditions have been set for 2026.
Remuneration Policy
The Company’s current directors’ remuneration policy was approved
by shareholders at the Company’s EGM on 11 July 2024. It is set out in
full on pages 118 through 124 of the 2024 Annual Report. We will be
asking our shareholders to approve a new directors’ remuneration
policy at our 2026 AGM. It is set out in full below.
Policy coverage
This policy applies to all payments to Directors of the Company from
the date of the Company’s 2026 AGM and until the approval of a
revised directors’ remuneration policy.
Following the 2026 AGM, it is intended to hold an EGM proposing
further amendments to the directors’ remuneration policy to
introduce a strategic alignment plan.
Policy objectives
This policy is designed to:
• Provide a structure and level of pay that attracts and retains high-calibre
directors capable of delivering the Company’s strategic objectives.
• Provide clear and transparent performance incentives in a manner that
is consistent with best practice and aligned with the interests of the
Company’s shareholders.
• Align the remuneration of executives with the interests of the
Company’s shareholders, and ensure that rewards are justified by
performance.
• Ensure that the pay of the Executive Directors takes into account: (i) pay
and conditions throughout the Company; and (ii) corporate governance
best practice, including health and safety, environmental, social and
governance risks.
• Allow for future bonuses to be paid in whole or part in deferred shares.
• Allow for pension contributions to Executive Directors for their services
under service contracts up to a 10% maximum opportunity, or higher if
required by applicable law.
Peer group
For the purposes of benchmarking appropriate compensation, the
Committee currently regards the following companies as the most
relevant peer group for Nostrum:
• FTSE 350 companies of a similar size to Nostrum;
• Oil and gas E&P companies globally which compete for scarce skills
within the industry; and
• Companies operating predominantly in the FSU which compete for
expatriate and local staff.
Risk management
The Committee will review incentive arrangements regularly to
ensure that they comply with the Group’s risk management systems,
and that controls are operating effectively. The Committee also
ensures that inappropriate operational or financial risk-taking is
neither encouraged nor rewarded through the Company’s
remuneration policies. Instead, a sensible balance will be struck
between fixed and variable pay, short- and long-term incentives and
cash and equity.
The Committee has access to the Audit Committee and senior
executive management as and when required to discuss any matters
of risk assessment.
Nostrum operates in an industry that is inherently subject to
operational risks. Particular emphasis is therefore placed on ensuring
that health and safety best practice is reinforced by this Policy. The
Committee consults regularly to ensure that this is the case.
Ongoing review of policy
The Committee will periodically review whether this policy is
operating appropriately. Any actions arising from this review will be
assigned to an appropriate person with a deadline to report back to
the Committee. The level and structure of the compensation system
will also be reviewed annually by the Committee.
2025 ANNUAL REPORT ON REMUNERATION
89 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Directors’ remuneration policy tables
Table setting out the key components of the reward package for Executive Directors.
Element
of pay
Purpose and link to
strategy
Maximum
opportunity Operation Performance criteria
BASE PAY To provide market-
competitive base
salaries.
There is no prescribed
maximum annual
increase. The
Committee takes into
account remuneration
levels at peer group
companies together
with the performance of
the Company and each
individual’s personal
contribution.
Base salary is reviewed annually and fixed for
12 months.
None
BENEFITS To reflect market
practice and provided in
line with peer
companies.
The aggregate value of
such benefits should not
constitute a significant
proportion of any
employee’s
compensation.
Benefits include:
• Medical insurance;
• Life insurance;
• Permanent health insurance (long-term
disability or income protection insurance); and
• A Company car may be provided for the Chief
Executive Officer.
• The Company may make payments to
Directors in lieu of benefits and may also make
separate benefit arrangements for Executive
Directors in connection with their service as
Executives of Group.
None
ANNUAL
BONUS
Executive Directors may
be eligible for an annual
bonus in cash and/or
deferred shares for good
performance (as
determined at the
Board’s discretion).
Maximum opportunity
of 240% of base
compensation for the
Chief Executive Officer.
Maximum opportunity
of 100% of base
compensation for the
Company’s Chief
Financial Officer (if a
Director). In all other
cases, maximum
opportunity of 40% of
base salary.
The annual bonus is generally determined by
reference to performance in the prior calendar
year.
Annual bonuses are generally paid sometime
between April and August of each year.
There are no malus and clawback provisions.
Key performance indicators against which
the performance of the Executive
Directors will be measured in the
following year are determined at the end
of each year and all non-commercially-
sensitive key performance indicators are
disclosed in the Directors’ Remuneration
Report. Any commercially sensitive
performance measures will be disclosed
retrospectively following completion of
the relevant financial year.
Performance against key performance
indicators for the previous year is also
disclosed in the Directors’ Remuneration
Report to show how the Board has
determined Executive Director
performance against the relevant key
performance indicators for that year, and
consequently the levels of annual bonus
payable to the Executive Directors.
NOSTRUM
OIL & GAS
PLC 2017
LONG-TERM
INCENTIVE
PLAN (LTIP)
To incentivise Executive
Directors and employees
over a longer timeframe,
and to increase their
interest in the
Company’s long-term
business goals and
performance through
share ownership.
To help retain executives
and other key
employees, and align
their interests with
shareholders through
building a shareholding
in the Company.
200% of base salary in
any financial year.
Awards of nominal-cost options are made at the sole
discretion of the Committee.
It was anticipated that awards would be granted
annually in the period 2017 to 2019 subject to
annual performance conditions. Generally, awards
have a one-year performance period attached to
them and will not vest for an additional two years
following the date on which the Committee
determines whether or not a performance condition
has been wholly or partly satisfied, such that no
award may vest before the third anniversary of the
date of grant.
The Committee has the discretion to decide, on or
before the grant of an award, that a participant shall
be entitled to receive dividend equivalents arising
over the period between the grant date and the
vesting date, with such amounts being payable in
cash or shares in respect of shares which vest.
Performance measures are generally
measured over one year though the
Committee has the discretion to apply a
longer performance period to awards.
The Committee has the discretion to set
any performance condition attaching to
awards granted under the LTIP.
Vesting of awards would ordinarily be
based:
• In part on average accrued sales
volumes measured in barrels of oil
equivalent per day; and
• In part on reserves measurement on
the basis of 2P barrels of oil per share.
89 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Directors’ remuneration policy tables
Table setting out the key components of the reward package for Executive Directors.
Element
of pay
Purpose and link to
strategy
Maximum
opportunity Operation Performance criteria
BASE PAY To provide market-
competitive base
salaries.
There is no prescribed
maximum annual
increase. The
Committee takes into
account remuneration
levels at peer group
companies together
with the performance of
the Company and each
individual’s personal
contribution.
Base salary is reviewed annually and fixed for
12 months.
None
BENEFITS To reflect market
practice and provided in
line with peer
companies.
The aggregate value of
such benefits should not
constitute a significant
proportion of any
employee’s
compensation.
Benefits include:
• Medical insurance;
• Life insurance;
• Permanent health insurance (long-term
disability or income protection insurance); and
• A Company car may be provided for the Chief
Executive Officer.
• The Company may make payments to
Directors in lieu of benefits and may also make
separate benefit arrangements for Executive
Directors in connection with their service as
Executives of Group.
None
ANNUAL
BONUS
Executive Directors may
be eligible for an annual
bonus in cash and/or
deferred shares for good
performance (as
determined at the
Board’s discretion).
Maximum opportunity
of 240% of base
compensation for the
Chief Executive Officer.
Maximum opportunity
of 100% of base
compensation for the
Company’s Chief
Financial Officer (if a
Director). In all other
cases, maximum
opportunity of 40% of
base salary.
The annual bonus is generally determined by
reference to performance in the prior calendar
year.
Annual bonuses are generally paid sometime
between April and August of each year.
There are no malus and clawback provisions.
Key performance indicators against which
the performance of the Executive
Directors will be measured in the
following year are determined at the end
of each year and all non-commercially-
sensitive key performance indicators are
disclosed in the Directors’ Remuneration
Report. Any commercially sensitive
performance measures will be disclosed
retrospectively following completion of
the relevant financial year.
Performance against key performance
indicators for the previous year is also
disclosed in the Directors’ Remuneration
Report to show how the Board has
determined Executive Director
performance against the relevant key
performance indicators for that year, and
consequently the levels of annual bonus
payable to the Executive Directors.
NOSTRUM
OIL & GAS
PLC 2017
LONG-TERM
INCENTIVE
PLAN (LTIP)
To incentivise Executive
Directors and employees
over a longer timeframe,
and to increase their
interest in the
Company’s long-term
business goals and
performance through
share ownership.
To help retain executives
and other key
employees, and align
their interests with
shareholders through
building a shareholding
in the Company.
200% of base salary in
any financial year.
Awards of nominal-cost options are made at the sole
discretion of the Committee.
It was anticipated that awards would be granted
annually in the period 2017 to 2019 subject to
annual performance conditions. Generally, awards
have a one-year performance period attached to
them and will not vest for an additional two years
following the date on which the Committee
determines whether or not a performance condition
has been wholly or partly satisfied, such that no
award may vest before the third anniversary of the
date of grant.
The Committee has the discretion to decide, on or
before the grant of an award, that a participant shall
be entitled to receive dividend equivalents arising
over the period between the grant date and the
vesting date, with such amounts being payable in
cash or shares in respect of shares which vest.
Performance measures are generally
measured over one year though the
Committee has the discretion to apply a
longer performance period to awards.
The Committee has the discretion to set
any performance condition attaching to
awards granted under the LTIP.
Vesting of awards would ordinarily be
based:
• In part on average accrued sales
volumes measured in barrels of oil
equivalent per day; and
• In part on reserves measurement on
the basis of 2P barrels of oil per share.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
90
CORPORATE GOVERNANCE
Element
of pay
Purpose and link to
strategy
Maximum
opportunity Operation Performance criteria
NOSTRUM
OIL & GAS
PLC 2017
LONG-TERM
INCENTIVE
PLAN (LTIP) -
continued
No awards were made
under the LTIP since
2018.
Malus and clawback provisions apply to the LTIP
such that participants are liable to repay/forfeit
some or all of their shares if there is a material
misstatement of results, or error in calculation, or if
there is serious misconduct. The discovery period is
three years commencing on the date on which the
award vests, which can be extended by the
Committee for an additional two years if an event
occurs which the Committee determines could
result in the operation of recovery or withholding
provisions.
No malus or clawback provisions were used in 2025.
PHANTOM
SHARE
OPTION
PLAN (THE
PLAN)
The Board places great
importance on
minimizing dilution of
existing shareholders’
equity. Share awards will
therefore only be made
to senior management
who are able to make a
material contribution to
shareholder value that
substantially exceeds the
value of any share
awards made.
No awards were made
under the Plan since
2018.
Share awards will only
be made on the basis of
achieving concrete long-
term objectives defined
in advance by the
Committee. Share
awards will vest over
several years.
In accordance with the
Plan rules, the total
number of shares that
may be granted
pursuant to the Plan is
five million.
CSC Global administers the Plan and is responsible
for granting rights under the Plan.
Each right entitles holders to receive, on exercise, a
cash amount equal to the excess of the market value
on the exercise date of the Ordinary Shares of the
Company to which it relates over a base value set at
the date of grant.
All Executive Directors of the Company are eligible
to participate in the Plan at the discretion of the
Board.
Awards vest on the basis described below.
Long-term objectives are to be reviewed at every
Committee meeting to ensure that they are
appropriate, relevant and rigorous.
There are no malus and clawback provisions.
None
PENSIONS To remain competitive in
the marketplace and
provide income in
retirement.
10% or, if higher, any
minimum pension
contribution which may
be required under
applicable law.
There are ordinarily no pension contributions or
provisions for Directors, although there may be
pension arrangements made for Executive Directors
in connection with their service as executives of
Group companies.
None
SHARE-
HOLDING
GUIDELINE
Aligns interests of
executive directors with
those of shareholders.
Executive Directors are
encouraged to maintain
a holding in the
Company to align their
interests with
shareholders.
If the Company grants shares to Directors outside
the LTIP by way of bonus or otherwise, they will be
required to hold 50% of such shares for a three-year
period.
The Committee monitors the holdings of all
Directors.
None
Table setting out the key components of the reward package for Non-Executive Directors
Element
of pay
Purpose and link to
strategy
Maximum
opportunity Operation Performance criteria
FEES FOR
NON-
EXECUTIVE
DIRECTORS
AND
CHAIRMAN
Attract and retain high-
performing individuals.
No prescribed maximum
annual increase in fees.
Any fee increases are usually considered at the end
of each year and the Board and, where applicable,
the Committee considers pay data at comparable
companies of a similar scale.
The chairs of the Committees receive additional
fees.
Limited benefits may be delivered (e.g. provision of
iPad and travel-related expenses).
Non-Executive Directors and the Chairman are not
eligible to participate in the Plan or the LTIP. No
other eligibility for participation in bonuses.
No malus or clawback provisions.
None
CORPORATE GOVERNANCE
Element
of pay
Purpose and link to
strategy
Maximum
opportunity Operation Performance criteria
NOSTRUM
OIL & GAS
PLC 2017
LONG-TERM
INCENTIVE
PLAN (LTIP) -
continued
No awards were made
under the LTIP since
2018.
Malus and clawback provisions apply to the LTIP
such that participants are liable to repay/forfeit
some or all of their shares if there is a material
misstatement of results, or error in calculation, or if
there is serious misconduct. The discovery period is
three years commencing on the date on which the
award vests, which can be extended by the
Committee for an additional two years if an event
occurs which the Committee determines could
result in the operation of recovery or withholding
provisions.
No malus or clawback provisions were used in 2025.
PHANTOM
SHARE
OPTION
PLAN (THE
PLAN)
The Board places great
importance on
minimizing dilution of
existing shareholders’
equity. Share awards will
therefore only be made
to senior management
who are able to make a
material contribution to
shareholder value that
substantially exceeds the
value of any share
awards made.
No awards were made
under the Plan since
2018.
Share awards will only
be made on the basis of
achieving concrete long-
term objectives defined
in advance by the
Committee. Share
awards will vest over
several years.
In accordance with the
Plan rules, the total
number of shares that
may be granted
pursuant to the Plan is
five million.
CSC Global administers the Plan and is responsible
for granting rights under the Plan.
Each right entitles holders to receive, on exercise, a
cash amount equal to the excess of the market value
on the exercise date of the Ordinary Shares of the
Company to which it relates over a base value set at
the date of grant.
All Executive Directors of the Company are eligible
to participate in the Plan at the discretion of the
Board.
Awards vest on the basis described below.
Long-term objectives are to be reviewed at every
Committee meeting to ensure that they are
appropriate, relevant and rigorous.
There are no malus and clawback provisions.
None
PENSIONS To remain competitive in
the marketplace and
provide income in
retirement.
10% or, if higher, any
minimum pension
contribution which may
be required under
applicable law.
There are ordinarily no pension contributions or
provisions for Directors, although there may be
pension arrangements made for Executive Directors
in connection with their service as executives of
Group companies.
None
SHARE-
HOLDING
GUIDELINE
Aligns interests of
executive directors with
those of shareholders.
Executive Directors are
encouraged to maintain
a holding in the
Company to align their
interests with
shareholders.
If the Company grants shares to Directors outside
the LTIP by way of bonus or otherwise, they will be
required to hold 50% of such shares for a three-year
period.
The Committee monitors the holdings of all
Directors.
None
Table setting out the key components of the reward package for Non-Executive Directors
Element
of pay
Purpose and link to
strategy
Maximum
opportunity Operation Performance criteria
FEES FOR
NON-
EXECUTIVE
DIRECTORS
AND
CHAIRMAN
Attract and retain high-
performing individuals.
No prescribed maximum
annual increase in fees.
Any fee increases are usually considered at the end
of each year and the Board and, where applicable,
the Committee considers pay data at comparable
companies of a similar scale.
The chairs of the Committees receive additional
fees.
Limited benefits may be delivered (e.g. provision of
iPad and travel-related expenses).
Non-Executive Directors and the Chairman are not
eligible to participate in the Plan or the LTIP. No
other eligibility for participation in bonuses.
No malus or clawback provisions.
None
2025 ANNUAL REPORT ON REMUNERATION
91 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Phantom share option plan
The Company operates the Plan in accordance with the Plan rules, the
Listing Rules, the Disclosure and Transparency rules and other
applicable rules. In order to retain talent, options are generally
granted in tranches exercisable at the following times:
• As to 20% of the Ordinary Shares in respect of which an option is
granted, from the first anniversary of the date of grant;
• As to a further 20% of the Ordinary Shares in respect of which an option
is granted, from the second anniversary of the date of grant;
• As to a further 20% of the Ordinary Shares in respect of which an option
is granted, from the third anniversary of the date of grant;
• As to a further 20% of the Ordinary Shares in respect of which an option
is granted, from the fourth anniversary of the date of grant; and
• As to the remaining 20% of the Ordinary Shares in respect of which an
option is granted, from the fifth anniversary of the date of grant.
The Board retains discretion over a number of areas relating to the
operation and administration of the Plan, which include, but are not
limited to: (i) who participates; (ii) the timing of the grant of an award;
and (iii) the size of the award.
Dividend waiver
The trustee has agreed to waive any dividends on shares held under
the Plan and the LTIP.
Treatment of existing arrangements
For the avoidance of doubt, authority is given to the Company to
honour any commitments entered into with current or former
Directors notwithstanding the approval of the policy. This will last until
the existing incentives vest (or lapse) or the benefits of any
contractual arrangements no longer apply.
Remuneration scenarios for Executive Directors
The bar charts below provide estimates of the potential remuneration
of the executive directors for 2026. Three scenarios are presented for
each executive director which are based on the following
assumptions:
The “minimum” columns are intended to show the fixed level of
remuneration to which executive directors are entitled in 2026
irrespective of performance levels, namely base salary, benefits
(which includes any payments made in lieu of benefits made under
the executive directors employment contracts for their roles as
executives of the Group and not under their service contracts as
executive directors) and any payments made in lieu of the provision of
a pension scheme (which are paid under the executive directors
employment contracts for their roles as executives of the Group and
not under their service contracts as executive directors). No bonus
payments are assumed for minimum performance.
The “on target” scenario seeks to illustrate the remuneration the
executive directors would receive if performance was in line with
expectation.
The “maximum” columns illustrate total remuneration levels in
circumstances where the variable elements pay out in full.
As stated above, no awards were made under the LTIP or the
Phantom Share Option Scheme since 2018 and the Committee does
not envisage any awards under the LTIP or the Phantom Share Option
Scheme in 2026. Therefore, no performance conditions have been set
for 2026.
Viktor Gladun – Chief Executive Officer
(amounts in USD thousand)
Minimum 100% 728
On target 52% 48% 1,404
Maximum 31% 69% 2,350
Fixed salary Bonus
Recruitment
The Committee expects any new Executive Directors to be engaged
on terms that are consistent with this policy, but the Committee
acknowledges that it cannot always predict the circumstances under
which any new Executive Director may be recruited and so,
accordingly, in each case, the Committee will consider:
• The objective of attracting, motivating and retaining the highest calibre
directors in a manner that is consistent with best practice and aligned
with the interests of the Company’s shareholders.
• Salary, benefits, annual bonus and long-term incentives will be
determined within the framework of the table setting out the key
components of the reward package for Executive Directors.
• Where an individual would be forfeiting valuable remuneration in order
to join the Company, the need to retain flexibility should be considered
in order for the Committee to be able to set base salaries at a level
necessary to facilitate the hiring of the highest calibre candidates,
including awards or payments to compensate for remuneration
arrangements forfeited on leaving a previous employer. The Committee
would require reasonable evidence of the nature and value of any
forfeited compensation and would, to the extent practicable, ensure
any compensation awarded was no more valuable than the forfeited
award.
• Judgement will be exercised to determine the appropriate measure of
compensation for any forfeited award by taking account of relevant
factors such as the value of any lost award, performance conditions and
the time over which they would have vested or been paid.
• Where an existing employee of the Company is promoted to the Board,
the Company will honour any commitment to remuneration made in
respect of a prior role, including any outstanding awards of options
under the Plan.
• The need, in order to recruit the best candidates, for the Company to
offer sign-on remuneration, the necessity and level of which will depend
on circumstances.
• Where an individual is relocating in order to take up a role, the Company
may provide certain one-off benefits including, but not limited to,
reasonable relocation expenses, accommodation, housing allowance
and assistance with visa applications.
In making any decisions on remuneration for new joiners (including
NEDs), the Committee will endeavour to balance the expectations of
shareholders with current market and corporate governance best
practice and the requirements of any new joiner, and would strive to
pay no more than is necessary to attract the right talent to the role.
91 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Phantom share option plan
The Company operates the Plan in accordance with the Plan rules, the
Listing Rules, the Disclosure and Transparency rules and other
applicable rules. In order to retain talent, options are generally
granted in tranches exercisable at the following times:
• As to 20% of the Ordinary Shares in respect of which an option is
granted, from the first anniversary of the date of grant;
• As to a further 20% of the Ordinary Shares in respect of which an option
is granted, from the second anniversary of the date of grant;
• As to a further 20% of the Ordinary Shares in respect of which an option
is granted, from the third anniversary of the date of grant;
• As to a further 20% of the Ordinary Shares in respect of which an option
is granted, from the fourth anniversary of the date of grant; and
• As to the remaining 20% of the Ordinary Shares in respect of which an
option is granted, from the fifth anniversary of the date of grant.
The Board retains discretion over a number of areas relating to the
operation and administration of the Plan, which include, but are not
limited to: (i) who participates; (ii) the timing of the grant of an award;
and (iii) the size of the award.
Dividend waiver
The trustee has agreed to waive any dividends on shares held under
the Plan and the LTIP.
Treatment of existing arrangements
For the avoidance of doubt, authority is given to the Company to
honour any commitments entered into with current or former
Directors notwithstanding the approval of the policy. This will last until
the existing incentives vest (or lapse) or the benefits of any
contractual arrangements no longer apply.
Remuneration scenarios for Executive Directors
The bar charts below provide estimates of the potential remuneration
of the executive directors for 2026. Three scenarios are presented for
each executive director which are based on the following
assumptions:
The “minimum” columns are intended to show the fixed level of
remuneration to which executive directors are entitled in 2026
irrespective of performance levels, namely base salary, benefits
(which includes any payments made in lieu of benefits made under
the executive directors employment contracts for their roles as
executives of the Group and not under their service contracts as
executive directors) and any payments made in lieu of the provision of
a pension scheme (which are paid under the executive directors
employment contracts for their roles as executives of the Group and
not under their service contracts as executive directors). No bonus
payments are assumed for minimum performance.
The “on target” scenario seeks to illustrate the remuneration the
executive directors would receive if performance was in line with
expectation.
The “maximum” columns illustrate total remuneration levels in
circumstances where the variable elements pay out in full.
As stated above, no awards were made under the LTIP or the
Phantom Share Option Scheme since 2018 and the Committee does
not envisage any awards under the LTIP or the Phantom Share Option
Scheme in 2026. Therefore, no performance conditions have been set
for 2026.
Viktor Gladun – Chief Executive Officer
(amounts in USD thousand)
Minimum 100% 728
On target 52% 48% 1,404
Maximum 31% 69% 2,350
Fixed salary Bonus
Recruitment
The Committee expects any new Executive Directors to be engaged
on terms that are consistent with this policy, but the Committee
acknowledges that it cannot always predict the circumstances under
which any new Executive Director may be recruited and so,
accordingly, in each case, the Committee will consider:
• The objective of attracting, motivating and retaining the highest calibre
directors in a manner that is consistent with best practice and aligned
with the interests of the Company’s shareholders.
• Salary, benefits, annual bonus and long-term incentives will be
determined within the framework of the table setting out the key
components of the reward package for Executive Directors.
• Where an individual would be forfeiting valuable remuneration in order
to join the Company, the need to retain flexibility should be considered
in order for the Committee to be able to set base salaries at a level
necessary to facilitate the hiring of the highest calibre candidates,
including awards or payments to compensate for remuneration
arrangements forfeited on leaving a previous employer. The Committee
would require reasonable evidence of the nature and value of any
forfeited compensation and would, to the extent practicable, ensure
any compensation awarded was no more valuable than the forfeited
award.
• Judgement will be exercised to determine the appropriate measure of
compensation for any forfeited award by taking account of relevant
factors such as the value of any lost award, performance conditions and
the time over which they would have vested or been paid.
• Where an existing employee of the Company is promoted to the Board,
the Company will honour any commitment to remuneration made in
respect of a prior role, including any outstanding awards of options
under the Plan.
• The need, in order to recruit the best candidates, for the Company to
offer sign-on remuneration, the necessity and level of which will depend
on circumstances.
• Where an individual is relocating in order to take up a role, the Company
may provide certain one-off benefits including, but not limited to,
reasonable relocation expenses, accommodation, housing allowance
and assistance with visa applications.
In making any decisions on remuneration for new joiners (including
NEDs), the Committee will endeavour to balance the expectations of
shareholders with current market and corporate governance best
practice and the requirements of any new joiner, and would strive to
pay no more than is necessary to attract the right talent to the role.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
92
CORPORATE GOVERNANCE
Service agreements
As at 31 December 2025, summary details of each Executive
Director’s service agreement were as follows:
Director’s service
agreement date
As most recently amended ($US
Dollars)
Viktor Gladun 15 July 2025 US$675,000
1 The remuneration of Mr Gladun is denominated in GBP. 2025: GBP/USD: 1.3518
2 Annual salary and fees represents the total salary and fees (excluding benefits/pension,
and discretionary remuneration) from the Group for both the Director’s executive and
director service roles.
The appointment of each of the Executive Directors continues until
the Company’s Annual General Meeting and their ongoing
appointment is subject to being re-elected as a director at each
subsequent Annual General Meeting. Each Executive Director may be
required to resign at any time in accordance with the Company’s
Articles or for any regulatory reason such as the revocation of any
approvals required from the Financial Conduct Authority (FCA). The
Company may lawfully terminate the Executive Directors’
employment in the following ways:
• At any time upon 6 months’ written notice (Mr Gladun).
• Without notice in circumstances where the Company is entitled to
terminate for cause.
The lawful termination mechanisms described above are without
prejudice to the employer’s ability in appropriate circumstances to
terminate in breach of the notice period referred to above, and
thereby to be liable for damages to the Executive Director.
The Executive Directors are not permitted to take up any office or
employment with, or have any direct or indirect interest in, any firm
or company which is in direct or indirect competition with the
Company or any other member of the Group, or any company in
which any member of the Group has an interest, without the consent
of the Board.
In addition, the Chief Executive Officer is subject to non-solicitation
covenants in relation to Group companies for 12 months from the
date of termination of his service contract.
Copies of the Executive Directors’ service agreements and the Non-
Executive Directors’ letters of appointment are available for
inspection at the Company’s registered office during normal business
hours and at the Annual General Meeting.
Payments for departing Executive Directors
Provision Policy
Notice period
and
compensation
for loss of office
in service
contracts
6 months’ notice from the Company to Mr Gladun.
Base salary is paid in line with the notice period.
Notice period payments will either be made as
normal (if the Executive Director continues to work
during the notice period or is on gardening leave) or
they will be made as monthly payments in lieu of
notice (subject to mitigation if alternative
employment is found).
Treatment of
annual bonus on
termination
No entitlement.
Treatment of
unvested share
option awards
under the Plan
An Executive Director’s awards will generally lapse
to the extent they have not vested on the date of
voluntary cessation of employment and any portion
that remains outstanding but unexercised after 12
months following such cessation will lapse. Mr
Gladun did not participate in the Plan in 2025.
Treatment of
unvested awards
under the LTIP
For a Director considered to be a “good leaver”
before the original vesting date (including leaving the
Company on retirement, redundancy, ill health, as a
result of death in service or in other circumstances
determined by the Committee), outstanding awards
will be pro-rated for time and vest subject to
performance on the original vesting date. For a
director who is considered a “good leaver” after the
original vesting date, any awards will remain
exercisable for a period of 12 months commencing on
the date of cessation. For a Director whose
employment is terminated for any other reason, the
award will lapse in full. Mr Gladun did not participate
in the LTIP in 2025.
In particular circumstances, an arrangement may be agreed to
facilitate the exit of a particular individual. Any such arrangement
would be made bearing in mind the desire to minimise costs for the
Group and only in circumstances where it is considered in the best
interests of shareholders.
Change of control
In accordance with the LTIP rules and the terms of the awards granted
in 2017 and 2018 under the LTIP, if there is a sale of all or substantially
all of the Company or the Company’s business in circumstances where
such sale has been approved by a majority of shareholders and is at a
price of US$10 per share or more, then all awards granted will vest in
full regardless of the achievement or otherwise of applicable
performance conditions on the date of such event if they have not
already vested, and all awards will remain exercisable for one month
from such date. To the extent that any option is not exercised in such
period, it shall lapse at the end of that period.
CORPORATE GOVERNANCE
Service agreements
As at 31 December 2025, summary details of each Executive
Director’s service agreement were as follows:
Director’s service
agreement date
As most recently amended ($US
Dollars)
Viktor Gladun 15 July 2025 US$675,000
1 The remuneration of Mr Gladun is denominated in GBP. 2025: GBP/USD: 1.3518
2 Annual salary and fees represents the total salary and fees (excluding benefits/pension,
and discretionary remuneration) from the Group for both the Director’s executive and
director service roles.
The appointment of each of the Executive Directors continues until
the Company’s Annual General Meeting and their ongoing
appointment is subject to being re-elected as a director at each
subsequent Annual General Meeting. Each Executive Director may be
required to resign at any time in accordance with the Company’s
Articles or for any regulatory reason such as the revocation of any
approvals required from the Financial Conduct Authority (FCA). The
Company may lawfully terminate the Executive Directors’
employment in the following ways:
• At any time upon 6 months’ written notice (Mr Gladun).
• Without notice in circumstances where the Company is entitled to
terminate for cause.
The lawful termination mechanisms described above are without
prejudice to the employer’s ability in appropriate circumstances to
terminate in breach of the notice period referred to above, and
thereby to be liable for damages to the Executive Director.
The Executive Directors are not permitted to take up any office or
employment with, or have any direct or indirect interest in, any firm
or company which is in direct or indirect competition with the
Company or any other member of the Group, or any company in
which any member of the Group has an interest, without the consent
of the Board.
In addition, the Chief Executive Officer is subject to non-solicitation
covenants in relation to Group companies for 12 months from the
date of termination of his service contract.
Copies of the Executive Directors’ service agreements and the Non-
Executive Directors’ letters of appointment are available for
inspection at the Company’s registered office during normal business
hours and at the Annual General Meeting.
Payments for departing Executive Directors
Provision Policy
Notice period
and
compensation
for loss of office
in service
contracts
6 months’ notice from the Company to Mr Gladun.
Base salary is paid in line with the notice period.
Notice period payments will either be made as
normal (if the Executive Director continues to work
during the notice period or is on gardening leave) or
they will be made as monthly payments in lieu of
notice (subject to mitigation if alternative
employment is found).
Treatment of
annual bonus on
termination
No entitlement.
Treatment of
unvested share
option awards
under the Plan
An Executive Director’s awards will generally lapse
to the extent they have not vested on the date of
voluntary cessation of employment and any portion
that remains outstanding but unexercised after 12
months following such cessation will lapse. Mr
Gladun did not participate in the Plan in 2025.
Treatment of
unvested awards
under the LTIP
For a Director considered to be a “good leaver”
before the original vesting date (including leaving the
Company on retirement, redundancy, ill health, as a
result of death in service or in other circumstances
determined by the Committee), outstanding awards
will be pro-rated for time and vest subject to
performance on the original vesting date. For a
director who is considered a “good leaver” after the
original vesting date, any awards will remain
exercisable for a period of 12 months commencing on
the date of cessation. For a Director whose
employment is terminated for any other reason, the
award will lapse in full. Mr Gladun did not participate
in the LTIP in 2025.
In particular circumstances, an arrangement may be agreed to
facilitate the exit of a particular individual. Any such arrangement
would be made bearing in mind the desire to minimise costs for the
Group and only in circumstances where it is considered in the best
interests of shareholders.
Change of control
In accordance with the LTIP rules and the terms of the awards granted
in 2017 and 2018 under the LTIP, if there is a sale of all or substantially
all of the Company or the Company’s business in circumstances where
such sale has been approved by a majority of shareholders and is at a
price of US$10 per share or more, then all awards granted will vest in
full regardless of the achievement or otherwise of applicable
performance conditions on the date of such event if they have not
already vested, and all awards will remain exercisable for one month
from such date. To the extent that any option is not exercised in such
period, it shall lapse at the end of that period.
2025 ANNUAL REPORT ON REMUNERATION
93 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Non-Executive Directors
The Chairman and Executive Directors set the remuneration package
for Non-Executive Directors within the framework of the table setting
out the key components of the reward package for Non-Executive
Directors.
Non-Executive Director appointment letters
The following table provides details of Non-Executive Director
appointment letters as at 31 December 2025 (Mr Hopkinson and Mr
Khan left the Board on 30 June 2025, Mr Gladun became CEO on 15
July 2025, Mr Whyte left the Board on 16 October 2025, Mr Ivin
became Chairman on 16 October 2025 and Ms Paulus left the Board
on 13 February 2026):
Name Position
Date of
letter of
appointment
Expiry of
current term
Notice
period
Nikolay
Ivin
Chairman 16 October
2025
16 October
2028
5 months
Martin
Gudgeon
Non-Executive
Director
14 February
2023
14 February
2026
3 months
Fiona
Paulus
Independent
Non-Executive
Director
14 February
2023
14 February
2026
3 months
Nikolay
Ivin
Independent
Non-Executive
Director
15 July 2025 15 July 2028 3 months
James
Hart
Independent
Non-Executive
Director
23 October
2025
23 October
2028
3 months
Robert
Wynne
Non-Executive
Director
20 November
2025
20 November
2028
3 months
Each appointment is for an initial term of three years, subject to being
re-elected at each Annual General Meeting, save that a Non-Executive
Director or the Company may terminate the appointment at any time
upon one month’s written notice, or that a Non-Executive Director
may be required to resign at any time in accordance with the Articles
of the Company, the UK Corporate Governance Code or for any
regulatory reason such as the revocation of approvals required from
the FCA.
Each of the Non-Executive Directors is entitled to an annual fee paid in
twelve equal instalments and to reimbursement of reasonable
expenses. There is no entitlement for Non-Executive Directors to
participate in the Plan or the LTIP.
The Non-Executive Directors are not permitted to take up any office
or employment with, or have any direct or indirect interest in, any
firm or company that was in direct or indirect competition with the
Company without the consent of the Board.
Upon termination of the appointment and where such termination is
for any reason other than due to the Non-Executive Director’s gross
misconduct, material breach of the terms of the appointment, act of
fraud or dishonesty or wilful neglect of the Non-Executive Director’s
duties, the Non- Executive Director is entitled to be paid a pro-rated
amount of their fees in respect of the period between the beginning
of the quarter in which termination took place and the termination
date.
Otherwise, none of the Non-Executive Directors is entitled to any
damages for loss of office and no fee is payable in respect of any
unexpired portion of the term of the appointment.
The Company intends to comply with Provision 18 of the UK
Corporate Governance Code and accordingly all Directors will stand
for re-election by shareholders at future Annual General Meetings
until the Board determines otherwise.
Statement of consideration of employment conditions elsewhere in
the Company
We have not consulted with employees on the executive
Remuneration Policy.
However, when determining the Policy for Executive Directors we
have been mindful of the pay and employment conditions of
employees across the Group as a whole.
Statement of consideration of shareholder views
Senior executive management of the Company regularly meet with
shareholders and solicit their views on the Company’s policies in
relation to Director and Executive remuneration, and take such views
into account when formulating remuneration policies and
remuneration levels in specific cases.
Approval of the Directors’ remuneration report
The Directors’ remuneration report was approved by the Board
on 25 April 2026.
On behalf of the Board
Viktor Gladun
Chief Executive Officer
25 April 2026
93 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Non-Executive Directors
The Chairman and Executive Directors set the remuneration package
for Non-Executive Directors within the framework of the table setting
out the key components of the reward package for Non-Executive
Directors.
Non-Executive Director appointment letters
The following table provides details of Non-Executive Director
appointment letters as at 31 December 2025 (Mr Hopkinson and Mr
Khan left the Board on 30 June 2025, Mr Gladun became CEO on 15
July 2025, Mr Whyte left the Board on 16 October 2025, Mr Ivin
became Chairman on 16 October 2025 and Ms Paulus left the Board
on 13 February 2026):
Name Position
Date of
letter of
appointment
Expiry of
current term
Notice
period
Nikolay
Ivin
Chairman 16 October
2025
16 October
2028
5 months
Martin
Gudgeon
Non-Executive
Director
14 February
2023
14 February
2026
3 months
Fiona
Paulus
Independent
Non-Executive
Director
14 February
2023
14 February
2026
3 months
Nikolay
Ivin
Independent
Non-Executive
Director
15 July 2025 15 July 2028 3 months
James
Hart
Independent
Non-Executive
Director
23 October
2025
23 October
2028
3 months
Robert
Wynne
Non-Executive
Director
20 November
2025
20 November
2028
3 months
Each appointment is for an initial term of three years, subject to being
re-elected at each Annual General Meeting, save that a Non-Executive
Director or the Company may terminate the appointment at any time
upon one month’s written notice, or that a Non-Executive Director
may be required to resign at any time in accordance with the Articles
of the Company, the UK Corporate Governance Code or for any
regulatory reason such as the revocation of approvals required from
the FCA.
Each of the Non-Executive Directors is entitled to an annual fee paid in
twelve equal instalments and to reimbursement of reasonable
expenses. There is no entitlement for Non-Executive Directors to
participate in the Plan or the LTIP.
The Non-Executive Directors are not permitted to take up any office
or employment with, or have any direct or indirect interest in, any
firm or company that was in direct or indirect competition with the
Company without the consent of the Board.
Upon termination of the appointment and where such termination is
for any reason other than due to the Non-Executive Director’s gross
misconduct, material breach of the terms of the appointment, act of
fraud or dishonesty or wilful neglect of the Non-Executive Director’s
duties, the Non- Executive Director is entitled to be paid a pro-rated
amount of their fees in respect of the period between the beginning
of the quarter in which termination took place and the termination
date.
Otherwise, none of the Non-Executive Directors is entitled to any
damages for loss of office and no fee is payable in respect of any
unexpired portion of the term of the appointment.
The Company intends to comply with Provision 18 of the UK
Corporate Governance Code and accordingly all Directors will stand
for re-election by shareholders at future Annual General Meetings
until the Board determines otherwise.
Statement of consideration of employment conditions elsewhere in
the Company
We have not consulted with employees on the executive
Remuneration Policy.
However, when determining the Policy for Executive Directors we
have been mindful of the pay and employment conditions of
employees across the Group as a whole.
Statement of consideration of shareholder views
Senior executive management of the Company regularly meet with
shareholders and solicit their views on the Company’s policies in
relation to Director and Executive remuneration, and take such views
into account when formulating remuneration policies and
remuneration levels in specific cases.
Approval of the Directors’ remuneration report
The Directors’ remuneration report was approved by the Board
on 25 April 2026.
On behalf of the Board
Viktor Gladun
Chief Executive Officer
25 April 2026
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
94
CORPORATE GOVERNANCE
DIRECTORS’ REPORT
The Directors submit their report and the consolidated audited
financial statements of the Group and the audited parent financial
statements of the Company for the year ended 31 December 2025.
This report has been prepared in accordance with the Large and
Medium- sized Companies and Groups (Accounts and Reports)
Regulations 2008.
• The following are incorporated by reference and shall be deemed to
form part of this Directors’ Report:
• The Strategic Report on pages 1-62;
• The Board and Governance report (which includes the Board, the
Corporate Governance Report and the Directors’ Remuneration
Report) on pages 72-93; and
The energy and global greenhouse gas emissions disclosure on pages
48-54.
In addition, the following information is also incorporated into this
Directors’ Report by reference:
Subject matter Page
Likely future developments within the Group 27-28
Related party transactions 131
Going concern statement 32
Financial position and performance of the Group 29-32
Greenhouse gas emissions 52
Directors’ share interests 85
Corporate governance statement 72-74
Diversity 44-46
Directors
Full biographical details of all current Directors of the Company and
the Board Committees of which they are members are set out on
pages 66-67 of this Annual Report.
Dividends
No dividends were paid during the year ended 31 December 2025.
No dividend is proposed to be paid in 2026 in respect of the year
ended 31 December 2025.
Auditor
In accordance with section 418(2) of the Companies Act 2006, each
Director in office at the date of this Directors’ Report confirms that (a)
so far as the Director is aware, there is no relevant audit information
of which the Company’s auditor is unaware and (b) the Director has
taken all the steps that he/she ought to have taken as a Director to
make him/herself aware of any relevant audit information and to
establish that the Company’s auditor is aware of that information.
On 6 March 2023, the Company announced that it had appointed
MHA as auditors to the Group and Ernst & Young Kazakhstan as
auditors of Zhaikmunai LLP.
The appointment of MHA as auditors to the Group was approved by
shareholders at the Company’s 2023 AGM, at the Company’s 2024
AGM and at the Company’s 2025 AGM.
On 14 November 2025, the Company announced the resignation of
MHA and that RPG Crouch Chapman LLP had been appointed to fill
the ensuing casual vacancy.
The appointment of RPG Crouch Chapman LLP as auditors to the
Group will be put to shareholders for approval at the 2026 AGM.
Directors’ liabilities and indemnities
The Company maintains liability insurance for its Directors. All
Directors are also in receipt of an indemnity from the Company under
the Company’s Articles of Association (the Articles) in respect of (a)
liability incurred by any Director due to negligence, default, breach of
duty or breach of trust in relation to the affairs of the Company, or
any subsidiary undertaking or (b) any liability incurred by any Director
in connection with the activities of the Company, or any subsidiary
undertaking, in its capacity as a trustee of an occupational pension
scheme; in both instances to the extent permitted under the
Companies Act 2006. Copies of the Company’s Articles are available
on the Company’s website or at the Company’s registered office
during normal business hours and will be available for inspection at
the Annual General Meeting.
In May 2015, the Board approved a policy for the indemnification of
Directors, officers and other designated beneficiaries and the entry by
the Company into an accompanying deed of indemnity.
The policy clarifies that the Company will seek to provide the
maximum indemnification and protection to Group Directors and
officers permissible under applicable law, except in cases of fraud or
wilful default, including but not limited to:
ii. providing compensation for losses suffered in the course of acting
as a Director or officer in the interests of the Group,
iii. providing Directors and officers with quality external legal
representation and external professional advisers,
iv. assisting Directors or officers with repatriation following a third-
party claim,
v. continuing to make payment of a Director’s or officer’s
remuneration and benefits while such Director or officer is under
suspension, investigation or detention by order of a third party,
vi. taking reasonable steps to place any such Director or officer in a
similar position working in another location or elsewhere in the
Group which would allow his/her employment to continue and to
compensate for any adverse financial consequences they incur as
a result of their loss of office, or (vi) maintaining customary
Directors’ and officers’ liability insurance policies.
The deed of indemnity is intended to cover any insufficiency in the
protection granted to Directors and officers under the Articles which
could expose such persons to substantial liability to third parties,
including governmental authorities, in particular in jurisdictions where
significant uncertainty exists in relation to the interpretation and
application of the law. The deed of indemnity allows Directors,
officers and other designated beneficiaries to enforce the protection
provided for under the Articles without any further action by the
Company being required.
The above provisions were in force during the financial year 2025.
Political donations
The Group made no political donations during the year 2025.
Contributions to non-UK political parties
No contributions to non-UK political parties were made during the
year 2025.
Research and development
The Group is not involved in any activities in the field of research and
development.
CORPORATE GOVERNANCE
DIRECTORS’ REPORT
The Directors submit their report and the consolidated audited
financial statements of the Group and the audited parent financial
statements of the Company for the year ended 31 December 2025.
This report has been prepared in accordance with the Large and
Medium- sized Companies and Groups (Accounts and Reports)
Regulations 2008.
• The following are incorporated by reference and shall be deemed to
form part of this Directors’ Report:
• The Strategic Report on pages 1-62;
• The Board and Governance report (which includes the Board, the
Corporate Governance Report and the Directors’ Remuneration
Report) on pages 72-93; and
The energy and global greenhouse gas emissions disclosure on pages
48-54.
In addition, the following information is also incorporated into this
Directors’ Report by reference:
Subject matter Page
Likely future developments within the Group 27-28
Related party transactions 131
Going concern statement 32
Financial position and performance of the Group 29-32
Greenhouse gas emissions 52
Directors’ share interests 85
Corporate governance statement 72-74
Diversity 44-46
Directors
Full biographical details of all current Directors of the Company and
the Board Committees of which they are members are set out on
pages 66-67 of this Annual Report.
Dividends
No dividends were paid during the year ended 31 December 2025.
No dividend is proposed to be paid in 2026 in respect of the year
ended 31 December 2025.
Auditor
In accordance with section 418(2) of the Companies Act 2006, each
Director in office at the date of this Directors’ Report confirms that (a)
so far as the Director is aware, there is no relevant audit information
of which the Company’s auditor is unaware and (b) the Director has
taken all the steps that he/she ought to have taken as a Director to
make him/herself aware of any relevant audit information and to
establish that the Company’s auditor is aware of that information.
On 6 March 2023, the Company announced that it had appointed
MHA as auditors to the Group and Ernst & Young Kazakhstan as
auditors of Zhaikmunai LLP.
The appointment of MHA as auditors to the Group was approved by
shareholders at the Company’s 2023 AGM, at the Company’s 2024
AGM and at the Company’s 2025 AGM.
On 14 November 2025, the Company announced the resignation of
MHA and that RPG Crouch Chapman LLP had been appointed to fill
the ensuing casual vacancy.
The appointment of RPG Crouch Chapman LLP as auditors to the
Group will be put to shareholders for approval at the 2026 AGM.
Directors’ liabilities and indemnities
The Company maintains liability insurance for its Directors. All
Directors are also in receipt of an indemnity from the Company under
the Company’s Articles of Association (the Articles) in respect of (a)
liability incurred by any Director due to negligence, default, breach of
duty or breach of trust in relation to the affairs of the Company, or
any subsidiary undertaking or (b) any liability incurred by any Director
in connection with the activities of the Company, or any subsidiary
undertaking, in its capacity as a trustee of an occupational pension
scheme; in both instances to the extent permitted under the
Companies Act 2006. Copies of the Company’s Articles are available
on the Company’s website or at the Company’s registered office
during normal business hours and will be available for inspection at
the Annual General Meeting.
In May 2015, the Board approved a policy for the indemnification of
Directors, officers and other designated beneficiaries and the entry by
the Company into an accompanying deed of indemnity.
The policy clarifies that the Company will seek to provide the
maximum indemnification and protection to Group Directors and
officers permissible under applicable law, except in cases of fraud or
wilful default, including but not limited to:
ii. providing compensation for losses suffered in the course of acting
as a Director or officer in the interests of the Group,
iii. providing Directors and officers with quality external legal
representation and external professional advisers,
iv. assisting Directors or officers with repatriation following a third-
party claim,
v. continuing to make payment of a Director’s or officer’s
remuneration and benefits while such Director or officer is under
suspension, investigation or detention by order of a third party,
vi. taking reasonable steps to place any such Director or officer in a
similar position working in another location or elsewhere in the
Group which would allow his/her employment to continue and to
compensate for any adverse financial consequences they incur as
a result of their loss of office, or (vi) maintaining customary
Directors’ and officers’ liability insurance policies.
The deed of indemnity is intended to cover any insufficiency in the
protection granted to Directors and officers under the Articles which
could expose such persons to substantial liability to third parties,
including governmental authorities, in particular in jurisdictions where
significant uncertainty exists in relation to the interpretation and
application of the law. The deed of indemnity allows Directors,
officers and other designated beneficiaries to enforce the protection
provided for under the Articles without any further action by the
Company being required.
The above provisions were in force during the financial year 2025.
Political donations
The Group made no political donations during the year 2025.
Contributions to non-UK political parties
No contributions to non-UK political parties were made during the
year 2025.
Research and development
The Group is not involved in any activities in the field of research and
development.
DIRECTORS’ REPORT
95 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Branches
The Company is registered in England and Wales and during 2018
moved its place of effective management and tax residence from the
Netherlands to the United Kingdom. As the Group is a global business,
our interests and activities are held or operated through subsidiaries
and branches and subject to the laws and regulations of many
different jurisdictions.
Share capital
As at 31 December 2024, the Company’s issued share capital was
£1,693,815.61 divided into 169,381,561 Ordinary Shares each having
a nominal value of £0.01. 4,136,578 Ordinary Shares were cancelled
on 4 April 2025 leaving a balance of 165,244,983 Ordinary Shares and
an issued share capital of £1,652,449.83 as at 31 December 2025.
All of the Company’s issued Ordinary Shares were fully paid up and
rank equally in all respects. The rights attached to the Ordinary Shares,
in addition to those conferred on their holders by law, are set out in
the Articles. The ordinary shareholders prior to the restructuring in
2023 were diluted to 11.1% subject to further dilution to 10% if the
warrants held by noteholders are exercised.
Intertrust Employee Benefit Trustee Limited (the Trust) holds shares in
the Company in trust for the purposes of the Company’s phantom
share option plan, and the rights attaching to these shares are
exercised by independent trustees. As at 31 December 2025, the Trust
held 294,887 Ordinary Shares in the Company.
Share rights
Without prejudice to any rights attached to any existing shares, the
Company may issue shares with rights or restrictions as determined
by either the shareholders by ordinary resolution or, subject to and in
default of such determination, the Board.
Voting rights
There are no restrictions on voting rights of shares in the Articles and
at a general meeting every shareholder present in person or by proxy
has one vote for every share held by him or her. No shareholder shall
be entitled to vote either personally or by proxy or to exercise any
other right in relation to general meetings if any sum due from him or
her to the Company in respect of that share remains unpaid.
Transfer of shares and warrants
The Articles provide that transfers of certificated shares must be
effected in writing duly signed by or on behalf of the transferor and,
except in the case of fully paid shares, by or on behalf of the
transferee. The transferor shall remain the holder of the shares
concerned until the name of the transferee is entered on the Register
of Members in respect of those shares. Transfers of uncertificated
shares may be effected by means of the relevant electronic system
unless the Uncertificated Securities Regulations 2001 provide
otherwise.
The Directors may refuse to register a transfer of shares in favour of
more than four persons jointly.
The warrants issued on 9 February 2023 are not transferable. There
are no other agreements between holders of securities that are
known to the Company and may restrict transfer of securities or
voting rights.
Directors, Articles and purchase of shares
The Articles were adopted on 29 April 2022 and may only be
amended by special resolution at a general meeting of the
shareholders (and where required, with the consent of the Warrant
Trustee).
The Directors’ powers are conferred on them by UK legislation and by
the Articles. In accordance with the Articles, the Board has the power
at any time to elect any person to be a Director. Any person so
appointed by the Directors will retire at the next Annual General
Meeting in accordance with the Articles; retiring Directors may be
eligible for annual re-election.
4,136,578 Ordinary Shares were cancelled on 4 April 2025 leaving a
balance of 165,244,983 Ordinary Shares and an issued share capital of
£1,652,449.83 as at 31 December 2025.. The Company did not acquire
any other Ordinary Shares during 2025 either itself or through a
person acting in his own name but on the Company’s behalf.
None of the circumstances referred to in paragraphs 8 and 9 of
Schedule 7 of the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 applies.
Paragraph 10 Schedule 7 of the Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations
2008 The Company’s policy is to:
• Give full and fair consideration to applications for employment made
by disabled persons.
• Continue the employment of, and arrange training for, employees
who have become disabled when they were employed by the
Company.
• Eliminate bias in relation to the training, career development and
promotion of disabled persons employed by the Company.
Paragraph 11 and 11A Schedule 7 of the Large and Medium-
sized Companies and Groups (Accounts and Reports)
Regulations 2008 Action taken to introduce, maintain or
develop arrangements aimed at the following is described on
pages 45-46:
• Providing employees with information on matters of concern to them
as employees.
• Consulting employees or their representatives on a regular basis so
that the employees’ views can be taken into account in making
decisions which are likely to affect their interests.
• Encouraging employee involvement in the Company’s performance by
an employees’ share scheme or other means.
• Achieving common employee awareness of the financial and
economic factors affecting the Company’s performance.
Paragraph 11B and 11C Schedule 7
A summary of the following is described on pages 10-11.
• How Directors have had regard to the need to foster the Company’s
business relationships with suppliers, customers and others.
• The effect of that regard on the principal decisions taken by the
Company during the financial year.
95 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Branches
The Company is registered in England and Wales and during 2018
moved its place of effective management and tax residence from the
Netherlands to the United Kingdom. As the Group is a global business,
our interests and activities are held or operated through subsidiaries
and branches and subject to the laws and regulations of many
different jurisdictions.
Share capital
As at 31 December 2024, the Company’s issued share capital was
£1,693,815.61 divided into 169,381,561 Ordinary Shares each having
a nominal value of £0.01. 4,136,578 Ordinary Shares were cancelled
on 4 April 2025 leaving a balance of 165,244,983 Ordinary Shares and
an issued share capital of £1,652,449.83 as at 31 December 2025.
All of the Company’s issued Ordinary Shares were fully paid up and
rank equally in all respects. The rights attached to the Ordinary Shares,
in addition to those conferred on their holders by law, are set out in
the Articles. The ordinary shareholders prior to the restructuring in
2023 were diluted to 11.1% subject to further dilution to 10% if the
warrants held by noteholders are exercised.
Intertrust Employee Benefit Trustee Limited (the Trust) holds shares in
the Company in trust for the purposes of the Company’s phantom
share option plan, and the rights attaching to these shares are
exercised by independent trustees. As at 31 December 2025, the Trust
held 294,887 Ordinary Shares in the Company.
Share rights
Without prejudice to any rights attached to any existing shares, the
Company may issue shares with rights or restrictions as determined
by either the shareholders by ordinary resolution or, subject to and in
default of such determination, the Board.
Voting rights
There are no restrictions on voting rights of shares in the Articles and
at a general meeting every shareholder present in person or by proxy
has one vote for every share held by him or her. No shareholder shall
be entitled to vote either personally or by proxy or to exercise any
other right in relation to general meetings if any sum due from him or
her to the Company in respect of that share remains unpaid.
Transfer of shares and warrants
The Articles provide that transfers of certificated shares must be
effected in writing duly signed by or on behalf of the transferor and,
except in the case of fully paid shares, by or on behalf of the
transferee. The transferor shall remain the holder of the shares
concerned until the name of the transferee is entered on the Register
of Members in respect of those shares. Transfers of uncertificated
shares may be effected by means of the relevant electronic system
unless the Uncertificated Securities Regulations 2001 provide
otherwise.
The Directors may refuse to register a transfer of shares in favour of
more than four persons jointly.
The warrants issued on 9 February 2023 are not transferable. There
are no other agreements between holders of securities that are
known to the Company and may restrict transfer of securities or
voting rights.
Directors, Articles and purchase of shares
The Articles were adopted on 29 April 2022 and may only be
amended by special resolution at a general meeting of the
shareholders (and where required, with the consent of the Warrant
Trustee).
The Directors’ powers are conferred on them by UK legislation and by
the Articles. In accordance with the Articles, the Board has the power
at any time to elect any person to be a Director. Any person so
appointed by the Directors will retire at the next Annual General
Meeting in accordance with the Articles; retiring Directors may be
eligible for annual re-election.
4,136,578 Ordinary Shares were cancelled on 4 April 2025 leaving a
balance of 165,244,983 Ordinary Shares and an issued share capital of
£1,652,449.83 as at 31 December 2025.. The Company did not acquire
any other Ordinary Shares during 2025 either itself or through a
person acting in his own name but on the Company’s behalf.
None of the circumstances referred to in paragraphs 8 and 9 of
Schedule 7 of the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 applies.
Paragraph 10 Schedule 7 of the Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations
2008 The Company’s policy is to:
• Give full and fair consideration to applications for employment made
by disabled persons.
• Continue the employment of, and arrange training for, employees
who have become disabled when they were employed by the
Company.
• Eliminate bias in relation to the training, career development and
promotion of disabled persons employed by the Company.
Paragraph 11 and 11A Schedule 7 of the Large and Medium-
sized Companies and Groups (Accounts and Reports)
Regulations 2008 Action taken to introduce, maintain or
develop arrangements aimed at the following is described on
pages 45-46:
• Providing employees with information on matters of concern to them
as employees.
• Consulting employees or their representatives on a regular basis so
that the employees’ views can be taken into account in making
decisions which are likely to affect their interests.
• Encouraging employee involvement in the Company’s performance by
an employees’ share scheme or other means.
• Achieving common employee awareness of the financial and
economic factors affecting the Company’s performance.
Paragraph 11B and 11C Schedule 7
A summary of the following is described on pages 10-11.
• How Directors have had regard to the need to foster the Company’s
business relationships with suppliers, customers and others.
• The effect of that regard on the principal decisions taken by the
Company during the financial year.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
96
CORPORATE GOVERNANCE
Shareholders holding 3% or more of the Company’s issued
share capital
As of 31 December 2025, the following significant shareholdings of
voting rights in the share capital of the Company had been disclosed
to the Company under Disclosure Guidance and Transparency Rule
(DTR) 5.
As at 25 April 2026, no disclosures were made in accordance with
DTR 5 since 31 December 2025.
Details of all information provided to the Company pursuant to
Financial Conduct Authority’s (FCA) DTRs is publicly available to view
via the regulatory information service on the Company’s website.
Financial risk management
The Company’s financial risk management objectives and policies,
including its use of financial instruments, can be found in Note 31 on
page 132 to the financial statements.
Change of control
The following are significant agreements the Company has entered
into which would be affected on a change of control of the Company
following a takeover:
• In the event of a takeover of the Company, all options under the
Company’s phantom share option plan shall be deemed to have
vested and the Board shall direct Intertrust Employee Benefit Trustee
Limited to allow each option-holder to exercise his or her options at
any time from the date of the change of control up to the 10th
anniversary of the date of grant (the Period). Any options that have
not been exercised will lapse at the end of the Period; and
• In the event of a takeover of the Company, all options under the
Company’s employee long-term incentive plan shall be deemed to
have vested and the Board shall direct Intertrust Employee Benefit
Trustee Limited to allow each option-holder to exercise his or her
options during the one-month period following the change of control
event. Any options that have not been exercised will lapse at the end
of this period.
As at 31 December 2025, the 2012 Bonds, SUNs and SSNs contained
change of control provisions. If a change of control occurs, the
Company was required to offer to repurchase the 2012 Bonds, SSNs
and SUNs at 101% of their principal amount, plus accrued and unpaid
interest to the date of the purchase.
There are no agreements between the Company and its Directors or
employees providing for compensation for loss of office or
employment or otherwise that occurs specifically because of a
takeover.
Corporate governance statement
Pursuant to Disclosure Guidance and Transparency Rule 7, certain
parts of the Corporate Governance statement are required to be
outlined in the Directors’ Report. This information is laid out in the
corporate governance section of this Annual Report. Information
regarding the main features of the Company’s internal control and risk
management arrangements in relation to the financial reporting
process can be found in the Strategic Report and the report of the
Audit Committee.
Important events since the end of the financial year
Major events after 31 December 2025 are disclosed in Note 32 to the
consolidated audited financial statements. This report was approved
by the Board on 25 April 2026.
On behalf of the Board
Viktor Gladun
Chief Executive Officer
25 April 2026
Nostrum Oil & Gas PLC, registered number 8717287
Name Number of
Ordinary
Shares
% of issued
Ordinary
Shares
Nature of
Holding
ICU Trading Ltd. and
Westal Holdings Ltd.
42,144,784 24.88 Direct
RD Energy Caspian
Holdings Limited
31,975,192 18.88 Direct
Amundi (UK) Limited and
Amundi Asset
Management
16,489,360 9.74 Direct
Armstrong Investments
Limited
11,389,000 6.89 Indirect
CORPORATE GOVERNANCE
Shareholders holding 3% or more of the Company’s issued
share capital
As of 31 December 2025, the following significant shareholdings of
voting rights in the share capital of the Company had been disclosed
to the Company under Disclosure Guidance and Transparency Rule
(DTR) 5.
As at 25 April 2026, no disclosures were made in accordance with
DTR 5 since 31 December 2025.
Details of all information provided to the Company pursuant to
Financial Conduct Authority’s (FCA) DTRs is publicly available to view
via the regulatory information service on the Company’s website.
Financial risk management
The Company’s financial risk management objectives and policies,
including its use of financial instruments, can be found in Note 31 on
page 132 to the financial statements.
Change of control
The following are significant agreements the Company has entered
into which would be affected on a change of control of the Company
following a takeover:
• In the event of a takeover of the Company, all options under the
Company’s phantom share option plan shall be deemed to have
vested and the Board shall direct Intertrust Employee Benefit Trustee
Limited to allow each option-holder to exercise his or her options at
any time from the date of the change of control up to the 10th
anniversary of the date of grant (the Period). Any options that have
not been exercised will lapse at the end of the Period; and
• In the event of a takeover of the Company, all options under the
Company’s employee long-term incentive plan shall be deemed to
have vested and the Board shall direct Intertrust Employee Benefit
Trustee Limited to allow each option-holder to exercise his or her
options during the one-month period following the change of control
event. Any options that have not been exercised will lapse at the end
of this period.
As at 31 December 2025, the 2012 Bonds, SUNs and SSNs contained
change of control provisions. If a change of control occurs, the
Company was required to offer to repurchase the 2012 Bonds, SSNs
and SUNs at 101% of their principal amount, plus accrued and unpaid
interest to the date of the purchase.
There are no agreements between the Company and its Directors or
employees providing for compensation for loss of office or
employment or otherwise that occurs specifically because of a
takeover.
Corporate governance statement
Pursuant to Disclosure Guidance and Transparency Rule 7, certain
parts of the Corporate Governance statement are required to be
outlined in the Directors’ Report. This information is laid out in the
corporate governance section of this Annual Report. Information
regarding the main features of the Company’s internal control and risk
management arrangements in relation to the financial reporting
process can be found in the Strategic Report and the report of the
Audit Committee.
Important events since the end of the financial year
Major events after 31 December 2025 are disclosed in Note 32 to the
consolidated audited financial statements. This report was approved
by the Board on 25 April 2026.
On behalf of the Board
Viktor Gladun
Chief Executive Officer
25 April 2026
Nostrum Oil & Gas PLC, registered number 8717287
Name Number of
Ordinary
Shares
% of issued
Ordinary
Shares
Nature of
Holding
ICU Trading Ltd. and
Westal Holdings Ltd.
42,144,784 24.88 Direct
RD Energy Caspian
Holdings Limited
31,975,192 18.88 Direct
Amundi (UK) Limited and
Amundi Asset
Management
16,489,360 9.74 Direct
Armstrong Investments
Limited
11,389,000 6.89 Indirect
DIRECTORS’ REPORT
97 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Responsibility statement
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare such financial
statements for each financial year that give a true and fair view of
the state of affairs of the Group and the Company as at the end of the
financial year, and of the profit or loss of the Group for the financial
year. Under that law the Directors have elected to prepare the Group
and Company financial statements in accordance with UK adopted
International Accounting Standards. Under company law, the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the
Group and the Parent Company and of their profit or loss for that
period.
In preparing these financial statements, the Directors are required to:
• Select suitable accounting policies in accordance with IAS 8 Accounting
Policies, Changes and Accounting Estimates and Errors and then apply
them consistently;
• Make judgements and accounting estimates that are reasonable and
prudent;
• Present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable
information;
• State that the Group and the Company have complied with the UK
adopted International Accounting Standards, subject to any material
departures disclosed and explained in the financial statements;
• Provide additional disclosures when compliance with specific
requirements of IFRS is insufficient to enable users to understand the
impact of particular transactions, other events and conditions on the
Group’s and Company’s financial position and performance; and
• Prepare the Group’s and Company’s financial statements on a going
concern basis, unless it is inappropriate to do so.
Having taken all the matters considered by the Board and brought to
the attention of the Board during the year into account, and having
reviewed the Annual Report (including the Strategic Report), the
Directors consider the Annual Report and Accounts, taken as a whole,
to be fair, balanced and understandable, providing the information
necessary for shareholders to assess the Company’s position and
performance, business model and strategy.
The Directors have responsibility for:
• Ensuring that the Company and the Group keep accounting records
which disclose with reasonable accuracy the financial position of the
Company and the Group and which enable them to ensure that its
financial statements and Directors’ Remuneration Report comply with
the Companies Act 2006;
• Taking such steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and other
irregularities; and
• The maintenance and integrity of the corporate and financial
information on the Company’s website.
Each of the Directors whose names and functions are listed on pages
66-67 confirms, that to the best of their knowledge:
• The Company and Group financial statements, which have been
prepared in accordance with the UK adopted International Accounting
Standards, give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole;
• The Strategic Report contained in the Annual Report includes a fair
review of the development and performance of the business and the
position of the Company and the undertakings included in the
consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face; and
• The Annual Report and financial statements, taken as a whole, are fair,
balanced and understandable and provide the information necessary
for shareholders to assess the Company’s position and performance,
business model and strategy.
By order of the Board
Viktor Gladun
Chief Executive Officer
25 April 2026
97 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Responsibility statement
The Directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare such financial
statements for each financial year that give a true and fair view of
the state of affairs of the Group and the Company as at the end of the
financial year, and of the profit or loss of the Group for the financial
year. Under that law the Directors have elected to prepare the Group
and Company financial statements in accordance with UK adopted
International Accounting Standards. Under company law, the
Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the
Group and the Parent Company and of their profit or loss for that
period.
In preparing these financial statements, the Directors are required to:
• Select suitable accounting policies in accordance with IAS 8 Accounting
Policies, Changes and Accounting Estimates and Errors and then apply
them consistently;
• Make judgements and accounting estimates that are reasonable and
prudent;
• Present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable
information;
• State that the Group and the Company have complied with the UK
adopted International Accounting Standards, subject to any material
departures disclosed and explained in the financial statements;
• Provide additional disclosures when compliance with specific
requirements of IFRS is insufficient to enable users to understand the
impact of particular transactions, other events and conditions on the
Group’s and Company’s financial position and performance; and
• Prepare the Group’s and Company’s financial statements on a going
concern basis, unless it is inappropriate to do so.
Having taken all the matters considered by the Board and brought to
the attention of the Board during the year into account, and having
reviewed the Annual Report (including the Strategic Report), the
Directors consider the Annual Report and Accounts, taken as a whole,
to be fair, balanced and understandable, providing the information
necessary for shareholders to assess the Company’s position and
performance, business model and strategy.
The Directors have responsibility for:
• Ensuring that the Company and the Group keep accounting records
which disclose with reasonable accuracy the financial position of the
Company and the Group and which enable them to ensure that its
financial statements and Directors’ Remuneration Report comply with
the Companies Act 2006;
• Taking such steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and other
irregularities; and
• The maintenance and integrity of the corporate and financial
information on the Company’s website.
Each of the Directors whose names and functions are listed on pages
66-67 confirms, that to the best of their knowledge:
• The Company and Group financial statements, which have been
prepared in accordance with the UK adopted International Accounting
Standards, give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole;
• The Strategic Report contained in the Annual Report includes a fair
review of the development and performance of the business and the
position of the Company and the undertakings included in the
consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face; and
• The Annual Report and financial statements, taken as a whole, are fair,
balanced and understandable and provide the information necessary
for shareholders to assess the Company’s position and performance,
business model and strategy.
By order of the Board
Viktor Gladun
Chief Executive Officer
25 April 2026
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
98
FINANCIAL REPORT
INDEPENDENT AUDITOR’S REPORT
Independent auditor’s report to the members of Nostrum Oil & Gas PLC
Opinion on the financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at
31 December 2025 and of the Group’s loss for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted international accounting
standards;
• the Parent Company financial statements have been properly prepared in accordance with UK adopted international
accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Nostrum Oil & Gas PLC (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the
year ended 31 December 2025 which comprise Consolidated statement of financial position, Consolidated statement of
comprehensive income, Consolidated statement of cash flows, Consolidated statement of changes in equity, Parent company
statement of financial position, parent company statement of cash flows, parent company statement of changes in equity and notes
to the financial statements, including a summary of material accounting policies. The financial reporting framework that has been
applied in their preparation is applicable law and UK adopted international accounting standards and, as regards the Parent
Company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.
Material uncertainty relating to going concern
We draw your attention to the Group’s Viability Statement on page 27, Note 2 to the Group financial statements on page 113
and Note 2 to the Parent Company financial statements on page 140 which explains that the Group’s Senior Secured Notes
(SSNs) and Senior Unsecured Notes (SUNs) (together, “the Notes”) are due to mature on 30 June 2026. The Group
has reached a principle agreement with a group of note holders representing more than 50% of the outstanding SSNs and
SUNs regarding a proposed extension of the maturity date to 31 December 2030. The agreement is not legally binding and is
subject to obtaining the required regulatory licences related to sanctioned noteholders and in the required timeframe which is
outside of the Group’s control.
At the date of signing these financial statements, there is no guarantee that the Group will reach a legally binding agreement within
the necessary timeframe. These circumstances indicate the existence of a material uncertainty that may cast significant doubt
upon the Group and Company’s ability to continue as a going concern and therefore it may be unable to realise its assets and
discharge its liabilities in the normal course of business. The financial statements do not include any adjustments that might be
necessary should the Group not continue as a going concern. Our opinion is not modified in respect of this matter.
For the reason set out above and based on our risk assessment, we determined going concern to be a key audit matter.
FINANCIAL REPORT
INDEPENDENT AUDITOR’S REPORT
Independent auditor’s report to the members of Nostrum Oil & Gas PLC
Opinion on the financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at
31 December 2025 and of the Group’s loss for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted international accounting
standards;
• the Parent Company financial statements have been properly prepared in accordance with UK adopted international
accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Nostrum Oil & Gas PLC (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the
year ended 31 December 2025 which comprise Consolidated statement of financial position, Consolidated statement of
comprehensive income, Consolidated statement of cash flows, Consolidated statement of changes in equity, Parent company
statement of financial position, parent company statement of cash flows, parent company statement of changes in equity and notes
to the financial statements, including a summary of material accounting policies. The financial reporting framework that has been
applied in their preparation is applicable law and UK adopted international accounting standards and, as regards the Parent
Company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Independence
We remain independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.
Material uncertainty relating to going concern
We draw your attention to the Group’s Viability Statement on page 27, Note 2 to the Group financial statements on page 113
and Note 2 to the Parent Company financial statements on page 140 which explains that the Group’s Senior Secured Notes
(SSNs) and Senior Unsecured Notes (SUNs) (together, “the Notes”) are due to mature on 30 June 2026. The Group
has reached a principle agreement with a group of note holders representing more than 50% of the outstanding SSNs and
SUNs regarding a proposed extension of the maturity date to 31 December 2030. The agreement is not legally binding and is
subject to obtaining the required regulatory licences related to sanctioned noteholders and in the required timeframe which is
outside of the Group’s control.
At the date of signing these financial statements, there is no guarantee that the Group will reach a legally binding agreement within
the necessary timeframe. These circumstances indicate the existence of a material uncertainty that may cast significant doubt
upon the Group and Company’s ability to continue as a going concern and therefore it may be unable to realise its assets and
discharge its liabilities in the normal course of business. The financial statements do not include any adjustments that might be
necessary should the Group not continue as a going concern. Our opinion is not modified in respect of this matter.
For the reason set out above and based on our risk assessment, we determined going concern to be a key audit matter.
INDEPENDENT AUDITOR’S REPORT
99 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Our evaluation of the directors’ assessment of the Group’s and the Parent Company’s ability to continue to adopt the going
concern basis of accounting included:
• Obtained the going concern assessment prepared by Management, including the cash flow forecasts for the going
concern period and assessed the appropriateness of the process undertaken by management in preparing the
assessment.
• Reviewed the cash flow model adopted by Management to support the going concern basis of preparation, the controls
around the model and sensitivities considered within the model.
• Challenged key assumptions and sensitivity scenarios used in the model and cross referencing to the work performed
in the impairment review for consistency.
• Assessed the mathematical accuracy and integrity of the model.
• Reviewed the indicative term sheets for the bond restructuring to ensure correctly reflected in the liquidity model, and
held discussion with the Group legal counsel to understand the impact of failing to renew the OFAC sanction licences
within the required timeframe;
• Re-performed covenant compliance testing and assessed the impact in the cash flow modelling.
• Reviewed the viability statement and the assessment performed to support the statement made.
• Reviewed and challenged the disclosure within the financial statements for transparency.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in t he
preparation of the financial statements is appropriate.
In relation to the Group’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the directors’ statement in the financial statements about whether the directors consider ed it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
Overview
Key audit matters
2025
1. Carrying value of the producing assets ✓
2. Going concern ✓
Materiality Group financial statements as a whole
$965,000 based on 2.25% of a 3 year averaged EBITDA.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, the applicable financial reporting
framework and the Group’s system of internal control. On the basis of this, we identified and assessed the risks of material
misstatement of the Group financial statements including with respect to the consolidation process.
We then applied professional judgement to focus our audit procedures on the areas that posed the greatest risks to the group
financial statements. We continually assessed risks throughout our audit, revising the risks where necessary, with the aim of
reducing the group risk of material misstatement to an acceptable level, in order to provide a basis for our opinion.
Components in scope
From the above risk assessment and planning procedures, we determined which of the Group’s components were likely to
include risks of material misstatement relevant to the Group’s financial statements. We then determined the type of procedure s
to be performed at these components, and the extent to which component auditors were required to be involved.
99 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Our evaluation of the directors’ assessment of the Group’s and the Parent Company’s ability to continue to adopt the going
concern basis of accounting included:
• Obtained the going concern assessment prepared by Management, including the cash flow forecasts for the going
concern period and assessed the appropriateness of the process undertaken by management in preparing the
assessment.
• Reviewed the cash flow model adopted by Management to support the going concern basis of preparation, the controls
around the model and sensitivities considered within the model.
• Challenged key assumptions and sensitivity scenarios used in the model and cross referencing to the work performed
in the impairment review for consistency.
• Assessed the mathematical accuracy and integrity of the model.
• Reviewed the indicative term sheets for the bond restructuring to ensure correctly reflected in the liquidity model, and
held discussion with the Group legal counsel to understand the impact of failing to renew the OFAC sanction licences
within the required timeframe;
• Re-performed covenant compliance testing and assessed the impact in the cash flow modelling.
• Reviewed the viability statement and the assessment performed to support the statement made.
• Reviewed and challenged the disclosure within the financial statements for transparency.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in t he
preparation of the financial statements is appropriate.
In relation to the Group’s reporting on how it has applied the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the directors’ statement in the financial statements about whether the directors consider ed it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
Overview
Key audit matters
2025
1. Carrying value of the producing assets ✓
2. Going concern ✓
Materiality Group financial statements as a whole
$965,000 based on 2.25% of a 3 year averaged EBITDA.
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, the applicable financial reporting
framework and the Group’s system of internal control. On the basis of this, we identified and assessed the risks of material
misstatement of the Group financial statements including with respect to the consolidation process.
We then applied professional judgement to focus our audit procedures on the areas that posed the greatest risks to the group
financial statements. We continually assessed risks throughout our audit, revising the risks where necessary, with the aim of
reducing the group risk of material misstatement to an acceptable level, in order to provide a basis for our opinion.
Components in scope
From the above risk assessment and planning procedures, we determined which of the Group’s components were likely to
include risks of material misstatement relevant to the Group’s financial statements. We then determined the type of procedure s
to be performed at these components, and the extent to which component auditors were required to be involved.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
100
FINANCIAL REPORT
For components in scope, we used a combination of risk assessment procedures and further audit procedures to obtain sufficient
appropriate evidence. As part of performing our Group audit, we have determined the components in scope as follows:
Component Component Name Entity Group Audit Scope
1 Parent Nostrum Oil & Gas
Plc
Procedures on the entire financial
information of the component
2 Kazakhstan Zhaikmunai LLP
Positiv Invest LLP
Procedures on the entire financial
information of the component
3 Intermediate holding
companies
Nostrum Oil & Gas
Finance BV
Nostrum Oil & Gas
Coöperatief UA
Nostrum Services N.V.
Procedures on one or more classes
of transactions, account balances or
disclosures
The remaining entities were not assessed as in the scope of the group audit.
In determining components, we have considered how components are organised within the Group, and the commonality of
control environments, legal and regulatory framework, and level of aggregation associated with individual entities. Whilst there
is relative commonality of controls across the group, differences in jurisdictional risk, and the legal and regulatory frameworks
under which the entities operate, prevent the further amalgamation of components.
Locations
Nostrum Oil & Gas PLC’s operations are spread over a number of different geographical locations. We visited the Group’s
operating component in Kazakhstan at the planning and execution phases of our audit. We visited the producing field and
processing facilities at the as well as the Group’s administrative offices in Uralsk.
Working with other auditors
As Group auditor, we determined the components at which audit work was performed, together with the resources needed to
perform this work. These resources included component auditors, who formed part of the group engagement team. As Group
auditor we are solely responsible for expressing an opinion on the financial statements.
In working with these component auditors, we held discussions with component audit teams on the significant areas of the group
audit relevant to the components based on our assessment of the group risks of material misstatement. We issued our group
audit instructions to component auditors on the nature and extent of their participation and role in the group audit, and on the
group risks of material misstatement.
We directed, supervised and reviewed the component auditors’ work. This included holding meetings and calls during various
phases of the audit, and reviewing component auditor files in person in Kazakhstan and remotely during which we evaluated the
appropriateness of the audit procedures performed and the results thereof.
Climate change
Our work on the assessment of potential impacts of climate-related risks on the Group’s operations and financial statements
included:
• Enquiries and challenge of management and any other relevant party to understand the actions they have taken to
identify climate-related risks and their potential impacts on the financial statements and adequately disclose climate-
related risks within the annual report;
• Our own qualitative risk assessment taking into consideration the sector in which the Group/Company operates and
how climate change affects this particular sector; and
• Review of the minutes of Board and Audit Committee meeting and any other relevant party and other papers related to
climate change and performed a risk assessment as to how the impact of the Group’s commitment as set out in the
Strategic Report may affect the financial statements and our audit.
We challenged the extent to which climate-related considerations, including the expected cash flows from the initiatives and
commitments have been reflected, where appropriate, in the Director’s going concern and viability assessment and in
management’s judgements and estimates in relation to impairment assessments.
The management disclosures on pages 56-62 form part of the directors’ report. Our responsibilities in relation to these
disclosures are described in the relevant section of this report and our procedures on these disclosures therefore consisted
solely of considering whether they are materially inconsistent with the financial statements or our knowledge obtained from the
audit or otherwise appear to be materially misstated.
FINANCIAL REPORT
For components in scope, we used a combination of risk assessment procedures and further audit procedures to obtain sufficient
appropriate evidence. As part of performing our Group audit, we have determined the components in scope as follows:
Component Component Name Entity Group Audit Scope
1 Parent Nostrum Oil & Gas
Plc
Procedures on the entire financial
information of the component
2 Kazakhstan Zhaikmunai LLP
Positiv Invest LLP
Procedures on the entire financial
information of the component
3 Intermediate holding
companies
Nostrum Oil & Gas
Finance BV
Nostrum Oil & Gas
Coöperatief UA
Nostrum Services N.V.
Procedures on one or more classes
of transactions, account balances or
disclosures
The remaining entities were not assessed as in the scope of the group audit.
In determining components, we have considered how components are organised within the Group, and the commonality of
control environments, legal and regulatory framework, and level of aggregation associated with individual entities. Whilst there
is relative commonality of controls across the group, differences in jurisdictional risk, and the legal and regulatory frameworks
under which the entities operate, prevent the further amalgamation of components.
Locations
Nostrum Oil & Gas PLC’s operations are spread over a number of different geographical locations. We visited the Group’s
operating component in Kazakhstan at the planning and execution phases of our audit. We visited the producing field and
processing facilities at the as well as the Group’s administrative offices in Uralsk.
Working with other auditors
As Group auditor, we determined the components at which audit work was performed, together with the resources needed to
perform this work. These resources included component auditors, who formed part of the group engagement team. As Group
auditor we are solely responsible for expressing an opinion on the financial statements.
In working with these component auditors, we held discussions with component audit teams on the significant areas of the group
audit relevant to the components based on our assessment of the group risks of material misstatement. We issued our group
audit instructions to component auditors on the nature and extent of their participation and role in the group audit, and on the
group risks of material misstatement.
We directed, supervised and reviewed the component auditors’ work. This included holding meetings and calls during various
phases of the audit, and reviewing component auditor files in person in Kazakhstan and remotely during which we evaluated the
appropriateness of the audit procedures performed and the results thereof.
Climate change
Our work on the assessment of potential impacts of climate-related risks on the Group’s operations and financial statements
included:
• Enquiries and challenge of management and any other relevant party to understand the actions they have taken to
identify climate-related risks and their potential impacts on the financial statements and adequately disclose climate-
related risks within the annual report;
• Our own qualitative risk assessment taking into consideration the sector in which the Group/Company operates and
how climate change affects this particular sector; and
• Review of the minutes of Board and Audit Committee meeting and any other relevant party and other papers related to
climate change and performed a risk assessment as to how the impact of the Group’s commitment as set out in the
Strategic Report may affect the financial statements and our audit.
We challenged the extent to which climate-related considerations, including the expected cash flows from the initiatives and
commitments have been reflected, where appropriate, in the Director’s going concern and viability assessment and in
management’s judgements and estimates in relation to impairment assessments.
The management disclosures on pages 56-62 form part of the directors’ report. Our responsibilities in relation to these
disclosures are described in the relevant section of this report and our procedures on these disclosures therefore consisted
solely of considering whether they are materially inconsistent with the financial statements or our knowledge obtained from the
audit or otherwise appear to be materially misstated.
INDEPENDENT AUDITOR’S REPORT
101 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Based on our risk assessment procedures, we did not identify there to be any Key Audit Matters that were materially affected by
climate-related risks. We highlight, however, that we considered the applicability of this risk in relation to the Key Audit Matter
pertaining to the impairment of producing assets in Kazakhstan.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources
in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters
described below to be the key audit matters to be communicated in our report.
Key audit matter How the scope of our audit addressed the key audit
matter
Carrying
value of the
producing
assets
(References:
Accounting
policy and
Critical
accounting
estimations
and
judgements –
Note 4,
Property, plant
and
equipment,
Note 5 –
Property, plant
and
equipment)
The Group’s oil and gas properties with a
carrying amount of US$267.0 million (2024:
US$363.0 million) as disclosed in Note 5 to the
financial statements, are reviewed annually for
indicators of impairment.
If such indicators are identified, management
estimate the asset’s recoverable amount.
There is significant judgement in management’s
assessment of the recoverable amount of these
assets, which are sensitive to changes in key
assumptions such as estimation of future prices
of oil, natural gas and related products, the
discount rate applied to future cash flow
forecasts and the assumptions relevant to
production volumes.
Additionally, the Group’s use of a single cash -
generating unit (CGU) for impairment testing
purposes, encompassing all assets of the
Chinarevskoye field and related facilities,
requires careful consideration given the
potential for independent cash flows from
certain assets.
There is a risk that inappropriate judgements or
assumptions may be applied, which could
materially misstate the recoverable amount and
result in an overstatement of asset values or
understatement of an impairment charge.
We have performed the following procedures in respect
of the impairment and production fixed assets:
• Evaluated management’s assessment for indicators
of impairment, considering the macro-economic
factors, including commodity prices, discount and
inflation rates, the decline curve analysis and
updated reserve estimates and production volumes
and costs.
• Evaluated management’s assessment of cash -
generating units (CGUs) to determine whether the
use of a single CGU and corresponding impairment
model was appropriate based on the Group’s
processing facilities, upstream fields and related
infrastructure being closely tied together
economically.
• Assessed the methodology applied in preparing the
discounted cash flow model based on the fair value
less costs of disposal as opposed to the value in use
method.
• With the assistance of valuation experts, reviewed
the appropriateness of the weighted average cost of
capital (WACC) applied, including benchmarking
discount rate assumptions to reflect the Group’s
specific risk profile.
• Reviewed and challenged the key assumptions in
managements model, including the PSA licence
period, reserve estimates, commodity pricing, the
impact of climate change and assumptions made
connected to the ongoing geopolitical uncertainty.
• We have performed, in conjunction with the
component auditor, the following procedures in
respect of the impairment and production fixed
assets:
o Evaluated the oil and gas price assumptions by
comparing forecast prices to current market data,
including forward price curves, broker estimates,
and other long-term forecasts.
o Evaluated the inclusion of the new tolling
agreement with Ural O&G which reduces the
sales price and increases volume with the model.
o Evaluated the reasonableness of the life of field
plans by reconciling the production profiles
against the latest Management update to the
reserve estimates and resource statements.
o Reviewed management ability to forecast
accurately by comparing the actual results in
2025 to the 2024 forecasts.
o Checked the mathematical integrity of the model.
101 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Based on our risk assessment procedures, we did not identify there to be any Key Audit Matters that were materially affected by
climate-related risks. We highlight, however, that we considered the applicability of this risk in relation to the Key Audit Matter
pertaining to the impairment of producing assets in Kazakhstan.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources
in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters
described below to be the key audit matters to be communicated in our report.
Key audit matter How the scope of our audit addressed the key audit
matter
Carrying
value of the
producing
assets
(References:
Accounting
policy and
Critical
accounting
estimations
and
judgements –
Note 4,
Property, plant
and
equipment,
Note 5 –
Property, plant
and
equipment)
The Group’s oil and gas properties with a
carrying amount of US$267.0 million (2024:
US$363.0 million) as disclosed in Note 5 to the
financial statements, are reviewed annually for
indicators of impairment.
If such indicators are identified, management
estimate the asset’s recoverable amount.
There is significant judgement in management’s
assessment of the recoverable amount of these
assets, which are sensitive to changes in key
assumptions such as estimation of future prices
of oil, natural gas and related products, the
discount rate applied to future cash flow
forecasts and the assumptions relevant to
production volumes.
Additionally, the Group’s use of a single cash -
generating unit (CGU) for impairment testing
purposes, encompassing all assets of the
Chinarevskoye field and related facilities,
requires careful consideration given the
potential for independent cash flows from
certain assets.
There is a risk that inappropriate judgements or
assumptions may be applied, which could
materially misstate the recoverable amount and
result in an overstatement of asset values or
understatement of an impairment charge.
We have performed the following procedures in respect
of the impairment and production fixed assets:
• Evaluated management’s assessment for indicators
of impairment, considering the macro-economic
factors, including commodity prices, discount and
inflation rates, the decline curve analysis and
updated reserve estimates and production volumes
and costs.
• Evaluated management’s assessment of cash -
generating units (CGUs) to determine whether the
use of a single CGU and corresponding impairment
model was appropriate based on the Group’s
processing facilities, upstream fields and related
infrastructure being closely tied together
economically.
• Assessed the methodology applied in preparing the
discounted cash flow model based on the fair value
less costs of disposal as opposed to the value in use
method.
• With the assistance of valuation experts, reviewed
the appropriateness of the weighted average cost of
capital (WACC) applied, including benchmarking
discount rate assumptions to reflect the Group’s
specific risk profile.
• Reviewed and challenged the key assumptions in
managements model, including the PSA licence
period, reserve estimates, commodity pricing, the
impact of climate change and assumptions made
connected to the ongoing geopolitical uncertainty.
• We have performed, in conjunction with the
component auditor, the following procedures in
respect of the impairment and production fixed
assets:
o Evaluated the oil and gas price assumptions by
comparing forecast prices to current market data,
including forward price curves, broker estimates,
and other long-term forecasts.
o Evaluated the inclusion of the new tolling
agreement with Ural O&G which reduces the
sales price and increases volume with the model.
o Evaluated the reasonableness of the life of field
plans by reconciling the production profiles
against the latest Management update to the
reserve estimates and resource statements.
o Reviewed management ability to forecast
accurately by comparing the actual results in
2025 to the 2024 forecasts.
o Checked the mathematical integrity of the model.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
102
FINANCIAL REPORT
• Evaluated the appropriates of the reserves and
resources inputs into the impairment model in
comparison to the asset retirement obligation
and going concern models.
• Performed sensitivity analysis over the life of
field plans to determine the extent that changes
to commodity prices, extension of existing
PSA’s and discount rates would impact the
model
Ensured sufficient and appropriate disclosures
are included in the financial statements.
Key observations:
We found the key judgements made by management in
assessing the carrying value of the producing assets to
be reasonable.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We
consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions
of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these
levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Group financial statements Parent company financial statements
2025 2025
Materiality $965,000 $2,400,000*
Basis for determining
materiality
2.25% of 3 year averaged EBITDA 2% of Net assets
Rationale for the
benchmark applied
EBITDA was deemed to be the appropriate
benchmark for the calculation of Group
materiality as this is a KPI for the Group in the
assessment of the performance of management,
and market and analyst commentary also uses
EBITDA to comment on the performance of the
Group. In our opinion this is therefore the
benchmark with which the users of the financial
statements are principally concerned.
There are no specific KPIs relating to the
Parent Entity. The entity does not trade, it
acts as a holding company for the Group
and the only ‘material’ balance on the
statement of Financial Position is the
financial guarantee. This benchmark aligns
with the focus of key stakeholders. In our
opinion this is therefore the benchmark with
which the users of the financial statements
are principally concerned.
Performance materiality $579,000 $1,440,000
Basis for determining
performance materiality
60% of the above materiality levels 60% of the above materiality levels
Rationale for the
percentage applied for
performance materiality
The percentages applied reflected our
assessment of aggregation risk, the nature of the
Group’s operations, and our expectation of the
level of misstatement based on our risk
assessment.
The percentages applied reflected our
assessment of aggregation risk, the nature
of the Company’s operations, and our
expectation of the level of misstatement
based on our risk assessment.
* The materiality set for the Parent Company is higher than that of the Group, reflecting the presence of a significant guaranteed
liability in the Parent’s financial statements which is eliminated on consolidation. While this balance is material at the P arent
level, it does not impact the consolidated financial statements and is therefore not relevant to the Group accounts. However, for
the purposes of obtaining audit evidence to support the Group audit opinion, we applied a lower component materiality to the
Parent Company. This lower threshold ensures sufficient coverage over balances and transactions which are included in the
consolidation.
FINANCIAL REPORT
• Evaluated the appropriates of the reserves and
resources inputs into the impairment model in
comparison to the asset retirement obligation
and going concern models.
• Performed sensitivity analysis over the life of
field plans to determine the extent that changes
to commodity prices, extension of existing
PSA’s and discount rates would impact the
model
Ensured sufficient and appropriate disclosures
are included in the financial statements.
Key observations:
We found the key judgements made by management in
assessing the carrying value of the producing assets to
be reasonable.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We
consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions
of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these
levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Group financial statements Parent company financial statements
2025 2025
Materiality $965,000 $2,400,000*
Basis for determining
materiality
2.25% of 3 year averaged EBITDA 2% of Net assets
Rationale for the
benchmark applied
EBITDA was deemed to be the appropriate
benchmark for the calculation of Group
materiality as this is a KPI for the Group in the
assessment of the performance of management,
and market and analyst commentary also uses
EBITDA to comment on the performance of the
Group. In our opinion this is therefore the
benchmark with which the users of the financial
statements are principally concerned.
There are no specific KPIs relating to the
Parent Entity. The entity does not trade, it
acts as a holding company for the Group
and the only ‘material’ balance on the
statement of Financial Position is the
financial guarantee. This benchmark aligns
with the focus of key stakeholders. In our
opinion this is therefore the benchmark with
which the users of the financial statements
are principally concerned.
Performance materiality $579,000 $1,440,000
Basis for determining
performance materiality
60% of the above materiality levels 60% of the above materiality levels
Rationale for the
percentage applied for
performance materiality
The percentages applied reflected our
assessment of aggregation risk, the nature of the
Group’s operations, and our expectation of the
level of misstatement based on our risk
assessment.
The percentages applied reflected our
assessment of aggregation risk, the nature
of the Company’s operations, and our
expectation of the level of misstatement
based on our risk assessment.
* The materiality set for the Parent Company is higher than that of the Group, reflecting the presence of a significant guaranteed
liability in the Parent’s financial statements which is eliminated on consolidation. While this balance is material at the P arent
level, it does not impact the consolidated financial statements and is therefore not relevant to the Group accounts. However, for
the purposes of obtaining audit evidence to support the Group audit opinion, we applied a lower component materiality to the
Parent Company. This lower threshold ensures sufficient coverage over balances and transactions which are included in the
consolidation.
INDEPENDENT AUDITOR’S REPORT
103 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Component performance materiality
For the purposes of our Group audit opinion, we set performance materiality for each component of the Group, apart from the
Parent Company whose materiality and performance materiality are set out above, based on a percentage of between 31% and
54% of Group performance materiality dependent on a number of factors including our assessment of the risk of material
misstatement of those components. Component performance materiality ranged from $300,000 to $520,000.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of $48,000. We also
agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the document
entitled annual report other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements,
we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based
on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Corporate governance statement
As a Company in the Transition category of the main market and it has voluntarily adopted the UK Corporate Governance Code
of 2024, we are required to review the Directors’ statement in relation to going concern, longer -term viability and that part of the
Corporate Governance Statement relating to the Parent Company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements, or our knowledge obtained during the audit.
Going concern and
longer term viability
• The Directors' statement with regards to the appropriateness of adopting the going concern basis
of accounting and any material uncertainties identified set out on pages 27 and 32;
• The Directors’ explanation as to their assessment of the Group’s prospects, the period this
assessment covers and why the period is appropriate set out on page 27; and
Other Code
provisions
• Directors' statement on fair, balanced and understandable set out on page 97;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks
set out on pages 22 to 26;
• The section of the annual report that describes the review of effectiveness of risk management and
internal control systems set out on page 20; and
• The section describing the work of the audit committee set out on pages 75 to 79 Other Companies
Act 2006 reporting
103 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Component performance materiality
For the purposes of our Group audit opinion, we set performance materiality for each component of the Group, apart from the
Parent Company whose materiality and performance materiality are set out above, based on a percentage of between 31% and
54% of Group performance materiality dependent on a number of factors including our assessment of the risk of material
misstatement of those components. Component performance materiality ranged from $300,000 to $520,000.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of $48,000. We also
agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the document
entitled annual report other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements,
we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based
on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Corporate governance statement
As a Company in the Transition category of the main market and it has voluntarily adopted the UK Corporate Governance Code
of 2024, we are required to review the Directors’ statement in relation to going concern, longer -term viability and that part of the
Corporate Governance Statement relating to the Parent Company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements, or our knowledge obtained during the audit.
Going concern and
longer term viability
• The Directors' statement with regards to the appropriateness of adopting the going concern basis
of accounting and any material uncertainties identified set out on pages 27 and 32;
• The Directors’ explanation as to their assessment of the Group’s prospects, the period this
assessment covers and why the period is appropriate set out on page 27; and
Other Code
provisions
• Directors' statement on fair, balanced and understandable set out on page 97;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks
set out on pages 22 to 26;
• The section of the annual report that describes the review of effectiveness of risk management and
internal control systems set out on page 20; and
• The section describing the work of the audit committee set out on pages 75 to 79 Other Companies
Act 2006 reporting
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
104
FINANCIAL REPORT
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report
and Directors’
report
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
• the Strategic report and the Directors’ report have been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and understanding of the Group and Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic
report or the Directors’ report.
Directors’
remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Matters on which
we are required to
report by
exception
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate
for our audit have not been received from branches not visited by us; or
• the Parent Company financial statements are not in agreement with the accounting records and
returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Responsibilities statement, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s abili ty
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of
the Parent Company and management.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud is detailed below:
FINANCIAL REPORT
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic report
and Directors’
report
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial year for
which the financial statements are prepared is consistent with the financial statements; and
• the Strategic report and the Directors’ report have been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and understanding of the Group and Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic
report or the Directors’ report.
Directors’
remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
Matters on which
we are required to
report by
exception
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate
for our audit have not been received from branches not visited by us; or
• the Parent Company financial statements are not in agreement with the accounting records and
returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Responsibilities statement, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent Company’s abili ty
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of
the Parent Company and management.
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including fraud is detailed below:
INDEPENDENT AUDITOR’S REPORT
105 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Non-compliance with laws and regulations
Based on:
• Our understanding of the Group and the industry in which it operates;
• Discussion with management and those charged with governance, legal counsel and the Audit Committee etc;
• Obtaining an understanding of the Group’s policies and procedures regarding compliance with laws and regulations;
we considered the significant laws and regulations to be:
• UK-adopted international accounting standards,
• the Companies Act 2006,
• the UK Corporate Governance Code,
• the Listing Rules and Disclosure and Transparency Rules,
• Subsoil use and PSA-related regulations (including the PSA agreement itself and relevant subsoil use legislation),
• Decommissioning obligations under applicable environmental and subsoil legislation;
• Health and safety regulations (including occupational health and safety requirements);
• Environmental regulations (primarily governed by the Environmental Code of the Republic of Kazakhstan),
• Anti-bribery and corruption legislation,
• Employment taxes (including payroll-related taxes and social contributions);
• UK Corporate income tax and VAT legislation, and Corporate income tax and VAT legislation (as per the Tax Code of
the Republic of Kazakhstan).
The Group is also subject to laws and regulations where the consequence of non-compliance could have a material effect on
the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified
such laws and regulations to be the Kazakhstan tax legislation.
Our procedures in respect of the above included:
• Review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and
regulations;
• Review of correspondence with regulatory and tax authorities for any instances of non-compliance with laws and
regulations;
• Review of financial statement disclosures and agreeing to supporting documentation;
• Involvement of tax specialists in the audit; and
• Review of legal expenditure accounts to understand the nature of expenditure incurred.
• Discussed with management, those charge with governance, local and group legal counsel, and internal and external
taxation specialists the ongoing litigation relating to the withholding tax claims; and corroborated these discussions to
support such as legal correspondence and third party letters.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment
procedures included:
• Enquiry with management and those charged with governance and the Audit Committee, regarding any known or
suspected instances of fraud;
• Obtaining an understanding of the Group’s policies and procedures relating to:
o Detecting and responding to the risks of fraud; and
o Internal controls established to mitigate risks related to fraud.
• Review of minutes of meetings of those charged with governance for any known or suspected instances of fraud;
• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud;
• Re-performing covenant compliance testing to assess impact in the cash flow modelling; and
• Considering remuneration incentive schemes and performance targets and the related financial statement areas
impacted by these.
Based on our risk assessment, we considered the areas most susceptible to fraud to be Management override of controls and
revenue recognition.
105 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Non-compliance with laws and regulations
Based on:
• Our understanding of the Group and the industry in which it operates;
• Discussion with management and those charged with governance, legal counsel and the Audit Committee etc;
• Obtaining an understanding of the Group’s policies and procedures regarding compliance with laws and regulations;
we considered the significant laws and regulations to be:
• UK-adopted international accounting standards,
• the Companies Act 2006,
• the UK Corporate Governance Code,
• the Listing Rules and Disclosure and Transparency Rules,
• Subsoil use and PSA-related regulations (including the PSA agreement itself and relevant subsoil use legislation),
• Decommissioning obligations under applicable environmental and subsoil legislation;
• Health and safety regulations (including occupational health and safety requirements);
• Environmental regulations (primarily governed by the Environmental Code of the Republic of Kazakhstan),
• Anti-bribery and corruption legislation,
• Employment taxes (including payroll-related taxes and social contributions);
• UK Corporate income tax and VAT legislation, and Corporate income tax and VAT legislation (as per the Tax Code of
the Republic of Kazakhstan).
The Group is also subject to laws and regulations where the consequence of non-compliance could have a material effect on
the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified
such laws and regulations to be the Kazakhstan tax legislation.
Our procedures in respect of the above included:
• Review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and
regulations;
• Review of correspondence with regulatory and tax authorities for any instances of non-compliance with laws and
regulations;
• Review of financial statement disclosures and agreeing to supporting documentation;
• Involvement of tax specialists in the audit; and
• Review of legal expenditure accounts to understand the nature of expenditure incurred.
• Discussed with management, those charge with governance, local and group legal counsel, and internal and external
taxation specialists the ongoing litigation relating to the withholding tax claims; and corroborated these discussions to
support such as legal correspondence and third party letters.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment
procedures included:
• Enquiry with management and those charged with governance and the Audit Committee, regarding any known or
suspected instances of fraud;
• Obtaining an understanding of the Group’s policies and procedures relating to:
o Detecting and responding to the risks of fraud; and
o Internal controls established to mitigate risks related to fraud.
• Review of minutes of meetings of those charged with governance for any known or suspected instances of fraud;
• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud;
• Re-performing covenant compliance testing to assess impact in the cash flow modelling; and
• Considering remuneration incentive schemes and performance targets and the related financial statement areas
impacted by these.
Based on our risk assessment, we considered the areas most susceptible to fraud to be Management override of controls and
revenue recognition.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
106
FINANCIAL REPORT
We addressed the fraud risk in relation to revenue recognition, by testing all material revenue transactions to supporting
documentation, including testing revenue transactions in the period preceding and subsequent to year end to check that revenue
was recognised in the correct period. In addition, we obtained direct confirmations from key customers for the sales made during
the year.
We addressed the risk of management override of controls by,
• Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting
documentation; and
• Significant estimates made by management for bias, which include those in Management’s assessment of the carrying
value of the producing assets, decommissioning provision and abandonment fund, oil and gas reserves estimate,
uncertain tax positions and for the Parent Company, valuation of the financial guarantee.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members,
including component auditors, who were all deemed to have appropriate competence and capabilities and remained alert to any
indications of fraud or non-compliance with laws and regulations throughout the audit. For component auditors, we also reviewed
the result of their work performed in this regard.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that
the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the
events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matters which we are required to address
We were appointed by the directors of Nostrum Oil & Gas PLC on 19 November 2025 to audit the financial statements for the
period ending 31 December 2025 and subsequent financial periods. Our total uninterrupted period of engagement is 1 year,
covering the year ended 31 December 2025.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or Parent Company and we
remain independent of the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit committee.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
Paul Randall (Senior Statutory Auditor)
For and on behalf of RPGCC LLP, Statutory Auditor
London, United Kingdom
28 April 2026
RPG Crouch Chapman LLP is a limited liability partnership registered in England and Wales (with registered number OC375705).
FINANCIAL REPORT
We addressed the fraud risk in relation to revenue recognition, by testing all material revenue transactions to supporting
documentation, including testing revenue transactions in the period preceding and subsequent to year end to check that revenue
was recognised in the correct period. In addition, we obtained direct confirmations from key customers for the sales made during
the year.
We addressed the risk of management override of controls by,
• Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting
documentation; and
• Significant estimates made by management for bias, which include those in Management’s assessment of the carrying
value of the producing assets, decommissioning provision and abandonment fund, oil and gas reserves estimate,
uncertain tax positions and for the Parent Company, valuation of the financial guarantee.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members,
including component auditors, who were all deemed to have appropriate competence and capabilities and remained alert to any
indications of fraud or non-compliance with laws and regulations throughout the audit. For component auditors, we also reviewed
the result of their work performed in this regard.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that
the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the
events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Other matters which we are required to address
We were appointed by the directors of Nostrum Oil & Gas PLC on 19 November 2025 to audit the financial statements for the
period ending 31 December 2025 and subsequent financial periods. Our total uninterrupted period of engagement is 1 year,
covering the year ended 31 December 2025.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or Parent Company and we
remain independent of the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit committee.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
Paul Randall (Senior Statutory Auditor)
For and on behalf of RPGCC LLP, Statutory Auditor
London, United Kingdom
28 April 2026
RPG Crouch Chapman LLP is a limited liability partnership registered in England and Wales (with registered number OC375705).
107
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
CONSOLIDATED FINANCIAL STATEMENTS
Contents
Consolidated statement of financial position ....................... 108
Consolidated statement of comprehensive income ............. 109
Consolidated statement of cash flows .................................. 110
Consolidated statement of changes in equity ....................... 111
Notes to the consolidated financial statements ................... 112
1. G ENERAL ................................................................ 112
2. B ASIS OF PREPARATION AND CONSOLIDATION ................. 113
3. C HANGES IN ACCOUNTING POLICIES AND DISCLOSURES ..... 114
4. S UMMARY OF MATERIAL ACCOUNTING POLICIES .............. 115
5. P ROPERTY , PLANT AND EQUIPMENT .............................. 123
6. N ON - CURRENT ADVANCES AND OTHER ASSETS ................ 124
7. I NVENTORIES ........................................................... 124
8. O THER CURRENT ASSETS ............................................. 124
9. T RADE RECEIVABLES .................................................. 124
10. C ASH AND CASH EQUIVALENTS ..................................... 124
11. S HARE CAPITAL AND RESERVES ..................................... 124
12. E ARNINGS PER SHARE ................................................ 125
13. N OTES PAYABLE AND ACCUMULATED INTEREST ............... 125
14. A BANDONMENT AND SITE RESTORATION PROVISION ........ 127
15. D UE TO G OVERNMENT OF K AZAKHSTAN ........................ 127
16. T RADE PAYABLES ...................................................... 127
17. A DVANCES RECEIVED ................................................. 127
18. O THER CURRENT LIABILITIES ........................................ 127
19. R EVENUE ................................................................ 128
20. C OST OF SALES ......................................................... 128
21. G ENERAL AND ADMINISTRATIVE EXPENSES ..................... 128
22. S ELLING AND TRANSPORTATION EXPENSES ..................... 128
23. T AXES OTHER THAN INCOME TAX ................................. 128
24. F INANCE COSTS ........................................................ 128
25. E MPLOYEES ’ REMUNERATION ...................................... 128
26. O THER INCOME AND OTHER EXPENSES .......................... 129
27. I NCOME TAX ............................................................ 130
28. R ELATED PARTY TRANSACTIONS ................................... 131
29. A UDIT AND NON - AUDIT FEES ....................................... 131
30. C ONTINGENT LIABILITIES AND COMMITMENTS ................ 131
31. F INANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES . 132
32. E VENTS AFTER THE REPORTING DATE ............................. 133
CONSOLIDATED FINANCIAL STATEMENTS
Contents
Consolidated statement of financial position ....................... 108
Consolidated statement of comprehensive income ............. 109
Consolidated statement of cash flows .................................. 110
Consolidated statement of changes in equity ....................... 111
Notes to the consolidated financial statements ................... 112
1. G ENERAL ................................................................ 112
2. B ASIS OF PREPARATION AND CONSOLIDATION ................. 113
3. C HANGES IN ACCOUNTING POLICIES AND DISCLOSURES ..... 114
4. S UMMARY OF MATERIAL ACCOUNTING POLICIES .............. 115
5. P ROPERTY , PLANT AND EQUIPMENT .............................. 123
6. N ON - CURRENT ADVANCES AND OTHER ASSETS ................ 124
7. I NVENTORIES ........................................................... 124
8. O THER CURRENT ASSETS ............................................. 124
9. T RADE RECEIVABLES .................................................. 124
10. C ASH AND CASH EQUIVALENTS ..................................... 124
11. S HARE CAPITAL AND RESERVES ..................................... 124
12. E ARNINGS PER SHARE ................................................ 125
13. N OTES PAYABLE AND ACCUMULATED INTEREST ............... 125
14. A BANDONMENT AND SITE RESTORATION PROVISION ........ 127
15. D UE TO G OVERNMENT OF K AZAKHSTAN ........................ 127
16. T RADE PAYABLES ...................................................... 127
17. A DVANCES RECEIVED ................................................. 127
18. O THER CURRENT LIABILITIES ........................................ 127
19. R EVENUE ................................................................ 128
20. C OST OF SALES ......................................................... 128
21. G ENERAL AND ADMINISTRATIVE EXPENSES ..................... 128
22. S ELLING AND TRANSPORTATION EXPENSES ..................... 128
23. T AXES OTHER THAN INCOME TAX ................................. 128
24. F INANCE COSTS ........................................................ 128
25. E MPLOYEES ’ REMUNERATION ...................................... 128
26. O THER INCOME AND OTHER EXPENSES .......................... 129
27. I NCOME TAX ............................................................ 130
28. R ELATED PARTY TRANSACTIONS ................................... 131
29. A UDIT AND NON - AUDIT FEES ....................................... 131
30. C ONTINGENT LIABILITIES AND COMMITMENTS ................ 131
31. F INANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES . 132
32. E VENTS AFTER THE REPORTING DATE ............................. 133
The accounting policies and explanatory notes on pages 112 through 134 are an integral part of these consolidated financial statements.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025 108
FINANCIAL REPORT
Consolidated statement of financial position
The consolidated financial statements of Nostrum Oil & Gas PLC, registered number 8717287, were authorised for issue by the Board of Directors
on 25 April 2026. Signed on behalf of the Board:
Mr. Viktor Gladun
Chief Executive Officer
25 April 2026
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025 108
FINANCIAL REPORT
Consolidated statement of financial position
| In thousands of US Dollars | Notes | As at 31 December2025 | As at 31 December2024 |
| Assets | |||
| Non-current assets | |||
| Property, plant and equipment | 5 |
|
|
| Advances and other non-current assets | 6 |
|
|
| Restricted cash | 10 |
|
|
|
|
|
||
| Current assets | |||
| Inventories | 7 |
|
|
| Other current assets | 8 |
|
|
| Income tax prepayment | 27 |
|
|
| Trade receivables | 9 |
|
|
| Cash and cash equivalents | 10 |
|
|
|
|
|
||
| TOTAL ASSETS |
|
|
|
| Equity and liabilities | |||
| Share capital and reserves | 11 | ||
| Share capital |
|
|
|
| Treasury capital |
( |
( |
|
| Share premium |
|
|
|
| Retained deficit and reserves |
( |
( |
|
| Attributable to owners of Nostrum Oil & Gas PLC |
( |
( |
|
| Non-controlling interest |
( |
|
|
|
( |
( |
||
| Non-current liabilities | |||
| Notes payable and accumulated interest | 13 |
|
|
| Principal |
|
|
|
| Arrangement fees and fair value adjustments |
|
( |
|
| Abandonment and site restoration provision | 14 |
|
|
| Amounts due to Government of Kazakhstan | 15 |
|
|
| Deferred tax liability | 27 |
|
|
|
|
|
||
| Current liabilities | |||
| Notes payable and accumulated interest | 13 |
|
|
| Principal |
|
|
|
| Arrangement fees and fair value adjustments |
( |
|
|
| PIK coupon payable |
|
|
|
| Cash coupon payable |
|
|
|
| Trade payables | 16 |
|
|
| Advances received | 17 |
|
|
| Current tax payable |
|
|
|
| Current portion of amounts due to Government of Kazakhstan | 15 |
|
|
| Other current liabilities | 18 |
|
|
|
|
|
||
| TOTAL EQUITY AND LIABILITIES |
|
|
The consolidated financial statements of Nostrum Oil & Gas PLC, registered number 8717287, were authorised for issue by the Board of Directors
on 25 April 2026. Signed on behalf of the Board:
Mr. Viktor Gladun
Chief Executive Officer
25 April 2026
CONSOLIDATED FINANCIAL STATEMENTS
The accounting policies and explanatory notes on pages 112 through 134 are an integral part of these consolidated financial statements.
109 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
All items in the above statement are derived from continuing operations.
The accounting policies and explanatory notes on pages 112 through 134 are an integral part of these consolidated financial statements.
109 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| For the year ended 31 December | |||
| In thousands of US Dollars | Notes | 2025 | 2024 |
| Revenue | |||
| Revenue from export sales |
|
|
|
| Revenue from domestic sales and tolling fees |
|
|
|
| 19 |
|
|
|
| Cost of sales | 20 |
( |
( |
| Gross profit |
|
|
|
| General and administrative expenses | 21 |
( |
( |
| Selling and transportation expenses | 22 |
( |
( |
| Taxes other than income tax | 23 |
( |
( |
| Finance costs | 24 |
( |
( |
| Impairment charge/ (reversal) | 4 |
( |
|
| Foreign exchange gain, net |
|
|
|
| Interest income |
|
|
|
| Other income | 26 |
|
|
| Other expenses | 26 |
( |
( |
| (Loss)/income before income tax |
( |
|
|
| Current income tax expense |
( |
( |
|
| Deferred income tax benefit/(charge) |
|
( |
|
| Income tax expense | 27 |
|
( |
| Loss for the year |
( |
( |
|
| Currency translation difference |
( |
( |
|
| Other comprehensive income/(loss) for the year |
( |
( |
|
| Total comprehensive loss for the year |
( |
( |
|
| Loss for the year attributable to non-controlling interests |
( |
( |
|
| Loss for the year attributable to the shareholders |
( |
( |
|
| Weighted average number of shares (Note 12) |
|
|
|
| Basic and diluted loss per share (in US dollars) | 12 |
( |
( |
All items in the above statement are derived from continuing operations.
The accounting policies and explanatory notes on pages 112 through 134 are an integral part of these consolidated financial statements.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025 110
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF CASH FLOWS
“Other finance costs” for the year ended 31 December 2025 include first part of consent fees in the amount of US$1,975 thousand paid by the
Group in relation to the delay in payment of coupon on bonds, which were due on 30 June 2025 and 31 December 2025 (see Note 1 for more
details). The second installment in the amount of US$1,967 thousand has been transferred to the trustee as of reporting date, and distributed to
the noteholders in early January 2026. “Other finance costs” also include bank charges in the amount of US$775 thousand (2024: US$1,226
thousand).
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025 110
FINANCIAL REPORT
CONSOLIDATED STATEMENT OF CASH FLOWS
| For the year ended 31 December | |||
| In thousands of US Dollars | Notes | 2025 | 2024 |
| Cash flows from operating activities:(Loss)/income before income tax |
( |
|
|
| Adjustments for: | |||
| Depreciation, depletion and amortisation | 20, 21 |
|
|
| Impairment charge/ (reversal) | 4 |
|
( |
| Finance costs | 24 |
|
|
| Income from cancellation of SSNs and SUNs | 13 |
( |
|
| Interest income |
( |
( |
|
| Foreign exchange loss on investing and financing activities |
|
|
|
| Loss on disposal of property, plant and equipment |
|
|
|
| Operating profit before working capital changes |
|
|
|
| Changes in working capital: | |||
| Change in inventories |
( |
( |
|
| Change in trade receivables |
( |
|
|
| Change in prepayments and other current assets |
( |
|
|
| Change in trade payables |
|
( |
|
| Change in advances received |
( |
|
|
| Change in due to Government of Kazakhstan |
( |
( |
|
| Change in other current liabilities |
|
( |
|
| Cash from operations |
|
|
|
| Income tax paid |
( |
( |
|
| Cash from operations |
|
|
|
| Cash flows from investing activities: | |||
| Interest received |
|
|
|
| Purchase of property, plant and equipment |
( |
( |
|
| Expenditures on exploration and evaluation assets |
|
( |
|
| Transfer to restricted cash |
( |
( |
|
| Net cash used in investing activities |
( |
( |
|
| Cash flows from financing activities: | |||
| Finance costs paid |
|
( |
|
| Other finance costs |
( |
( |
|
| Return of unclaimed SSNs and SUNs coupons | 13 |
|
|
| Net cash from/(used) in financing activities |
( |
( |
|
| Effects of exchange rate changes on cash |
|
( |
|
| Net decrease in cash and cash equivalents |
( |
( |
|
| Cash and cash equivalents at the beginning of the period | 10 |
|
|
| Cash and cash equivalents at the end of the period | 10 |
|
|
“Other finance costs” for the year ended 31 December 2025 include first part of consent fees in the amount of US$1,975 thousand paid by the
Group in relation to the delay in payment of coupon on bonds, which were due on 30 June 2025 and 31 December 2025 (see Note 1 for more
details). The second installment in the amount of US$1,967 thousand has been transferred to the trustee as of reporting date, and distributed to
the noteholders in early January 2026. “Other finance costs” also include bank charges in the amount of US$775 thousand (2024: US$1,226
thousand).
CONSOLIDATED FINANCIAL STATEMENTS
The accounting policies and explanatory notes on pages 112 through 134 are an integral part of these consolidated financial statements.
111 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
* The gain on debt-to-equity exchange is reclassified as share premium in accordance with the requirements of the Companies Act 2006
** Long-Term Incentive Plan (“LTIP”)
The accounting policies and explanatory notes on pages 112 through 134 are an integral part of these consolidated financial statements.
111 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| Attributable to owners of Nostrum Oil & Gas PLC | |||||||||
| In thousands of US Dollars | Notes | Sharecapital | Treasurycapital | Deferredshares | Sharepremium | Otherreserves(Note 11) | Retaineddeficit | Non-controllinginterest | Total |
| As at 1 January 2024 |
|
( |
|
|
|
( |
|
( |
|
| Loss for the year |
|
|
|
|
|
( |
( |
( |
|
| Other comprehensive loss |
|
|
|
|
( |
|
|
( |
|
| Total comprehensive loss for the year |
|
|
|
|
( |
( |
( |
( |
|
| Redemption of deferred shares | 11 |
|
|
( |
|
|
|
|
|
| As at 31 December 2024 |
|
( |
|
|
|
( |
|
( |
|
| Loss for the year |
|
|
|
|
|
( |
( |
( |
|
| Cancellation of shares |
( |
|
|
|
|
|
|
|
|
| Other comprehensive loss |
|
|
|
|
( |
|
|
( |
|
| Total comprehensive loss for the year |
( |
|
|
|
( |
( |
( |
( |
|
| As at 31 December 2025 |
|
( |
|
|
|
( |
( |
( |
|
* The gain on debt-to-equity exchange is reclassified as share premium in accordance with the requirements of the Companies Act 2006
** Long-Term Incentive Plan (“LTIP”)
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
112
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
General
Overview
Nostrum Oil & Gas PLC (“the Company” or “the Parent”) is a public limited
company incorporated on 3 October 2013 under the Companies Act 2006 and
registered in England and Wales with registered number 8717287. The
registered address of Nostrum Oil & Gas PLC is: 20 Eastbourne Terrace, London ,
W2 6LG, UK.
These consolidated financial statements include the financial position and the
results of the operations of Nostrum Oil & Gas PLC and its following
subsidiaries:
Nostrum Oil & Gas PLC and its subsidiaries are hereinafter referred to as “the
Group”.
The Group’s operations are primarily conducted through its oil and gas
producing entity Zhaikmunai LLP located in Kazakhstan and represent a single
operating segment including all Group’s assets related to its Chinarevskoye
field, including surface facilities, and Stepnoy Leopard Fields.
On 12 June 2025 Midstream Energy Company LLP was established in the
Republic of Kazakhstan. The company is a wholly owned subsidiary of Nostrum
Oil & Gas Finance B.V. and was created to support the Group’s midstream
operations. In October 2025, Midstream Energy Company LLP suspended its
operations.
Z haikmunai LLP carries out its activities in accordance with the Contract for
Additional Exploration, Production and Production-Sharing of Crude
Hydrocarbons in the Chinarevskoye oil and gas condensate field (the
“Contract”) dated 31 October 1997 between the State Committee of
Investments of the Republic of Kazakhstan and Zhaikmunai LLP in accordance
with the license MG No. 253D for the exploration and production of
hydrocarbons in Chinarevskoye oil and gas condensate field.
The term of the Chinarevskoye subsoil use rights included a 5-year exploration
period followed by a 25-year production period with the Contract being valid
until 26 May 2031.
Positiv Invest LLP holds the rights to the "Kamenskoe" and "Kamensko-
Teplovsko-Tokarevskoe" areas in the West Kazakhstan region (the “Stepnoy
Leopard Fields”), located approximately 80 km from Nostrum’s existing gas
treatment facilities, and has a subsurface contract valid until December 2044.
On August 20, 2024, Nostrum Oil & Gas Coöperatief U.A. transferred its 80%
participating interest in Positiv Invest LLP and its 100% participating interest in
Zhaikmunai LLP to Nostrum Oil & Gas Finance B.V. This reorganisation
consolidates ownership of the Group’s primary assets, including the
Chinarevskoye field operated by Zhaikmunai LLP and the Stepnoy Leopard
Fields managed by Positiv Invest LLP, under a single entity, enhancing
operational alignment and strategic focus.
As at 31 December 2025 the Group employed 595 employees (31 December
2024: 605).
Royalty payments
Zhaikmunai LLP is required to make monthly royalty payments during the
Contract production period, at the rates specified in the Contract.
Royalty rates depend on hydrocarbons recovery levels and the phase of
production and can vary from 3% to 7% of produced crude oil and from 4% to
9% of produced natural gas. Royalty is accounted on a gross basis.
Government profit share
Zhaikmunai LLP makes payments to the Government for the Government’s
profit share as determined in the Contract. The profit share depends on
hydrocarbon production levels and varies from 10% to 40% of production after
deducting royalties and reimbursable expenditures. Reimbursable expenditures
include operating expenses, costs of additional exploration and development
costs. Government profit share is expensed as incurred and paid in cash.
Government profit share is accounted on a gross basis.
Group debt restructuring
During H2 2025 and early 2026,
one of the strategic objectives of the Company
and the Group was the restructuring of its Senior Secured Notes (SSN) and
Senior Unsecured Notes (SUN) both maturing on 30 June 2026 ) with the
objective of supporting its strategic growth initiatives and maximizing
stakeholder value.
In 2025, Group was required to have paid accrued interest in accordance with
the terms and conditions of the outstanding notes by 30 June and 31
December 2025, but such amount remains unpaid. The delay was the result of
the continuing payment administration issue. Group has applied for the
applicable regulatory licences to make interest payments, and meanwhile had
announced two consent fee payments as set out in the terms of the consent
solicitation.
The management and the Board has engaged with noteholders in relation to
the potential restructuring of the Notes, and on 30 March 2026, the Group
announced that it has reached an in principle agreement with an ad hoc group
of beneficial owners of the SSNs and the SUNs regarding the key commercial
terms for a proposed extension of the maturity date of the SSNs and the SUNs
to 31 December 2030 (as more specifically described the below, the "Proposed
Transaction")
.
More specifically, the Proposed Transaction contemplates the following:
•
Extension.
An extension of the maturity date of the SSNs and the SUNs
from 30 June 2026 to 31 December 2030.
•
Cash coupon.
Effective from 1 July 2026 an increase in the cash pay interest
rate of the SSNs from 5.00% to 5.50% per annum; and an increase in the cash
pay interest rate of the SUNs from 1.00% to 2.00% per annum, with the
removal of the payment-in-kind (PIK)
interest rate.
•
Capitalisation of interest.
An option for the Company to elect to capitalise
payments of interest as determined by the board based on working capital
needs, provided that such election cannot be made in respect of two
consecutive interest periods.
•
PIK coupon accrued. As at the date of the Proposed Transaction, any SUN
payment-in-kind interest for each of the interest payment dates falling on 30
June 2025, 31 December 2025 and 30 June 2026, and which has not been
allocated to the principal amount of the SUNs through the clearing system,
shall be deemed to be issued and capitalised.
•
Tender for repurchase of Notes.
An invitation to holders of the SSNs and
SUNs to tender their Notes for repurchase in the form of a reverse Dutch
auction:
- SSNs: subject to a consideration cap of up to US$30 million, with an
expected acceptable price range of 40-60c (the "Available
Consideration");
FINANCIAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
| Company | Registered office | Form of capital | Owner- ship, % |
| Nostrum Oil & Gas Holding Ltd. | 20 Eastbourne Terrace, London, W2 6LA, | Ordinary shares | 100 |
| United Kingdom | |||
| Nostrum Oil & Gas B.V. | Anna van Buerenplein 41 A, Unit 4.27, 2595DA The Hague, | Ordinary shares | 100 |
| The Netherlands | |||
| Nostrum Oil & Gas Finance B.V. | Anna van Buerenplein 41 A, Unit 4.27, 2595DA The Hague, | Ordinary shares | 100 |
| The Netherlands | |||
| Nostrum Oil & Gas Coöperatief U.A. | Anna van Buerenplein 41 A, Unit 4.27, 2595DA The Hague, | Members' interests | 100 |
| The Netherlands | |||
| Nostrum Services N.V. | Chaussee de Wavre 20, 1360 Perwez, Belgium | Ordinary shares | 100 |
| Zhaikmunai LLP | 43/1 Karev street, 090000 Uralsk,Republic of Kazakhstan | Participatory interests | 100 |
| Positiv Invest LLP | 43/1 Karev street, 090000 Uralsk,Republic of Kazakhstan | Participatory interests | 80 |
| Midstream Energy Company LLP | 43B Karev street, 090000 Uralsk,Republic of Kazakhstan | Participatory interests | 100 |
| Nostrum Services Central Asia LLP | Aksai 3a, 75/38, 050031 Almaty,Republic of Kazakhstan | Participatory interests | 100 |
| Nostrum Associated Investments LLP | 43B Karev street, 090000 Uralsk,Republic of Kazakhstan | Participatory interests | 100 |
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements (continued)
113 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
- SUNs: subject to a consideration cap of the Available Consideration (if
any) remaining following the SSN Offer, with an expected acceptable
price range of 16-22c;
- The final acceptable price ranges are subject to market conditions and
the circumstances of the Group at the time the Proposed Transaction
is implemented.
•
Security. SUNs shall receive the same security as the SSNs on a second
ranking basis;
•
Warrants. the existing warrants shall expire as at the date the Proposed
Transaction transaction is implemented.
The launch of the the Proposed Transaction described above is subject to
required additional regulatory licences related to sanctioned noteholders. The
Group is working to obtain the foregoing as soon as practicable.
Pending receipt of such additional regulatory licences, the Group does not
expect to be in a position to make any interest payments with respect to the
SSNs and the SUNs.
Consent fees will continue to be payable to applicable non-sanctioned
noteholders with respect to interest payments that fall due (if any) on the same
basis as described in the Issuer's consent solicitation memorandum dated 2
September 2025.
2.
Basis of preparation and consolidation
Basis of preparation
These consolidated financial statements for the year ended 31 December 2025
have been prepared in accordance with the UK adopted International
Accounting Standards and those parts of the Companies Act 2006 that are
relevant to companies which report in accordance with UK adopted IFRS. The
consolidated financial statements have been prepared based on a historical
cost basis (Note 4).
The consolidated financial statements are presented in US dollars and all values
are rounded to the nearest thousand, except when otherwise indicated. The
preparation of consolidated financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also requires from
management to exercise its judgment in the process of applying the Group's
accounting policies. The areas involving a higher degree of judgment or
complexity, or areas where assumptions and estimates are significant to the
consolidated financial statements are disclosed in Note 4. The Group recognises
that there may be potential financial implications in the future from changes in
legislation and regulation implemented to address climate change risk. Over
time these changes may have an impact across a number of areas of
accounting including asset impairment, increased costs, provisions, onerous
contracts and contingent liabilities. For more details regarding climate risk
please see pages 24-25. However, as at the reporting date, the Group believes
there is no material impact on the balance sheet carrying values of assets or
liabilities. This is not considered a significant estimate.
Basis of consolidation
The consolidated financial statements comprise the financial statements of the
Parent and its subsidiaries as at 31 December 2025. Control is achieved when
the Group is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its power
over the investee. Specifically, the Group controls an investee if, and only if, the
Group has:
• power over the investee (i.e., existing rights that give it the current ability to
direct the relevant activities of the investee);
• exposure, or rights, to variable returns from its involvement with the
investee;
• the ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights results in
control. To support this presumption and when the Group has less than a
majority of the voting or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power over an
investee, including:
• the contractual arrangement with the other vote holders of the investee;
• rights arising from other contractual arrangements;
• the Group’s voting rights and potential voting rights.
• The Group re-assesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control
of the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated
financial statements from the date the Group gains control until the date the
Group ceases to control the subsidiary.
Subsidiaries
Nostrum Oil & Gas Holding Limited registered and incorporated in England
and Wales under Companies Number 14419330 is exempt from the
requirements of the UK Companies Act 2006 relating to the audit of the
individual accounts by virtue of section 479A of the Act.
Going concern
The Group monitors on an ongoing basis its liquidity position, near-term
forecasts, and key financial ratios to ensure that sufficient funds are available to
meet its commitments as they arise and liabilities as they fall due. The Group
reforecasts its rolling 3-year cashflows on a quarterly basis and stress tests its
future liquidity position for changes in product prices, production volumes,
costs and other significant events.
The Directors are focused on a range of potential opportunities and actions
aimed at improving the liquidity outlook in the near-term and creating value
from long-term growth opportunities. These actions include, amongst other
things, the ongoing base case scenario efforts to further optimize capital
expenditures, operating expenses and general and administration expenses,
improving netbacks realized from product sales, and increasing utilisation of
the Group’s processing infrastructure.
The Directors’ going concern assessment is supported by the future cash flow
forecasts covering the going concern period to 30 June 2027. As at 31
December 2025, the Group had unrestricted cash balances of US$143.3 million
(including liquid current investments of US$136.0 million) and US$17.0 million
held in the debt reserve service account (DSRA). The Base Case reflects
production forecasts consistent with the Board approved plans, assumes a
Brent oil price of US$85/bbl for the rest of 2026 and US$75/bbl for 2027 and
onwards, includes minimum licence commitment expenditures for the
Chinarevskoye and Stepnoy Leopard Fields, and assumes completion of the
Proposed Transaction before 30 June 2026 (please refer to page 34). Under this
Base Case, the Group forecasts to have a closing cash balance of more than
US$115 million as of 30 June 2027.
The Base Case has been tested for sensitivity against the key assumptions,
including a US$15/bbl reduction in Brent oil prices, a 10% reduction in forecast
Chinarevskoye production and third-party UOG processing volumes, a 10%
increase in operating and G&A expenses, additional contingent capital
expenditure, and possible tax and other audit fines and penalties. Based on this
analysis, assuming that the Proposed Transaction is completed, the Directors
concluded that the Group would be able to withstand downside movements in
these assumptions individually, and in combination. In addition, a reverse stress
testing was performed by modelling a combination of all downside sensitivities,
in which case the Company might be unable to meet its liabilities as they fall
due before the end of the going concern assessment period, however such
scenario is not considered plausible.
On 30 March 2026 the Group announced that it has reached an in-principle
agreement with an ad hoc group of beneficial owners of its Notes regarding the
key commercial terms for a proposed extension of the maturity date of the
SSNs and the SUNs to 31 December 2030 (the “Proposed Transaction”), as
more fully described on page 34 . Whilst this marked a key milestone in the
Company’s bond restructuring process and established an agreed framework
for the proposed amend-and-extend transaction, the Proposed Transaction had
not, as at the date of the approval of these financial statements, been
contractually completed. The completion of the Proposed Transaction remains
subject to a number of further steps and conditions, including:
• the receipt of required regulatory and sanctions-related and approvals
relevant to the implementation of the Proposed Transaction;
• completion of the consent solicitations in respect of the SSNs and SUNs and
the related SSN offer process; and
Notes to the consolidated financial statements (continued)
113 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
114
FINANCIAL REPORT
• completion of the remaining transaction documentation and
implementation steps.
The Group is continuing to pursue the required licences and approvals as soon
as practicable. Pending receipt of the relevant sanctions-related licences, the
Group does not expect to be in a position to make interest payments in respect
of the SSNs and the SUNs.
As at the date of approval of these consolidated financial statements, the
above matters remained unresolved, with the outcomes uncertain and largely
outside of the Group’s control. If one or more of these matters is not resolved
in time, the Proposed Transaction may not be completed on the agreed terms,
or at all, before the existing SSNs and SUNs mature on 30 June 2026.
Accordingly, there is a material uncertainty related to events and conditions
that may cast significant doubt on the Group’s and the Company’s ability to
continue as a going concern for the going concern period to 30 June 2027.
Directors have also considered the risks and uncertainties that tax legislation
and practice in Kazakhstan can be subject to differing interpretations by tax
authorities and courts, with an unfavourable outcome for the Group as further
described in the Notes 30 and 32 to the consolidated financial statements.
However, the Directors intends to continue to defend the Group’s position in
these matters through the available administrative, judicial and other legal
processes, and have included any impact of these matters in the future cash
flow forecasts.
After careful consideration, and assuming completion of the Proposed
Transaction substantially in accordance with the terms currently contemplated,
the Directors have concluded that it remains appropriate to prepare the
consolidated financial statements on a going concern basis. On that basis, the
Directors have a reasonable expectation that the Group will have sufficient
financial resources to continue in operation throughout the going concern
period to 30 June 2027. The Directors have also considered events and
conditions beyond that period, and draw attention to the Viability Statement
on pages 27-28.
In accordance with Provision 30 of the UK Corporate Governance Code 2024,
the Directors consider it appropriate to adopt the going concern basis of
accounting in preparing these consolidated financial statements. Accordingly,
the consolidated financial statements do not include any adjustments to the
carrying amount or classification of assets and liabilities that would result if the
Group were unable to continue as a going concern.
If the Group is unable to complete the Proposed Transaction and is therefore
unable to realise its assets and discharge its liabilities in the normal course of
business, adjustments may be required in future to the carrying amounts and
classifications of assets and liabilities in the statement of financial position.
3. Changes in accounting policies and disclosures
New standards, interpretations and amendments adopted by the Group
The accounting policies adopted in the preparation of the financial statements
are consistent with those followed in the preparation of the Group’s annual
financial statements for the year ended 31 December 2024, except for the
adoption of new standards effective as of 1 January 2025. The Group has not
early adopted any standard, interpretation or amendment that has been issued
but is not yet effective.
Several amendments apply for the first time in 2025, but do not have an impact
on the financial statements of the Group.
Lack of exchangeability - Amendments to IAS 21
The amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates
specify how an entity should assess whether a currency is exchangeable and
how it should determine a spot exchange rate when exchangeability is lacking.
The amendments also require disclosure of information that enables users of
its financial statements to understand how the currency not being
exchangeable into the other currency affects, or is expected to affect, the
entity’s financial performance, financial position and cash flows.
The amendments are effective for annual reporting periods beginning on or
after 1 January 2025.
When applying the amendments, an entity cannot restate comparative
information.
The amendments did not have a material impact on the Group’s interim
condensed financial statements.
Standards issued but not yet effective
The new and amended standards and interpretations that are issued, but not
yet effective, up to the date of issuance of the Group’s financial statements are
disclosed below. The Group intends to adopt these new and amended
standards and interpretations, if applicable, when they become effective.
IFRS 18 Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of
Financial Statements. IFRS 18 introduces new requirements for presentation
within the statement of profit or loss, including specified totals and subtotals.
Furthermore, entities are required to classify all income and expenses within
the statement of profit or loss into one of five categories: operating, investing,
financing, income taxes and discontinued operations, whereof the first three
are new.
It also requires disclosure of newly defined management-defined performance
measures, subtotals of income and expenses, and includes new requirements
for aggregation and disaggregation of financial information based on the
identified ‘roles’ of the primary financial statements (PFS) and the notes.
In addition, narrow-scope amendments have been made to IAS 7 Statement of
Cash Flows, which include changing the starting point for determining cash
flows from operations under the indirect method, from ‘profit or loss’ to
‘operating profit or loss’ and removing the optionality around classification of
cash flows from dividends and interest. In addition, there are consequential
amendments to several other standards.
IFRS 18, and the amendments to the other standards, is effective for reporting
periods beginning on or after 1 January 2027, but earlier application is
permitted and must be disclosed. IFRS 18 will apply retrospectively.
The Group is currently working to identify all impacts the amendments will
have on the primary financial statements and notes to the financial statements.
IFRS 19 Subsidiaries without Public Accountability: Disclosures
In May 2024, the IASB issued IFRS 19, which allows eligible entities to elect to
apply its reduced disclosure requirements while still applying the recognition,
measurement and presentation requirements in other IFRS accounting
standards. To be eligible, at the end of the reporting period, an entity must be a
subsidiary as defined in IFRS 10, cannot have public accountability and must
have a parent (ultimate or intermediate) that prepares financial statements,
available for public use, which comply with IFRS accounting standards.
IFRS 19 will become effective for reporting periods beginning on or after 1
January 2027, with early application permitted.
As the Group’s debt instruments are publicly traded, it is not eligible to elect to
apply IFRS 19.
Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9
and IFRS 7
In December 2024, the IASB issued Contracts Referencing Nature-dependent
Electricity (Amendments to IFRS 9 and IFRS 7). The amendments include:
• Clarifying the application of the ‘own-use’ requirements;
• Permitting hedge accounting if these contracts are used as hedging
instruments;
• Adding new disclosure requirements to enable investors to understand
the effect of these contracts on a company’s financial performance and
cash flows.
The amendments will be effective for annual reporting periods beginning on or
after 1 January 2026. Early adoption is permitted, but will need to be disclosed.
The clarifications regarding the ‘own use’ requirements must be applied
retrospectively, but the guidance permitting hedge accounting have to be
applied prospectively to new hedging relationships designated on or after the
date of initial application.
The amendments are not expected to have a material impact on the Group’s
financial statements.
FINANCIAL REPORT
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements (continued)
115 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Amendments to the Classification and Measurement of Financial Instruments
– Amendments to IFRS 9 and IFRS 7
In May 2024, the IASB issued Amendments to the Classification and
Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7),
which:
• Clarifies that a financial liability is derecognised on the ‘settlement
date’, i.e., when the related obligation is discharged, cancelled, expires
or the liability otherwise qualifies for derecognition. It also introduces
an accounting policy option to derecognise financial liabilities that are
settled through an electronic payment system before settlement date if
certain conditions are met;
• Clarified how to assess the contractual cash flow characteristics of
financial assets that include environmental, social and governance
(ESG)-linked features and other similar contingent features;
• Clarifies the treatment of non-recourse assets and contractually linked
instruments.
Requires additional disclosures in IFRS 7 for financial assets and liabilities with
contractual terms that reference a contingent event (including those that are
ESG-linked), and equity instruments classified at fair value through other
comprehensive income.
The publication of the amendments concludes the classification and
measurement phase of the lASB’s post implementation review (PIR) of IFRS 9
Financial Instruments.
The amendments will be effective for annual reporting periods beginning on or
after 1 January 2026. Entities can early adopt the amendments that relate to
the classification of financial assets plus the related disclosures and apply the
other amendments later.
The new requirements will be applied retrospectively with an adjustment to
opening retained earnings. Prior periods are not required to be restated and
can only be restated without using hindsight. An entity is required to disclose
information about financial assets that change their measurement category
due to the amendments.
The amendments are not expected to have a material impact on the Group’s
financial statements.
4.
Summary of material accounting policies
Exploration expenditure
Costs directly associated with the acquisition of Positiv Invest LLP and the
subsequent well appraisal costs were capitalised within exploration and
evaluation assets until the reserves appraisal phase is completed and the
commercial viability of field development had been proven.
These costs included employee remuneration, materials, fuel used, rig costs,
payments made to contractors, and asset retirement obligation fees.
If hydrocarbons are discovered and, subject to further appraisal activity (e.g.,
the drilling of additional wells), it is probable that they can be commercially
developed, the costs continue to be carried as an asset while sufficient /
continued progress is made in assessing the commerciality of the
hydrocarbons.
All such carried costs are subject to technical, commercial and management
review at least once a year to confirm the continued intent to develop or
otherwise extract value from the discovery, which is subject to estimation
uncertainties. When this is no longer the case, the costs are written off.
Subsoil use rights acquisition costs are initially capitalised in exploration and
evaluation assets. Subsoil use rights acquisition costs are reviewed at each
reporting date to confirm that there is no indication that the carrying amount
exceeds the recoverable amount. This review includes confirming that
exploration drilling is still under way or firmly planned, or that it has been
determined, or work is under way to determine that the discovery is
economically viable based on a range of technical and commercial
considerations and sufficient progress is being made on establishing
development plans and timing. If no future activity is planned or the subsoil use
rights have been relinquished or have expired, the carrying value of the subsoil
use rights acquisition costs is written off through profit or loss.
Acquisitions of interests in exploration and evaluation assets are accounted for
as asset acquisitions where the acquired set does not meet the definition of a
business. In making this assessment, management applies the concentration
test. Where substantially all of the fair value of the gross assets acquired is
concentrated in a single identifiable asset or group of similar assets, the
transaction is accounted for as an asset acquisition, and the purchase
consideration is allocated to the identifiable assets and liabilities acquired
based on their relative fair values.
Property, plant and equipment
Oil and gas properties
Expenditure on the construction, installation or completion of infrastructure
facilities such as treatment facilities, pipelines and the drilling of development
wells, is capitalised within property, plant and equipment as oil and gas
properties. The initial cost of an asset comprises of its purchase price or
construction cost, any costs directly attributable to bringing the asset into
operation and the initial estimate of decommissioning obligations, if any.
The purchase price or construction cost is the aggregate amount paid and the
fair value of any other consideration given to acquire the asset. When a
development project moves into the production stage, the capitalisation of
certain construction/development costs ceases, and costs are either regarded
as part of the cost of inventory or expensed, except for costs which qualify for
capitalisation relating to oil and gas property asset additions, improvements or
new developments.
Capitalised costs of oil and gas properties are depreciated using different
methods depending on the nature and use of the underlying assets.
Assets directly involved in the exploration and production activities of the
Group’s fields are depleted using the unit-of-production method based on
estimated proved developed reserves of the respective field.
Assets related to processing, transportation, and handling of hydrocarbons,
including those used for third-party volumes, are depreciated on a straight-line
basis over their useful lives or the term of the relevant subsoil use rights,
whichever is shorter.
Assets in development
Expenditure is transferred from “exploration and evaluation assets” to “assets
in development” which is a subcategory of “oil and gas properties” once the
work completed to date supports the future development of the asset and such
development receives appropriate approvals.
After transfer of the exploration and evaluation assets, all subsequent
expenditure on the construction, installation or completion of infrastructure
facilities such as pipelines and the drilling of development wells, including
unsuccessful development or delineation wells, is capitalised within “assets in
development”.
When a development project moves into the production stage, all assets
included in “assets in development” are then transferred to “producing assets”
which is also a sub-category of “oil and gas properties”. The capitalisation of
certain construction / development costs ceases, and costs are either regarded
as part of the cost of inventory or expensed, except for costs which qualify for
capitalisation relating to “oil and gas properties” asset additions, improvements
or new developments.
Notes to the consolidated financial statements (continued)
115 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
116
FINANCIAL REPORT
Significant accounting judgment: transfer of expenditures from exploration
and evaluation assets to assets in development
Management used judgment when considering the transfer of exploration and
evaluation assets associated with Stepnoy Leopard fields to assets in the
development category within oil & gas assets. When making conclusions on
such a transfer of assets, the management considered the following factors in
line with accounting policies and IFRS requirements:
• Technical Feasibility and Future Economic Benefits - this is based on the
Competent Person's Report of the Stepnoy Leopard Fields (the "SL CPR"), an
independent third-party evaluation of the reserves and resources as at 1
January 2024. The report was released in July 2024 and confirmed 138
mmboe of proved plus probable (2P) gross reserves and US$220 million of
after-tax net NPV10 at 34% IRR. The SL CPR provides evidence that the
exploration and appraisal activities have identified reserves that are
technically feasible and commercially viable for extraction, and it is probable
that future economic benefits associated with the asset will flow to the
entity.
• Intention to Develop and Availability of Funding - prior to the SL CPR, in
March 2024, the Group made a final investment decision (the "FID") for the
initial field development phase of the Stepnoy Leopard Fields. The FID
provides evidence for the approvals and intention to proceed with the
development of the identified reserves and there is a reasonable expectation
that the necessary funding to develop the reserves will be available.
Other properties
All other property, plant and equipment are stated at historical cost less
accumulated depreciation and impairment. Historical cost includes
expenditures that are directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a
separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the
item can be measured reliably. All other repairs and maintenance are charged
to the profit or loss during the year in which they are incurred.
Depreciation is calculated on a straight-line basis over the estimated useful lives
of the assets as follows:
Land is a non-depreciable asset and therefore is not subject to depreciation. It
is the company’s policy to maintain the original cost of land on the balance
sheet. However, the land’s value may be reviewed periodically to determine if
there is any impairment in value.
For more detailed information in relation to property plant and equipment,
please refer to Note 5.
Significant accounting judgment: oil and gas reserves
Oil and gas reserves are a material factor in the Group’s computation of
depreciation, depletion and amortisation (the “DD&A”). Management used
significant accounting judgement in selecting proved developed hydrocarbon
reserves for calculating the unit-of-production depletion rate, as it reflects the
expected pattern of consumption of future economic benefits by the Group.
Significant estimates and assumptions: oil and gas reserves
The Group uses internal estimates to assess the oil and gas reserves of its fields.
The reserves estimates are made in accordance with the methodology of the
Society of Petroleum Engineers (the “SPE”) and are confirmed or audited by
independent reserve engineers. All reserve estimates involve some degree of
uncertainty, which depends mainly on the amount of reliable geological and
engineering data available at the time of the estimate and the interpretation of
this data, as well as long-term hydrocarbon pricing, which may affect
classification of reserves.
The relative degree of uncertainty can be conveyed by placing reserves into one
of two principal classifications, either proved or unproved. Proved reserves are
more certain to be recovered than unproved reserves and may be further sub
classified as developed and undeveloped to denote progressively increasing
uncertainty in their recoverability.
Reserves estimates are reviewed and revised annually. Revisions occur due to
the evaluation or re-evaluation of already available geological, reservoir or
production data; availability of new data; or changes to underlying price
assumptions. Reserve estimates may also be revised due to improved recovery
projects, changes in production capacity or changes in development strategy.
Management’s estimates of the Chinarevskoye 2P (Proved plus Probable)
volume as at 31 December 2025 was 11.8 mmboe requiring 7 capital
interventions (2024: 18.0 mmboe requiring 13 interventions). The reduction
was principally driven by 2025 production of 2.6 mmboe and revision of the
proved and probable reserves estimates. The Probable Undeveloped reserves
have decreased by 2.5 mmboe mainly due to reduced expectations for Biyski
gas-condensate resulting from increased water ingress and cancelled
Ardatovski NE drilling activities (see pages 15-18 for more details).
Downward revision of the proved developed reserves estimates by 5% would
lead to additional DD&A expense of $1,289 thousand in 2025.
Estimates of economically recoverable oil and gas reserves and related future
net cash flows also impact the impairment assessment of the Group (see
Impairment related significant judgements, estimates and assumptions for
further details).
Details on carrying values of oil and gas properties and related depreciation,
depletion and amortization are shown in Note 5.
In addition, provisions for decommissioning may require revision — where
changes to reserves estimates affect expectations about when such activities
will occur and the associated cost of these activities (see Decommissioning
related significant judgements, estimates and assumptions for further details).
Impairment of property, plant and equipment, exploration and evaluation assets
At the end of each reporting period the Group assesses whether events or
changes in circumstances indicate that the carrying amount of an asset or CGU
may not be recoverable; for example, changes in the Group’s business plans,
significant decreases in the market commodity prices, low plant utilisation,
evidence of physical damage or, for oil and gas assets, significant downward
revisions of estimated reserves or increases in estimated future development
expenditure or decommissioning costs. If any such indication of impairment
exists, the Group makes an estimate of the asset’s recoverable amount.
Individual assets are grouped into a CGU for impairment assessment purposes at
the lowest level at which there are identifiable cash flows that are largely
independent of the cash flows of other groups of assets. A CGU’s recoverable
amount is the higher of its fair value less costs of disposal and its value in use.
Where the carrying amount of a CGU exceeds its recoverable amount, the CGU is
considered impaired, and an impairment loss is recognised for the excess of
carrying amount over recoverable amount.
The business internal cash flow model, which is approved on an annual basis by
senior management, is the primary source of information for the determination
of the recoverable amount. It contains forecasts for oil and gas production, sales
volumes for various types of products, revenues, costs and capital expenditure.
As an initial step in the preparation of this model, various assumptions are set by
senior management. These assumptions take account of commodity prices,
global supply-demand equilibrium for oil and natural gas, other macroeconomic
factors and historical trends and variability. In assessing the recoverable amount,
the estimated future cash flows are adjusted for the risks specific to the asset
group and are discounted to their present value using a discount rate.
FINANCIAL REPORT
| Years | |
| Buildings and constructions | 7-50 |
| Vehicles | 8 |
| Machinery and equipment | 3-13 |
| Other | 3-10 |
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements (continued)
117 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Significant accounting judgment: identification of cash-generating unit
Judgement is required to identify cash-generating units for the purpose of
testing the assets for impairment. Management has determined that a single
cash-generating unit within the Group’s non-current assets consists of all Group’s
assets related to its Chinarevskoye field and facilities. This is mainly based on the
fact that hydrocarbons extracted from the Chinarevskoye field are processed and
passed through a combination of various facilities.
Significant estimates and assumptions: impairment of property, plant and
equipment, exploration and evaluation assets
Determination as to whether, and by how much, the CGU is impaired involves
management’s best estimates on highly uncertain matters such as future
commodity prices, operating expenses and capital expenditures estimates,
discount rate, fiscal regimes, proved and probable reserves, contingent
resources and respective future production profiles.
Based on the management assessment the recoverable amount was determined
by the fair value less costs of disposal (FVLCD) of the CGU, which was higher than
its value-in-use. FVLCD was based on the discounted cash flow model as no
recent third-party transactions existed on which a reliable market-based fair
value could be established.
The discounted cash flow model takes into consideration cash flows, which are
expected to arise until 2031, i.e. during the licence term of the Chinarevskoye
field, and is considered a level 3 valuation under the fair value hierarchy, because
the valuation methods is represented by discounted cash flow model using mix
of observable and unobservable inputs. The period exceeding five years is
believed to be appropriate based on the proved and probable reserves audited
by independent engineers. The model also takes into account risked-value cash
flows from contingent resources on the basis a market participant would place
value on these resources.
The key assumptions used in the Group’s discounted cash flow model reflecting
past experience historic data and taking into account external factors are subject
to periodic review. These assumptions are:
• Oil prices (in real terms): US$70/bbl throughout 2026-2031 (2024: US$70/bbl
throughout 2025-2031);
• Proved and probable hydrocarbon reserves as well as production profiles
based on Group’s internal estimates prepared by management;
• All cash flows are projected in real terms on the basis of stable prices;
• Cost profiles for the development of the fields and subsequent operating
costs consistent with reserves estimates and production profiles; and
• Ural O&G processing – new terms under extended the processing agreement
until 2031
• Stepnoy Leopard fields – risk-weighted value consistent with the CPR
valuation;
• Gas treatment unit (GTU) spare capacity utilisation – risk-weighted option
value from processing fee structure consistent with Ural O&G processing
agreement;
• Post-tax discount rate of 10.53%, estimated to be equivalent to pre-tax
discount rate of 11.20% (2024: 10.53% and 15.1%, respectively).
The impairment testing carried out by the Group has resulted in the carrying
amount exceeding the recoverable amount of the Group’s property, plant and
equipment as at 31 December 2025.
This was principally driven by a revision of the Chinarevskoye field proved and
probable reserves estimates (as described in “Significant estimates and
assumptions: oil and gas reserves” section above). This change resulted in a
decrease in forecast production profiles and associated future cash flows,
leading to a reduction in the recoverable amount of the relevant cash-generating
unit. Consequently, the Group recognised impairment charge in the amount of
US$87,199 thousand for the year ended 31 December 2025.
The impairment charge as at 31 December 2025 has been allocated as follows:
As at 31 December 2024, the impairment testing carried out by the Group has
resulted in the recoverable amount exceeding the carrying amount of the
Group’s property, plant and equipment. This was primarily due to an
combination of additional value from the extension of Ural O&G processing
agreement and Stepnoy Leopard opportunity. Consequently, the Group
recognised a reversal of the previously recorded impairment in the amount of
US$86,668 thousand for the year ended 31 December 2024.
The impairment reversal as at 31 December 2024 has been allocated as follows:
More detailed information on carrying values of oil and gas properties and
related depreciation, depletion, amortisation and impairment are shown in
Note 5.
The following table summarizes sensitivity of the recoverable amount and
respective potential impairment charges that would result from changes in the
On the other hand, certain positive development like increase in utilisation of the
Group’s processing facilities, could have the effect of reversing the impairment.
Any reversal would be limited so that the carrying amount of the CGU does not
exceed the lower of its recoverable amount, or the carrying amount that would
have been determined, net of depreciation, had no impairment charge been
recognised for the CGU in prior years.
Leases
The Group applies a single recognition and measurement approach for all
leases, except for short-term leases and leases of low-value assets. The Group
recognises lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the
lease (i.e., the date the underlying asset is available for use). Right-of-use assets
are measured at cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. Unless the Group is
reasonably certain to obtain ownership of the leased asset at the end of the
lease term, the recognised right-of-use assets are depreciated on a straight-line
basis over the shorter of its estimated useful life and the lease term. Right-of-
use assets are subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities
measured at the present value of lease payments to be made over the lease
term. The lease payments include fixed payments (including in substance fixed
payments) less any lease incentives receivable, variable lease payments that
depend on an index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise price of a
purchase option reasonably certain to be exercised by the Group and payments
of penalties for terminating a lease, if the lease term reflects the Group
exercising the option to terminate.
Variable lease payments that do not depend on an index or a rate are
recognised as expense in the period on which the event or condition that
triggers the payment occurs.
Notes to the consolidated financial statements (continued)
117 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
| In thousands of US Dollars | 31 December 2025 |
| Working oil and gas assets | (62,874) |
| Construction in progress | (21,602) |
| Other property, plant and equipment | (2,723) |
| Total impairment charge | (87,199) |
| In thousands of US Dollars | 31 December 2024 |
| Working oil and gas assets | 62,628 |
| Construction in progress | 21,740 |
| Other property, plant and equipment | 2,300 |
| Total impairment reversal | 86,668 |
| key assumptions in 2025: Key assumption | Change | Sensitivity (In thousands of US Dollars) |
| Oil price decrease by | $10/bbl | 29,284 |
| Reserves downgrade by | 10.0% | 16,606 |
| Post-tax discount rate increase by | 4.0% | 45,598 |
| Operating costs increase by | 10.0% | 34,086 |
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
118
FINANCIAL REPORT
In calculating the present value of lease payments, the Group uses the
incremental borrowing rate at the lease commencement date if the interest
rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change in
the lease term, a change in the in-substance fixed lease payments or a change
in the assessment to purchase the underlying asset.
Separation of lease and non-lease components
When contracts for a lease (such as like lease of drilling rigs and rail-tank cars)
include various additional services like personnel cost, maintenance, drilling
related activities, and other items, the Group splits such non-lease components
and recognises them separately. Where the additional services are not
separately priced, the consideration paid is allocated based on the relative
stand-alone prices of the lease and non-lease components.
Distinguishing fixed and variable lease payment elements
Certain lease contracts include fixed rates for when the asset is in operation,
and various alternative rates (like “cold-stack rates” for leases of drilling rigs) for
periods where the asset is engaged in specified activities or idle, but still under
contract. In general, variability in lease payments under these contracts has its
basis in different use and activity levels, and the variable elements have been
determined to relate to non-lease components only. Consequently, the lease
components of these contractual payments are considered fixed for the
purposes of IFRS 16.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term
leases of machinery and equipment (i.e., those leases that have a lease term of
12 months or less from the commencement date and do not contain a
purchase option). It also applies the lease of low-value assets recognition
exemption to leases of office equipment that are considered of low value (i.e.,
below US$ 5,000). Lease payments on short-term leases and leases of low-
value assets are recognised as expense on a straight-line basis over the lease
term.
Business combinations and goodwill
Business combinations are accounted for using the acquisition method. The
cost of an acquisition is measured as the aggregate of the consideration
transferred, measured at acquisition date fair value and the amount of any
non-controlling interest (“NCI”) in the acquiree. For each business combination,
the Group elects whether to measure NCI in the acquiree at fair value or at the
proportionate share of the acquiree’s identifiable net assets. Acquisition related
costs are expensed as incurred and included in administrative expenses.
When the Group acquires a business, it assesses the assets and liabilities
assumed for appropriate classification and designation in accordance with the
contractual terms, economic circumstances and pertinent conditions as at the
acquisition date. This includes the separation of embedded derivatives in host
contracts by the acquiree. Those acquired petroleum reserves and resources
that can be reliably measured are recognised separately in the assessment of
fair values on acquisition. Other potential reserves, resources and rights are
included in goodwill.
Goodwill is initially measured at cost, being the excess of the aggregate of the
consideration transferred and the amount recognised for NCI over the fair
value of the identifiable net assets acquired and liabilities assumed. If the fair
value of the identifiable net assets acquired is in excess of the aggregate
consideration transferred (bargain purchase), before recognising a gain, the
Group reassesses whether it has correctly identified all of the assets acquired
and all of the liabilities assumed and reviews the procedures used to measure
the amounts to be recognised at the acquisition date. If the reassessment still
results in an excess of the fair value of net assets acquired over the aggregate
consideration transferred, then the gain is recognised in the statement of profit
or loss and other comprehensive income. After initial recognition, goodwill is
measured at cost less any accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Group’s CGUs that are expected to
benefit from the combination, irrespective of whether other assets or liabilities
of the acquiree are assigned to those units.
Where goodwill forms part of a Cash Generating Unit (“CGU”) and part of the
operation in that unit is disposed of, the goodwill associated with the disposed
operation is included in the carrying amount of the operation when
determining the gain or loss on disposal. Goodwill disposed of in these
circumstances is measured based on the relative values of the disposed
operation and the portion of the CGU retained.
Taxation
Uncertainties exist with respect to the interpretation of complex tax
regulations, changes in tax laws, and the amount and timing of future taxable
income. Given the wide range of international business relationships and the
long-term nature and complexity of existing contractual agreements,
differences arising between the actual results and the assumptions made, or
future changes to such assumptions, could necessitate future adjustments to
tax bases of income and expense already recorded. The Group establishes
provisions, based on reasonable estimates, for possible consequences of audits
by the tax authorities of the respective counties in which it operates. The
amount of such provisions is based on various factors, such as experience of
previous tax audits and differing interpretations of tax regulations by the Group
and the responsible tax authority. Such differences in interpretation may arise
for a wide variety of issues depending on the conditions prevailing in the
respective domicile of the Group companies.
Current income tax
Current income tax assets and liabilities are measured at the amount expected
to be recovered from or paid to the taxation authorities. The tax rates and tax
laws used to compute the amount are those that are enacted or substantively
enacted at the reporting date in the countries where the Group operates and
generates taxable income. The tax rates and tax laws used to compute the
amount are those that apply to the relevant taxable income.
Current income tax relating to items recognised directly in equity is recognised
in equity and not in the statement of profit or loss. Management periodically
evaluates positions taken in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.
Deferred income tax
Deferred tax assets and liabilities are calculated in respect of temporary
differences using the liability method. Deferred income taxes are provided for
all temporary differences arising between the tax bases of assets and liabilities
and their carrying values for financial reporting purposes, except where the
deferred income tax arises from the initial recognition of goodwill or of an asset
or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss.
A deferred tax asset is recorded only to the extent that it is probable that
taxable profit will be available against which the deductible temporary
differences can be utilised. Deferred tax assets and liabilities are measured at
tax rates that are expected to apply to the period when the asset is realised or
the liability is settled, based on tax rates that have been enacted or
substantively enacted at the reporting date.
Deferred income tax is provided on temporary differences arising on
investments in subsidiaries, except where the timing of the reversal of the
temporary difference can be controlled and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable
right exists to set off current tax assets against current tax liabilities and the
deferred taxes relate to the same taxable entity and the same taxation
authority.
For more detailed information in current and deferred income tax disclosure as
at 31 December 2025 and 2024, please see Notes 27 and 30.
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements (continued)
119 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Significant accounting judgment: taxation
Kazakhstan’s tax legislation and regulations are subject to ongoing changes and
varying interpretations. Instances of inconsistent opinions between local,
regional and national tax authorities are not unusual. Because of the
uncertainties associated with Kazakhstan’s tax system, the ultimate amount of
taxes, penalties and interest, if any, may be in excess of the amount expensed
to date and accrued at 31 December 2025.
The Group is regularly subject to tax audits and engages in ongoing discussions
with tax authorities to agree on tax computations. Whilst the ultimate outcome
of such tax audits and discussions cannot be determined with certainty, and
hence requires management judgement, the level of provisions are estimated
by management as required for taxes for which it is considered probable will be
payable, based on professional advice and consideration of the nature of
current discussions with the tax authority.
As at 31 December 2025 management believes that its interpretation of the
relevant legislation is appropriate and that it is probable that the Group’s tax
position will be sustained. To the extent that actual outcomes differ from
management’s estimates, income tax charges or credits, and changes in current
and deferred tax assets or liabilities, may arise in future periods. For more
information, see Notes 27 and 30.
Foreign currency translation
The functional currency is the currency of the primary economic environment
in which an entity operates and is normally the currency in which the entity
primarily generates and expends cash.
The functional currency of the Company is the United States dollar (the “US
dollar” or “US$”). The functional currencies of the Group’s subsidiaries are as
follows:
Monetary assets and liabilities denominated in foreign currencies are
translated at the functional currency spot rates of exchange at the reporting
date. All differences are taken to the profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rates as at the dates of the initial
transactions. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value is
determined.
In the consolidated financial statements, the assets and liabilities of non-US
dollar functional currency subsidiaries are translated into US dollars at the spot
exchange rate on the balance sheet date. The results and cash flows of non-US
dollar functional currency subsidiaries are translated into US dollars using
average rates of exchange, and resulting exchange differences are accumulated
foreign currency translation reserve within equity, and are reclassified to the
profit or loss on the disposal of the subsidiary. In the consolidated financial
statements, exchange adjustments arising when the opening net assets and the
profits for the year retained by non-US dollar functional currency subsidiaries
are translated into US dollars are reported in the other comprehensive income.
Borrowing costs
The Group capitalises borrowing costs on qualifying assets. Assets qualifying for
borrowing costs capitalisation include all assets under construction that are not
being depreciated, depleted, or amortised, provided that work is in progress at
that time. Qualifying assets mostly include wells and other operations field
infrastructure under construction. Capitalised borrowing costs are calculated by
applying the capitalisation rate to the expenditures on qualifying assets. The
capitalisation rate is the weighted average of the borrowing costs applicable to
the Group’s borrowings that are outstanding during the period. All other
borrowing costs are recognised in the profit or loss in the period in which they
are incurred.
For more detailed information in relation to capitalisation of borrowing costs,
please refer to Note 5.
Advances for non-current assets
Advances paid for capital investments/acquisition of non-current assets are
qualified as advances for non-current assets regardless of the period of supplies
of relevant assets or the supply of work or services to close advances. Advances
paid for the purchase of non-current assets are recognised by the Group as
non-current assets and are not discounted.
For more detailed information in relation to advances for non-current assets,
please refer to Note 6.
Inventories
Inventories are stated at the lower of cost or net realisable value (“NRV”). Cost
of oil, gas condensate and liquefied petroleum gas (“LPG”) is determined on the
weighted-average method based on the production cost including the relevant
expenses on depreciation, depletion and impairment and overhead costs based
on production volume. Net realisable value is the estimated selling price in the
ordinary course of business, less selling expenses.
The Company assesses inventories at each reporting date for indicators of
obsolescence, slow movement or damage. Where such indicators exist, the
carrying amount of inventory is written down to its net realisable value, being
the estimated selling price in the ordinary course of business less the estimated
costs of completion and costs necessary to make the sale. Write-downs are
recognised in profit or loss in the period in which they arise. Where the
circumstances that previously caused inventories to be written down no longer
exist, the write-down is reversed, with the reversal recognised in profit or loss.
For more information in relation to the breakdown of inventories as at
31 December 2025 and 2024, please see Note 7.
Other current liabilities
The Group makes accruals for liabilities related to the underperformance
and/or adjustments of work programs under subsoil use agreements (SUA) on
a regular basis. When evaluating the adequacy of an accrual, management
bases its estimates on the latest work program included in the SUA, and
relevant signed supplements and potential future changes in payment terms
(including the currency in which these liabilities are to be settled).
Future changes in the work programs may require adjustments to the accrual
recorded in the consolidated financial statements.
Notes to the consolidated financial statements (continued)
119 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
| Company Functional currency |
| Nostrum Associated Investments LLP Tenge |
| Nostrum Oil & Gas Coöperatief U.A. US dollar |
| Nostrum Oil & Gas BV US dollar |
| Nostrum Oil & Gas Finance BV US dollar |
| Nostrum Oil & Gas Holding Ltd US dollar |
| Nostrum Services Central Asia LLP Tenge |
| Midstream Energy Company LLP Tenge |
| Nostrum Services N.V. Euro |
| Zhaikmunai LLPUS dollar |
| Positiv Invest LLPTenge |
| Transactions in foreign currencies are initially recorded by the Group’s subsidiaries at their respective functional currency spot rates at the date the transaction first qualifies for recognition. |
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
120
FINANCIAL REPORT
Provisions and contingencies
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation
and a reliable estimate of the amount of the obligation can be made. Provisions
are reviewed by the Group at each reporting date and adjusted to reflect the
current best estimate. If it is no longer probable that an outflow of resources
embodying economic benefits will be required to settle the obligation, the
provision is reversed.
The Group classifies as contingent liabilities those possible obligations that arise
from past events and whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the
control of the enterprise and the present obligations that arise from past events
but are not recognised because it is not probable that an outflow of resources
embodying economic benefits will be required to settle the obligation or the
amount of the obligation cannot be measured with sufficient reliability.
The Group does not recognise contingent liabilities but discloses contingent
liabilities in Note 30, unless the possibility of an outflow of resources embodying
economic benefits is remote.
Significant accounting judgment: provisions and contingencies
Provisions and liabilities are recognized in the period when it becomes probable
that there will be a future outflow of funds resulting from past operations or
events and the amount of cash outflow can be reliably estimated. The timing of
recognition and quantification of the liability require the application of
judgment to existing facts and circumstances, which can be subject to change.
The carrying amounts of provisions and liabilities are reviewed regularly and
adjusted to take account of changing facts and circumstances.
Significant management judgment is required to evaluate any claims and
actions to determine whether a provision relating to a specific litigation should
be recognized or revised, or a contingent liability is required to be disclosed,
since the outcome of litigation is difficult to predict.
No provision has been made in respect of the outstanding claims involving the
Group, as the likelihood of a material outflow of economic benefits in respect of
those claims is considered to be possible but not probable and therefore only
disclosure is required.
For disclosure on provisions and contingencies, please refer to Note 30.
Decommissioning
Provision for decommissioning is recognised in full when the Group has a
present obligation to dismantle and remove a facility or an item of plant and to
restore the site on which it is located, or to settle such obligation through
transfer of the accumulated liquidation fund in accordance with the subsoil use
agreement, and when a reasonable estimate of that provision can be made.
Provision for decommissioning is recognised in full when the Group has a
present obligation to dismantle and remove a facility or an item of plant and to
restore the site on which it is located, or to settle such obligation through
transfer of the accumulated liquidation fund to the state authorities, depending
on the applicable decisions of the authorities at the end of the licence period.
The Group estimates future dismantlement and site restoration costs for oil
and gas properties with reference to the estimates provided from either
internal or external engineers after taking into consideration the anticipated
method of dismantlement and the extent of site restoration required in
accordance with current legislation and industry practice. The amount of the
provision is the present value of the estimated expenditures expected to be
required to settle the obligation at current year prices discounted at pre-tax
rate that reflects current market assessment of the time value of money and
the risks specific to liability.
The unwinding of the discount related to the obligation is recorded in finance
costs. A corresponding amount equivalent to the provision is also recognised as
part of the cost of the related oil and gas properties. This asset is subsequently
depreciated as part of the capital costs of the oil and gas properties on a unit-
of-production basis.
The Group reviews site restoration provisions at each financial reporting date
and adjusts them to reflect current best estimates in accordance with IFRIC 1
Changes in Existing Decommissioning, Restoration and Similar Liabilities.
Changes in the measurement of an existing decommissioning liability that
result from changes in the estimated timing or amount of the outflow of
resources embodying economic benefits required to settle the obligation, or
changes to the discount rate:
• are added to, or deducted from, the cost of the related asset in the current
period. If deducted from the cost of the asset the amount deducted shall not
exceed its carrying amount. If a decrease in the provision exceeds the
carrying amount of the asset, the excess is recognised immediately in the
profit or loss; and
• if the adjustment results in an addition to the cost of an asset, the Group
considers whether this is an indication that the new carrying amount of the
asset may not be fully recoverable. If it is such an indication, the Group tests
the asset for impairment by estimating its recoverable amount, and
accounts for any impairment loss in accordance with IAS 36.
Movements in the abandonment and site restoration provision are disclosed in
Note 14.
Significant estimates and assumptions: provisions and contingencies
The Group holds provisions for the future decommissioning of oil and gas
properties and site restoration. The estimation of the future dismantlement
and site restoration costs involves use of significant estimates and assumptions
by management, specifically for determining the timing of the future cash
outflows and discount rate.
Management made its estimates based on the assumption that cash flow will
take place at the expected end of the subsoil use rights. Therefore, most
decommissioning events are many years in the future and the precise date of
wells abandonment and site restoration may change with the relative impact
on the cash outflows.
At the reporting date, the decommissioning provision primarily reflects the
estimated costs associated with well abandonment activities and restoration of
the areas surrounding the wells. In determining the scope of the provision, the
Group considers the nature, condition and expected future use of its assets. No
provision is recognised in respect of dismantlement of certain surface facilities,
as management’s current assessment is that such facilities are expected to
retain value and are not expected to require dismantlement by the end of the
current subsoil use rights. This assessment may be affected by future
development plans, including any extension of the PSA term, and by changes in
applicable legal or regulatory requirements.
Management of the Group believes that the long-term US Treasury real yield
curve rates adjusted for country risk premium of Kazakhstan provides the best
estimates of applicable real discount rate.
The estimated costs of well abandonment and site restoration are determined
based on technical assessments prepared by the Group’s internal engineers,
with reference to existing contractual rates and recent market benchmarks for
similar services. These estimates include expected costs for activities such as
plugging and abandonment of wells, removal of downhole equipment, site
clearance and restoration of the surrounding areas.
Any changes in the expected future costs are reflected in both the provision
and the asset. Moreover, actual decommissioning costs can differ from
estimates because of constantly changing decommissioning technologies as
well as changes in environmental laws and regulations and public expectations.
As a result, there could be significant adjustments to the provisions established
which would affect future financial results. For example, 10% increase in the
cost of decommissioning may lead to additional US$2,504 thousand liability.
For more details on abandonment and site restoration provision please refer to
Note 14.
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements (continued)
121 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured
at amortised cost and fair value through profit or loss. The Group determines
the classification of its financial assets at initial recognition.
The classification of financial assets at initial recognition depends on the
financial asset’s contractual cash flow characteristics and the Group’s business
model for managing them. With the exception of trade receivables that do not
contain a significant financing component or for which the Group has applied
the practical expedient, the Group initially measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value through profit or loss,
transaction costs. Trade receivables that do not contain a significant financing
component or for which the Group has applied the practical expedient are
measured at the transaction price determined under IFRS 15.
In order for a financial asset to be classified and measured at amortised cost or
fair value through OCI, it needs to give rise to cash flows that are ‘solely
payments of principal and interest (SPPI)’ on the principal amount outstanding.
This assessment is referred to as the SPPI test and is performed at an
instrument level.
The Group’s business model for managing financial assets refers to how it
manages its financial assets in order to generate cash flows. The business
model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a
time frame established by regulation or convention in the market place (regular
way trades) are recognised on the trade date, i.e., the date that the Group
commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four
categories:
• Financial assets at amortised cost (debt instruments);
• Financial assets at fair value through OCI with recycling of cumulative gains
and losses (debt instruments);
• Financial assets designated at fair value through OCI with no recycling of
cumulative gains and losses upon derecognition;
• Financial assets at fair value through profit or loss.
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Group. The Group measures financial
assets at amortised cost if both of the following conditions are met:
• The financial asset is held within a business model with the objective to hold
financial assets in order to collect contractual cash flows, and
• The contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal
amount outstanding.
Financial assets at amortised cost are subsequently measured using the
effective interest (EIR) method and are subject to impairment. Gains and losses
are recognised in profit or loss when the asset is derecognised, modified or
impaired.
The Group’s financial assets at amortised cost include cash, long-term and
short-term deposits, trade and other receivables.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a
group of similar financial assets) is primarily derecognised (i.e., removed from
the Group’s consolidated statement of financial position) when:
• The rights to receive cash flows from the asset have expired; or
• The Group has transferred its rights to receive cash flows from the asset or
has assumed an obligation to pay the received cash flows in full without
material delay to a third party under a ‘pass-through’ arrangement; and
either (a) the Group has transferred substantially all the risks and rewards of
the asset, or (b) the Group has neither transferred nor retained substantially
all the risks and rewards of the asset, but has transferred control of the
asset.
When the Group has transferred its rights to receive cash flows from an asset
or has entered into a pass-through arrangement, it evaluates if, and to what
extent, it has retained the risks and rewards of ownership. When it has neither
transferred nor retained substantially all of the risks and rewards of the asset,
nor transferred control of the asset, the Group continues to recognise the
transferred asset to the extent of its continuing involvement. In that case, the
Group also recognises an associated liability. The transferred asset and the
associated liability are measured on a basis that reflects the rights and
obligations that the Group has retained.
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt
instruments not held at fair value through profit or loss. ECLs are based on the
difference between the contractual cash flows due in accordance with the
contract and all the cash flows that the Group expects to receive, discounted at
an approximation of the original effective interest rate. The expected cash
flows will include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
Significant estimates and assumptions: recoverability of receivables
Significant judgement is required when determining the recoverability of
Group’s receivables.
The Group defines default periods based on a period of 90 days to 12 months
past due, dependent on the counterparty and the commercial terms
negotiated in relation to individual transactions. Where a significant increase in
credit risk occurs since recognition, the financial asset is deemed to be in stage
2. In these circumstances, the Group recognises a lifetime expected credit loss,
with any interest income continuing to be recognised on a gross basis. Stage 3
is where the financial asset is credit impaired. For financial assets in stage 3, the
Group continues to recognise a lifetime expected credit loss, but any interest
income is recognised on a net basis. This means that interest income will be
calculated based on the gross carrying amount of the financial asset less ECL.
Financial liabilities
Initial recognition, measurement and derecognition
Financial liabilities are classified, at initial recognition, as financial liabilities at
fair value through profit or loss, long-term borrowings, payables, or as
derivatives designated as hedging instruments in an effective hedge, as
appropriate.
All financial liabilities are recognised initially at fair value and, in the case of
long-term borrowings and payables, net of directly attributable transaction
costs.
The Group’s financial liabilities include trade and other payables, long-term
borrowings, and derivative financial instruments.
Subsequent measurement
For purposes of subsequent measurement, financial liabilities are classified in
two categories:
• Financial liabilities at fair value through profit or loss
• Financial liabilities at amortised cost (loans and borrowings)
Financial liabilities at amortised cost (loans and borrowings)
This is the category most relevant to the Group. After initial recognition,
interest-bearing borrowings are subsequently measured at amortised cost
using the EIR method. Gains and losses are recognised in profit or loss when the
liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in the statement of profit or loss.
This category generally applies to interest-bearing borrowings. For more
information, refer to Note 13.
Notes to the consolidated financial statements (continued)
121 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
122
FINANCIAL REPORT
Derecognition
A financial liability is derecognised when the obligation under the liability is
discharged or cancelled or expires. When an existing financial liability is
replaced by another from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the
recognition of a new liability. The difference in the respective carrying amounts
is recognised in the statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount reported
in the statement of financial position if, and only if, there is a currently
enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, or to realise the assets and settle the liabilities
simultaneously.
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash
at banks and at hand and short-term deposits with an original maturity of three
months or less at inception.
Restricted cash and cash equivalent balances are those which meet the
definition of cash and cash equivalents but are not available for use by the
Group and therefore is not considered highly liquid – for example, cash set
aside to cover decommissioning obligations or as required by the forbearance
agreement.
Money Market Funds (MMFs) are included within cash and cash equivalents if
they are short-term in nature, highly liquid, and readily convertible to known
amounts of cash, and subject to an insignificant risk of changes in value.
For the purpose of the consolidated statement of cash flows, cash and cash
equivalents consist of cash and cash equivalents, as defined above, net of
outstanding bank overdrafts.
For more detailed information in relation to cash and cash equivalents as at 31
December 2025 and 2024, please see Note 10.
Significant estimates and assumptions: classification of MMFs
The classification of MMFs as cash equivalents involves significant judgement.
These instruments legally represent equity instruments and do not have
contractual maturity dates.
Management applies judgement in classifying these investments as cash and
cash equivalents, as they meet the “in-substance” criteria, considering their
high liquidity, short-term nature and insignificant risk of changes in value.
Revenue recognition
The Group recognises revenue in accordance with IFRS 15 using the five-step
model, reflecting the below:
1) Identify the contract. A contract exists when there is an agreement with a
customer that creates enforceable rights and obligations, has commercial
substance, and collection of consideration is probable. Contracts arise from
the sale of crude oil, gas, condensate and LPG, and may include long-term
off-take agreements or shorter-term sales.
2) Identify performance obligations. For hydrocarbon sales, the performance
obligation is the delivery of crude oil, gas, condensate or LPG to the
customer, typically representing a single performance obligation. However,
in some cases multiple performance obligations exist (if transportation
services are included to the contract). For third-party gas processing (tolling)
arrangements, the performance obligation is to provide processing services.
These services are generally distinct, as customers benefit from the
processing independently of other goods or services.
3) Determine the transaction price. For crude oil, condensate and LPG, the
transaction price is based on observable market indices (e.g. Platts and/or
Argus), adjusted for quality and transportation differentials, representing
variable consideration that is resolved at or near the point of delivery. Gas
sales are typically based on contractual Brent-based prices. For gas
processing and tolling arrangements, the transaction price comprises
processing fees per unit of throughput volumes.
4) Allocate the transaction price. Where contracts contain a single
performance obligation, the transaction price is fully allocated to that
obligation. Where multiple performance obligations exist (e.g. bundled
processing and transportation services), the transaction price is allocated
based on relative standalone selling prices. Any discounts and variable
consideration are allocated to one or more performance obligations where
they relate specifically to those obligations; otherwise, they are allocated on
a relative standalone selling price basis.
5) Recognise revenue. Revenue from the sale of hydrocarbons is recognised at
a point in time when control passes to the customer, typically upon delivery
into a pipeline, vessel, railcar or truck in accordance with contractual terms.
Revenue from gas processing services is recognised as the services are
rendered, reflecting the transfer of control to the customer. This is generally
over time, as customers simultaneously receive and consume the benefits of
processing. The Group applies an output method, based on processed
volumes measured through metering systems, which directly reflects the
performance completed to date. In these arrangements where the Group
does not control the underlying hydrocarbons, the Group acts as an agent
and recognises revenue only in the amount of the processing fee to which it
is entitled. The Group’s LPG sales are mostly on advance payment basis,
while payment terms for gas, oil and condensate are normally 15-45 days
after delivery.
The Group assesses whether it acts as principal or agent in each arrangement
and concludes that it acts as principal in hydrocarbon sales and as agent in
certain processing arrangements where it does not control the underlying
commodities.
Treasury shares
Own equity instruments that are reacquired (treasury shares) are recognised at
cost and deducted from equity. No gain or loss is recognised in profit or loss on
the purchase, sale, issue or cancellation of the Group’s own equity instruments.
Any difference between the carrying amount and the consideration, if reissued,
is recognised in the share premium. Voting rights related to treasury shares are
nullified for the Group and no distributions are accepted in relation to them.
Share options exercised during the reporting period can be satisfied with
treasury shares.
Share-based payments
The cost of equity-settled transactions is measured at fair value at the grant
date. This fair value is expensed over the period until vesting with the
recognition of a corresponding equity element, which is not remeasured
subsequently until the settlement date.
Estimating fair value for share-based payment transactions requires
determination of the most appropriate valuation model, which is dependent on
the terms and conditions of the grant. This estimate also requires
determination of the most appropriate inputs to the valuation model including
the expected life of the share option, volatility and distribution yield and
making assumptions about them.
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements (continued)
123 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
5. Property, plant and equipment
As at 31 December 2025 and 31 December 2024 property, plant and
Oil and gas properties
The category “Oil and gas properties” represents wells, oil and gas
treatment facilities, oil transportation and other related assets. The
movement of oil and gas properties for the years ended 31 December
* Balances, net of accumulated depreciation, depletion and impairment
** Accumulated depreciation, depletion and impairment
The category “Construction in progress” is represented by employee
remuneration, materials and fuel used, rig costs, payments made to
contractors, and asset retirement obligation fees directly associated
with development of wells until the drilling of the well is complete and
results have been evaluated. The category “Assets in development”
represents exploration and evaluation assets associated with Stepnoy
Leopard fields (see Note 3).
The depletion rate for oil and gas working assets was 21.16% and
22.79% in 2025 and 2024, respectively. In 2025, the Group applied
consistent approach in the estimation of oil & gas reserves adopting
the same methodology with previous periods, however, the Group
decided not to engage independent reserve auditors taking into
account immaterial changes in the reserves estimates, which were in
line with expectations (see pages 15-18 of the Annual Report).
The change in the discount rate used to determine the abandonment
and site restoration provision (Note 14) in the year ended 31
December 2025 resulted in the decrease of the oil and gas properties
by US$1,128 thousand (31 December 2024: an increase of US$4,191
thousand).
The Group incurred borrowing costs including amortisation of
arrangement fees. Capitalisation rate and capitalised borrowing costs
were as follows as at 31 December 2025 and 31 December 2024:
* Balances, net of accumulated depreciation, amortisation and impairment
** Accumulated depreciation, amortisation and impairment
Notes to the consolidated financial statements (continued)
123 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
| equipment comprised the following: In thousands of US Dollars | 31 December 2025 | 31 December 2024 |
| Oil and gas properties | 267,473 | 363,002 |
| Other property, plant and equipment | 7,481 | 9,881 |
| 274,954 | 372,883 |
| 2025 and 2024 was as follows: In thousands of US Dollars Working assets | Constructi on in progress | Assets in develop ment | Total | |
| Balance at 1 January 2024,net* 191,239 | 54,107 | – | 245,346 | |
| Additions | 4,296 | 27,644 | 2,485 | 34,425 |
| Transfers from exploration and evaluation assets | – | – | 26,155 | 26,155 |
| Transfers | 18,893 | (18,367) | – | 526 |
| Disposals | (3,039) | (918) | – | (3,957) |
| Disposals depreciation | 2,647 | – | – | 2,647 |
| Depreciation and depletion charge | (25,045) | – | – | (25,045) |
| Impairment reversal | 62,628 | 21,740 | – | 84,368 |
| Impairment transfer | (2,303) | 2,303 | – | – |
| Translation difference | – | – | (1,463) | (1,463) |
| Balance at 31 December 2024, net* | 249,316 | 86,509 | 27,177 | 363,002 |
| Additions | 29 | 17,601 | 4,850 | 22,480 |
| Change in estimate ARO | (1,128) | – | – | (1,128) |
| Transfers | 20,960 | (21,151) | – | (191) |
| Disposals | (350) | (365) | – | (715) |
| Disposals depreciation | 10 | 322 | – | 332 |
| Depreciation and depletion charge | (32,448) | – | – | (32,448) |
| Impairment charge | (62,874) | (21,602) | – | (84,476) |
| Impairment transfer | (766) | 766 | – | – |
| Translation difference | – | – | 617 | 617 |
| Balance at 31 December 2025, net * | 172,749 | 62,080 | 32,644 | 267,473 |
| As at 31 December 2023 | ||||
| Cost | 2,984,421 | 97,886 | – | 3,082,307 |
| Accumulated depreciation ** | (2,793,182) | (43,779) | – | (2,836,961) |
| Balance * | 191,239 | 54,107 | – | 245,346 |
| As at 31 December 2024 | ||||
| Cost | 3,004,571 | 106,245 | 27,177 | 3,137,993 |
| Accumulated depreciation | (2,755,255) | (19,736) | – | (2,774,991) |
| Balance | 249,316 | 86,509 | 27,177 | 363,002 |
| As at 31 December 2025 | ||||
| Cost | 3,024,082 | 102,330 | 32,644 | 3,159,056 |
| Accumulated depreciation ** | (2,851,333) | (40,250) | – | (2,891,583) |
| Balance * | 172,749 | 62,080 | 32,644 | 267,473 |
| In thousands of US Dollars | 31 December 2025 | 31 December 2024 |
| Borrowing costs including amortisation of arrangement fee | 147,058 | 116,111 |
| Capitalisation rate | 5.78% | 5.78% |
| Capitalised borrowing costs | 2,921 | 1,720 |
| Other property, plant and equipment In thousands of US Dollars | Buildings | Machi- nery & equip- ment | Vehicles | Others | Total |
| Balance at 1 January 2024 | 1,711 | 2,470 | 30 | 3,064 | 7,275 |
| Additions | – | 562 | 22 | 510 | 1,094 |
| Transfers | 48 | 157 | – | (731) | (526) |
| Disposals | (1) | (98) | – | (139) | (238) |
| Disposals depreciation | – | 94 | – | 97 | 191 |
| Depreciation | (215) | (149) | (12) | (262) | (638) |
| Impairment reversal | 541 | 781 | 9 | 969 | 2,300 |
| Transfers from exploration and evaluation assets | – | – | – | 423 | 423 |
| Impairment transfer | (23) | – | – | 23 | – |
| Balance at 31 | 2,061 | 3,817 | 49 | 3,954 | 9,881 |
| December 2024 | |||||
| Additions | 16 | 213 | 16 | 1,002 | 1,247 |
| Transfers | 223 | 198 | (22) | (208) | 191 |
| Disposals | (439) | (163) | – | (355) | (957) |
| Disposals depreciation | 414 | 141 | – | 324 | 879 |
| Depreciation | (355) | (220) | (2) | (460) | (1,037) |
| Impairment charge | – | – | – | (2,723) | (2,723) |
| Impairment transfer | 1,049 | (708) | 18 | (359) | – |
| Balance at 31 | 2,969 | 3,278 | 59 | 1,175 | 7,481 |
| December 2025 | |||||
| As at 31 December 2023 | |||||
| Cost | 49,493 | 21,896 | 1,505 | 18,864 | 91,758 |
| Accumulated depreciation** | (47,782) | (19,426) | (1,475) | (15,800) | (84,483) |
| Balance* | 1,711 | 2,470 | 30 | 3,064 | 7,275 |
| As at 31 December 2024 | |||||
| Cost | 49,540 | 22,517 | 1,527 | 18,927 | 92,511 |
| Accumulated depreciation** | (47,479) | (18,700) | (1,478) | (14,973) | (82,630) |
| Balance* | 2,061 | 3,817 | 49 | 3,954 | 9,881 |
| As at 31 December 2025 | |||||
| Cost | 49,340 | 22,765 | 1,521 | 19,366 | 92,992 |
| Accumulated depreciation** | (46,371) | (19,487) | (1,462) | (18,191) | (85,511) |
| Balance* | 2,969 | 3,278 | 59 | 1,175 | 7,481 |
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
124
FINANCIAL REPORT
6.
Non-current advances and other assets
As at 31 December 2025 and 2024 non-current advances and other
assets comprised the following:
7.
Inventories
As at 31 December 2025 and 2024 inventories comprised the
following:
As at 31 December 2025 and 31 December 2024 inventories are
carried at cost.
8. Other current assets
As at 31 December 2025 and 2024 other current assets comprised the
Prior year comparative were updated to align with сurrent year
presentation.
Advances paid consist primarily of prepayments made to service
providers. As at 31 December 2025 the impaired VAT receivable
amounted to US$578 thousand (31 December 2024: the impaired
VAT receivable: US$555).
There were no other movements in the provision for impairment of
advances paid during the years ended 31 December 2025 and 2024.
9. Trade receivables
As at 31 December 2025 and 31 December 2024 trade receivables
were not interest-bearing and were mainly denominated in US dollars
and Tenge. Their average collection period is not more than 45 days.
As at 31 December 2025 there were no past due but not impaired
trade receivables (31 December 2024: there were past due but not
impaired trade receivables). Based on the assessments made, the
Group concluded that no provision for expected credit losses should
be recognized as at 31 December 2025 and 31 December 2024.
10. Cash and cash equivalents
As at 31 December 2025 and 31 December 2024 cash and cash
equivalents comprised the following:
Money Market Funds included investments in money market funds of
JPMorgan Asset Management (Europe) S.à r.l, BlackRock Investment
Management (UK) Limited, Goldman Sachs Funds plc and Morgan
Stanley Investment Management, Inc. These investments are
classified as cash equivalents as they are readily convertible into cash,
have credit ratings of AAA and above, and their fair values are subject
to minimal fluctuations.
In addition to the cash and cash equivalents, including: in the table
above, as at 31 December 2025 the Group had restricted cash
accounts comprising a liquidation fund deposit of US$9,577 thousand
with Halyk bank, and US$21 thousand with Jusan bank (31 December
2024: US$9,115 thousand with Halyk bank, and US$16 thousand with
Jusan bank), which are maintained as required by the subsoil use
rights for abandonment and site restoration liabilities of the Group.
The Group maintains a debt service retention account (DSRA) funded
to meet the forthcoming two interest instalments on SUNs and SSNs.
As at 31 December 2025, the DSRA contained US$17,023 thousand,
(31 December 2024: US$16,792 thousand on in the escrow account
established per the FBA terms).
11. Share capital and reserves
As at 31 December 2025 the ordinary share capital of the Parent
consists of 165,244,983 issued and fully paid ordinary shares, which
are listed on the London Stock Exchange. The ordinary shares have a
nominal value of GB£ 0.01. The table below represents movements in
the number of ordinary shares during the year ended 31 December
2025. The movements in the number of shares during the year ended
31 December 2024 was as follows:
FINANCIAL REPORT
| In thousands of US Dollars | 31 December 2025 | 31 December 2024 |
| VAT receivable | 1,983 | 1,115 |
| Advances for construction materials | 1,493 | 2,991 |
| Advances for construction services | 173 | 193 |
| Advances for other non-current assets | 87 | 89 |
| 3,736 | 4,388 |
| In thousands of US Dollars | 31 December 2025 | 31 December 2024 |
| Spare parts and other inventories | 28,856 | 28,182 |
| Gas condensate | 2,167 | 1,381 |
| Crude oil | 527 | 960 |
| LPG | 130 | 86 |
| Dry gas | 72 | 16 |
| Sulphur | 94 | 12 |
| 31,846 | 30,637 |
| following: In thousands of US Dollars | 31 December 2025 | 31 December 2024 |
| VAT receivable | 3,228 | 5,680 |
| Other taxes receivable | 2,334 | 974 |
| Deposits with Euroclear Bank | 2,067 | 100 |
| Advances paid | 1,671 | 2,131 |
| Other trade receivables | 654 | 144 |
| Interest receivable | 405 | 350 |
| Other | 616 | 136 |
| 10,975 | 9,515 |
| Trade receivables comprised the following: In thousands of US Dollars | 31 December 2025 | 31 December 2024 |
| Trade receivables from oil and gas condensate sales | 5,222 | 1,358 |
| Trade receivables from gas and LPG sales | 4,979 | 7,787 |
| Trade receivables from third-party hydrocarbon tolling | 35 | 59 |
| 10,236 | 9,204 |
| In thousands of US Dollars | 31 December 2025 | 31 December 2024 |
| Investments in Money Market Funds in US Dollars | 136,000 | 82,000 |
| Current accounts in US Dollars | 3,762 | 67,006 |
| Current accounts in Tenge | 2,892 | 1,215 |
| Current accounts in Euro | 465 | 125 |
| Current accounts in other currencies | 162 | 66 |
| Petty cash | 7 | 7 |
| 143,288 | 150,419 |
| Number of shares | In circulation | Treasury capital | Deferred shares | Total |
| As at 1 January 2024 | 169,086,713 | 294,848 | 15,244,344,036 | 15,413,725,597 |
| Acquisition and cancellation of deferred shares | – | – | (15,244,344,036) | (15,244,344,036) |
| As at 31 December 2024 | 169,086,713 | 294,848 | – | 169,381,561 |
| Cancellation of shares | (4,136,578) | – | – | (4,136,578) |
| As at 31 December 2025 | 164,950,135 | 294,848 | – | 165,244,983 |
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements (continued)
125 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Treasury shares were issued to support the Group’s obligations to
employees under the Employee Share Option Plan (“ESOP”) and the
Long-Term Incentive Plan (“LTIP”) and are held by Intertrust Employee
Benefit Trustee Limited as trustee for the Nostrum Oil & Gas Benefit
Trust.
On 9 February 2023, the Company completed restructuring of its notes
on the key terms as agreed under the lock-up agreement signed with
an informal ad hoc group of noteholders and its largest shareholder ICU
Holdings Limited on 22 August 2022 (the “Lock-up Agreement), and
pursuant to the terms of the Scheme sanctioned by the Court on 26
August 2022. This led to the sub-division and consolidation of the
Company's share capital. As part of the Restructuring, on 9 February
2023 the Company issued 1,505,633,046 new shares in connection
with the repayment of the remaining face value of the Group’s US$725
million 8.0% Senior Notes due July 2022 (“2022 Notes”) and its US$400
million 7.0% Senior Notes due February 2025 (“2025 Notes”) (together,
the “Old Notes”) following the issue of the SSNs and SUNs (see Note 12
below), together with accrued but unpaid interest (the “Debt for Equity
Swap”). Given the number of new shares issued, at the close of
business on
9 February 2023 the Company also performed a share consolidation, so
as to achieve an appropriate share price following closing of the
Restructuring (Note 1). As a result, the number of ordinary shares in
issue was reduced from 1,693,816,004 (following the issue of the new
shares) to 169,381,561 ordinary shares, on the basis of a 10:1
consolidation (the “Share Consolidation”). In order to give effect to the
Share Consolidation, the Company initially reduced the nominal value
of the ordinary shares (the “Sub-Division”) after the issue of the new
shares, through sub-division of each ordinary share at a ratio of 1:10
into one ordinary share of nominal value of £0.001 each together with
nine deferred shares of nominal value £0.001 each (the “Deferred
Shares”). The resulting 15,244,344,036 Deferred Shares carried no
economic or voting rights in the capital of the Company and were
subsequently acquired by the Company for nil consideration and
cancelled on 2 December 2024.
The nominal value of the ordinary shares following the Share
Consolidation was £0.01 each. Fractions of new ordinary shares were
not issued in connection with the Share Consolidation and any
fractional entitlements were rounded down to the nearest whole
ordinary share.
In February 2023, as part of the restructuring of the Company’s Notes ,
the Debt for Equity swap was recorded by the Company in accordance
with the requirements of IFRS 9 Financial Instruments and IFRIC 19
Extinguishing Financial Liabilities with Equity Instruments. As part of the
restructuring of the Notes, the share premium of US$792,744 thousand
was recognised, which included:
• US$23,133 thousand recognised as part of the shares issued with their
estimated fair value of US$42,356 thousand.
• US$769,611 thousand recognised as a difference between Old Notes
balance of US$814,181 thousand and the fair value of the shares issued
in the amount of US$42,356 thousand as described above after
deduction of the relevant proportion of lock-up fees of US$2,213
thousand.
On 7 April 2025 the Company cancelled 4,136,578 ordinary shares in
circulation, thereby reducing the number of issued ordinary shares
from 169,381,561 to 165,244,983. The cancelled shares represented
deferred shares created as part of the restructuring, share sub-division
and share consolidation completed in February 2023. In accordance
with the Company’s articles of association, all such deferred shares
were purchased by the Company for an aggregate consideration of
£1.00 and subsequently cancelled. The nominal value of each share
remained unchanged at £0.01.
Other reserves
The movements in the Group’s other reserves is presented as follows:
Reorganisation and restructuring reserve in the amount of US$255,688
thousand as at 1 January 2024 represents the difference between the
partnership capital, treasury capital and additional paid-in capital of
Nostrum Oil & Gas LP, the share capital of Nostrum Oil & Gas PLC, that
arose during the reorganisation of the Group in 2014.
The movements in reorganisation and resructuring reserve during the
year ended 31 December 2024 and 2025 result from the
Restructuring and represent recognition of the warrants and
cancellation of the deferred shares, respectively.
There were no distributions made during the year ended
31 December 2024 and year ended 31 December 2025.
12. Earnings per share
As at 31 December 2025 the ordinary share capital of the Parent
consists of 165,244,983 issued and fully paid ordinary shares, which
are listed on the London Stock Exchange. The ordinary shares have a
nominal value of GB£0.01. For the purpose of calculations of earnings
per share the number of shares for the year ended 31 December
2025:
The weighted average number of ordinary shares is 166,049,445
based on all issued shares excluding treasury shares.
13. Notes payable and accumulated interest
Notes payable and accumulated interest are comprised of the
following as at 31 December 2025 and 2024:
Notes to the consolidated financial statements (continued)
125 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
| In thousands of US Dollars | Reorgani- sation and resructurin g reserve | Foreign currency translation reserves | Share- option reserve s | Total |
| As at 1 January 2024 | 255,688 | 2,674 | 3,761 | 262,123 |
| Currency translation difference | – | (231) | – | (231) |
| Repurchase and cancellation of deferred shares | 18,551 | – | – | 18,551 |
| As at 31 December 2024 | 274,239 | 2,443 | 3,761 | 280,443 |
| Currency translation difference | – | (48) | – | (48) |
| As at 31 December 2025 | 274,239 | 2,395 | 3,761 | 280,395 |
| For the year ended 31 December | ||
| 2025 | 2024 | |
| Loss for the period attributable to the shareholders | (213,699) | (26,130) |
| Weighted average number of shares | 166,049,445 | 169,086,713 |
| Basic and dilutedearnings per share (in US dollars) | (1.29) | (0.15) |
| In thousands of US Dollars | 31 December 2025 | 31 December 2024 |
| Principal | 244,372 | 250,000 |
| Adjustments for fair value and arrangement fees | (9,458) | (27,263) |
| Accrued interest | 12,253 | 35 |
| Subtotal Senior Secured Notes | 247,167 | 222,772 |
| Principal | 428,431 | 438,061 |
| Adjustments for fair value and arrangement fees | (35,860) | (89,604) |
| PIK coupon payable | 57,506 | – |
| Accrued interest | 4,565 | 142 |
| Subtotal Senior Unsecured Notes | 454,642 | 348,599 |
| Notes payable and accumulated interest | 701,809 | 571,371 |
| Less amounts due within 12 months | (701,809) | (177) |
| Amounts due after 12 months | – | 571,194 |
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
126
FINANCIAL REPORT
Senior Secured Notes (SSNs)
Following the Restructuring of the 2017 and 2018 Notes, Nostrum Oil &
Gas Finance BV, issued US$250,000,000 senior secured notes due 30
June 2026. The SSNs bear cash-pay interest at a rate of 5.0% per year,
payable semi-annually. Pursuant to the Lock-up Agreement, the Group
has agreed that the 5.0% cash interest will accrue from 1 January 2022
and such accrued amount was paid in cash after the issue of the SSNs.
Senior Unsecured Notes (SUNs)
Following the Restructuring of the 2025 and 2022 Notes, Nostrum Oil &
Gas Finance BV issued US$300,000,000 senior notes due 30 June 2026.
The SUNs bear interest at a rate of 1.0% cash-pay and 13.0% payment-
in-kind (PIK) per year, payable semi-annually. Pursuant to the Lock-up
Agreement, the Company agreed that the 1.0% cash interest and 13.0%
PIK coupon would accrue from 1 January 2022. Accordingly, Nostrum
Oil & Gas Finance issued a principal amount of US$45,078,172
additional SUNs representing the PIK coupon which has been agreed to
be payable with effect from 1 January 2022 until 9 February 2022 upon
the issue of the SUNs. For more information, please refer to Note 1 for
Restructuring terms.
Exchange of debt instruments
Taking into account significant differences in the terms of the Old Notes
and the terms of SSNs and SUNs issued in exchange, the Group
accounted for the exchange transaction in accordance with the
requirements of IFRS 9 Financial Instruments for a substantial
modification, i.e. extinguishment of the Old Notes and recognition of
the New Notes at their fair value.
Such fair values have been determined by discounting future cash flows
at the relevant implied yields of the instruments on issue date (13.25%
for SSNs and 31.04% for SUNs). The resulting gains on initial recognition
of SSNs and SUNs in the amount of $40.294 thousand and $134.132
thousand, respectively, were recorded in the income statements under
separate line item. These adjustments will be amortised over the life of
the instruments and reflected as part of finance costs in the income
statement.
More detailed information for restructuring is disclosed in the Note 1.
SSNs and SUNs covenants
The SSNs and SUNs contained consistent covenants that, among other
things, sets following requirements, subject to certain exceptions and
qualifications, the Issuer, the Guarantors, and certain other members
of the Group:
•
Produce reports to holders, including quarterly and annual financial
statements and certain other reports and documents upon request
from bondholders;
•
Limitations on Indebtedness;
•
Limitations on restricted payments;
•
Limitations on restrictions on distributions from Group entities;
•
Limitations on sales of assets and equity interests in Group
subsidiaries;
•
Limitations on affiliate transactions;
•
Limitation on line of business;
•
Listing of the bonds on international stock exchange;
•
Change of Control;
•
Limitation on Liens;
•
Limitation on issuances of guarantees of Indebtedness;
•
Payments for Consents;
•
Additional Amounts;
•
Compliance Certificates; Default Notices;
•
Registration with the National Bank of Kazakhstan;
•
Merger and Consolidation;
•
Cash flow Arrangements.
In addition, the indentures imposed certain requirements as to future
subsidiary guarantors, and certain customary information covenants
and events of default.
Cancellation of unclaimed SSNs and SUNs
In the second quarter of 2025, approximately 2.25% of the principal
amount of the SSNs and approximately 2.20% of the total principal
amount of the SUNs and PIK was cancelled due to non-claim by former
noteholders. As a result, the Group recognised US$5,6 million and
US$9.6 million respective income within other income in the
consolidated statement of profit or loss.
Payment of coupon for 2025 and onwards
The Group was required by 30 June 2025 to have paid accrued interest
in accordance with the terms and conditions of the Notes. The due
interest has not been paid, and as of 30 July 2025 such default has
become an "Event of Default" (as defined in the conditions of the
Notes) relating to the unpaid interest on the Notes due by 30 June
2025 (the “Interest EOD”).
The delay was a result of a payment
administration issue which did not permit the Group to make payment
on the Notes, including payment-in-kind interest, through the clearing
systems without additional regulatory licenses related to sanctioned
bondholders and/or custodians. The Group has applied for the
applicable regulatory licences to make the interest payments.
On 6 October 2025, at the adjourned meeting of the senior unsecured
noteholders, the required quorum was reached and 75% of votes were
cast in favour of the extraordinary resolution, thereby waiving the
Event of Default related to the delayed interest payment. The Group
made relevant payment of consent fees to participating noteholders.
As at 31 December 2025, the accrued interest on the Notes due for
payment by 30 June 2025 and by 31 December, 2025 remained unpaid
due to the continuing of the continuing payment administration issue.
The Group, accordingly transferred a consent fee in the amount of
US$1,967 thousand to the Trustee, which were distributed to the
relevant notehodlers in early January 2026.
Reclassification to current liabilities
SSNs and SUNs have maturity date of 30 June 2026, which falls within
12 months after the reporting date. Considering this fact, as at 31
December 2025 the Group classifies the carrying amounts of the SSNs
and SUNs into current liabilities and presents them as the current
portion of long-term borrowings.
The management and the Board have been actively engaging in
discussions with noteholders concerning the potential restructuring of
the Notes, and on 30 March 2026, the Group announced that it has
reached an in principle agreement with an ad hoc group of beneficial
owners of the SSNs and the SUNs regarding the key commercial terms
for a proposed extension of the maturity date of the SSNs and the SUNs
to 31 December 2030. For more details please see Note 1.
Changes in liabilities arising from financing activities
| In thousands of US Dollars | 1 January | Cash (outflows)/inflows | Borrowing costs including amortisation of arrangement fees | Cancellation of the Notes | 31 December |
| 2025 | |||||
| Notes payable and accumulated interest | 571,371 | 1,060 | 143,116 | (13,738) | 701,809 |
| 2024 | |||||
| Notes payable and accumulated interest | 471,747 | (16,487) | 116,111 | – | 571,371 |
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements (continued)
127 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
14. Abandonment and site restoration provision
The summary of changes in abandonment and site restoration
provision during years ended 31 December 2025 and 2024 is as
follows:
Management has estimated the provision on the basis that the
relevant cash outflows will occur at the expected end of the current
subsoil use rights. Accordingly, most decommissioning activities are
expected to take place many years in the future, and the timing of
well abandonment and site restoration may change, with a
corresponding effect on the estimated cash outflows. The provision
primarily reflects estimated well abandonment and related site
restoration costs and excludes dismantlement of certain above-
ground or surface facilities, based on management’s current
assessment that such facilities are expected to remain in usable
condition, retain significant value and not require dismantlement at
the end of the current subsoil use rights. There are inherent
uncertainties in estimating future costs, including as Kazakh laws and
regulations relating to site restoration and decommissioning continue
to evolve.
The discount rate used to determine the abandonment and site
restoration provision at 31 December 2025 was 3.84%, respectively
(31 December 2024: 4.32%).
The change in the estimated cost of well liquidation and the discount
rate in the year ended 31 December 2025 resulted in the decrease of
the abandonment and site restoration provision by US$1,128
thousand (31 December 2024: increase by US$4,191 thousand).
15. Due to Government of Kazakhstan
The amount due to the Government of the Republic of Kazakhstan
reflects the present value of a liability in relation to the expenditures
made by the Government in the time period prior to signing the
Contract that were related to exploration of the Contract territory and
the construction of surface facilities in fields discovered therein and
that are reimbursable by the Group to the Government during the
production period. The total liability amount due to the Government
as stipulated by the Contract is US$ 25,000 thousand.
Repayment of this liability commenced in 2008 with the first payment
of US$1,030 thousand in March 2008 and with further payments by
equal quarterly instalments of US$258 thousand until 26 May 2031.
The liability was discounted at 13%, determined at the time of
recognition of the liability.
The summary of the changes in the amounts due to the Government
of Kazakhstan during the years ended 31 December 2025 and 2024 is
as follows:
16. Trade payables
Trade payables comprise the following as at 31 December 2025 and
2024:
17. Advances received
The advances received as at 31 December 2025 include prepayments
of
US$84 thousand for
сondensate (2024: nil), US$18 thousand for crude
oil (2024: US$1,135 thousand), US$571 thousand for LPG (2024:
US$407 thousand), and US$45 thousand for other advances (2024:
US$27 thousand).
18. Other current liabilities
Other current liabilities comprise the following as at 31 December
Other accruals include various amounts accrued according to
management best estimates and assessment of probabilities of cash
outflows, such as penalties related to tax audit payments and other
similar items.
Notes to the consolidated financial statements (continued)
127 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
| In thousands of US Dollars | 2025 | 2024 |
| Provision as at 1 January | 27,344 | 22,147 |
| Unwinding of discount | 1,182 | 1,006 |
| Change in estimates | (1,128) | 4,191 |
| Provision as at 31 December | 27,398 | 27,344 |
| In thousands of US Dollars | 2025 | 2024 |
| Balance as at 1 January | 4,231 | 4,656 |
| Unwinding of discount | 550 | 606 |
| Paid during the year | (1,031) | (1,031) |
| Balanсe as at 31 December | 3,750 | 4,231 |
| Less: current portion | (1,031) | (1,031) |
| Non-current portion | 2,719 | 3,200 |
| In thousands of US Dollars | 31 December 2025 | 31 December 2024 |
| Tenge denominated trade payables | 8,707 | 6,771 |
| US Dollar denominated trade payables | 453 | 1,165 |
| Euro denominated trade payables | 333 | 211 |
| Trade payables denominated in other currencies | 894 | 91 |
| 10,387 | 8,238 |
| 2025 and 2024: In thousands of US Dollars | 31 December 2025 | 31 December 2024 |
| Other accruals | 6,163 | 3,751 |
| Training obligations accrual | 3,597 | 5,598 |
| Due to employees | 3,637 | 3,820 |
| Taxes payable, including corporate income tax | 2,455 | 2,403 |
| Other current liabilities | 2,895 | 1,041 |
| 18,747 | 16,613 |
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
128
FINANCIAL REPORT
19. Revenue
The pricing for all of the Group’s crude oil, condensate and LPG
sales
is, directly or indirectly, related to the price of Brent crude oil. The
average Brent crude oil price the year ended 31 December 2025 was
US$69.1/bbl (year ended
31 December 2024: US$80.6/bbl).
The operations of the Group are located in only one geographic
location, Kazakhstan.
During the year ended 31 December 2025 the revenue from sales to
three major customers amounted to US$50,689 thousand, US$18,475
thousand and US$16,535 thousand respectively (year ended
31 December 2024: US$43,137 thousand, US$38,797 thousand and
US$16,210 thousand respectively). For further details of product sales
desitnations see page 13 of the Annual Report.
20. Cost of sales
For the year ended 31 December 2025, the depreciation,
depletion and amortisation increased mainly due to the
impairment reversal as of
1 January 2025.
Materials and supplies in 2025 include purchases of the raw gas in
the amount of US$5,852 thousand (2024: US$4,124 thousand).
21. General and administrative expenses
22. Selling and transportation expenses
Decrease in transportation costs and loading & storage costs is driven
by the change in condensate delivery terms to FCA Beles with
incremental increase in price discount starting from 1 January 2025.
23. Taxes other than income tax
Export customs duty is comprised of customs duties for export of
crude oil and customs fees for services such as processing of
declarations and temporary warehousing.
24. Finance costs
“Other finance costs” represent bank charges, advisor and other fees
related to financing activities of the Group.
25. Employees’ remuneration
The average monthly number of employees (including Executive
Their aggregate remuneration comprised:
The amount reflected in the income statement was US$44,961
thousand (2024: US$31,794 thousand).
FINANCIAL REPORT
| For the year ended 31 December | ||
| In thousands of US Dollars | 2025 | 2024 |
| Revenue from oil and gas condensate sales | 67,998 | 89,335 |
| Revenue from gas and LPG sales | 33,354 | 33,405 |
| Third-party hydrocarbon tolling fees | 16,535 | 14,336 |
| Revenue from sulphur sales | 133 | – |
| 118,020 | 137,076 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2025 | 2024 |
| Depreciation, depletion and amortisation | 33,121 | 25,489 |
| Payroll and related taxes | 17,317 | 18,647 |
| Materials and supplies | 11,197 | 9,918 |
| Repair, maintenance and other services | 8,240 | 8,476 |
| Well repair and maintenance costs | 5,764 | 4,667 |
| Transportation services | 3,108 | 3,568 |
| Environmental levies | 292 | 163 |
| Change in stock | (535) | 292 |
| Other | 758 | 782 |
| 79,262 | 72,002 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2025 | 2024 |
| Payroll and related taxes | 8,636 | 8,550 |
| Professional services | 4,080 | 3,556 |
| Business travel | 571 | 497 |
| Insurance fees | 533 | 457 |
| Depreciation and amortisation | 364 | 66 |
| Short-term leases | 159 | 129 |
| Communication | 156 | 160 |
| Materials and supplies | 147 | 147 |
| Bank charges | 36 | 28 |
| Other | 390 | 362 |
| 15,072 | 13,952 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2025 | 2024 |
| Transportation costs | 3,261 | 6,268 |
| Payroll and related taxes | 1,847 | 1,844 |
| Loading and storage costs | 1,094 | 4,520 |
| Other | 1,905 | 1,924 |
| 8,107 | 14,556 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2025 | 2024 |
| Export customs duty | 6,383 | 7,069 |
| Royalties | 3,235 | 4,464 |
| The RoK share | 765 | 1,106 |
| Other taxes | 875 | 542 |
| 11,258 | 13,181 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2025 | 2024 |
| Interest expense on borrowings | 144,137 | 114,391 |
| Unwinding of discount on abandonment and site restoration provision | 1,182 | 1,006 |
| Unwinding of discount on amounts due to Government of Kazakhstan | 550 | 606 |
| Other finance costs | 775 | 1,226 |
| 146,644 | 117,229 | |
| Directors) employed was as follows: | For the year ended 31 December 2025 | 2024 |
| Management and administrative | 178 | 166 |
| Technical and operational | 443 | 439 |
| 621 | 605 |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2025 | 2024 |
| Wages and salaries | 25,569 | 26,416 |
| Social security costs | 4,363 | 4,729 |
| Management Incentive Plan | 15,966 | 1,000 |
| 45,898 | 32,144 | |
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements (continued)
129 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
In 2024, Nostrum adopted the Management Incentive Plan (the
“MIP”), details of which can be found on pages 119 –121 of the
Company’s 2024 Annual Report. The performance conditions for MIP
Award 1 were met in July 2024, with vesting and payments in eight
quarterly instalments commencing in August 2024. MIP Award 1 was
awarded to 14 members of the key management personnel and
directors. The performance conditions for MIP Award 2 were met in
April 2025, with payments made during 2025. MIP Award 2 was
awarded to 14 members of the key management personnel and
directors.
Key management personnel remuneration
The following payments were made to the Directors under the MIP in
2025:
Employee share option plan (ESOP)
The Group’s Phantom Option Plan was adopted by the board of
directors of the Company on 20 June 2014 to allow for the
continuation of the option plan previously maintained by Nostrum Oil
& Gas LP. The rights and obligations in relation to this option plan
were transferred to Nostrum Oil & Gas PLC from Nostrum Oil & Gas
LP following the reorganisation.
Employees (including senior executives and executive directors) of
members of the Group received remuneration in the form of equity-
based payment transactions, whereby employees render services as
consideration for share appreciation rights, which can only be settled
in cash (“cash-settled transactions”).
2017 Long-term incentive plan
In 2017 the Group started operating a Long-term incentive plan (“the
LTIP”), that was approved by the shareholders of the Company on 26
June 2017 and adopted by the board of directors of the Company on
24 August 2017. The LTIP is a discretionary benefit offered by the
Company for the benefit of selected employees. Its main purpose is to
increase the interest of the employees in the Company's long-term
business goals and performance through share ownership. The LTIP is
an incentive for the employees' future performance and commitment
to the goals of the Company. The remuneration committee of the
board of the Company has the right to decide, in its sole discretion,
whether or not further awards will be granted in the future and to
which employees those awards will be granted.
Employees (including senior executives and executive directors) of
members of the Group may receive an award, which is a "nominal
cost option" over a specified number of ordinary shares in the capital
of the Company. The option has an exercise price of 1p per share (but
the Company has the discretion to waive this prior to exercise). In
addition, under the Rules of the LTIP the Company has discretion to
settle awards other than by transfer of shares such as by way of cash
settlement. Generally, the awards are classified as equity-settled
transactions. The share options are treated as equity-settled since
there are no legal limitations expected on issue of shares for these
upon vesting, the Group hчёas a choice of settlement and the
intention is to settle them in equity. However, in certain jurisdictions
due to regulatory requirements the Company may not be able to
settle the awards other than by transfer of cash, in which case the
awards are classified as cash-settled transactions, and accounted for
similar to SARs.
26. Other income and other expenses
For the years ended 31 December 2025 and 2024 other income
comprise the following:
Compensation for railway expenses represents LPG transportation
and loading fees, which are reimbursed by the customers.
For the years ended 31 December 2025 and 2024 other expenses
Notes to the consolidated financial statements (continued)
129 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
| For the year ended 31 December | ||
| In thousands of US Dollars | 2025 | 2024 |
| Award 1 under the MIP | 1,084 | 269 |
| Award 2 under the MIP | 7,362 | – |
| Gross pay and other benefits | 4,200 | 2,554 |
| 12,646 | 2,823 | |
| Non-Executive Directors’ remuneration | For the year ended 31 December | |
| In thousands of US Dollars | 2025 | 2024 |
| Award 1 under the MIP | 567 | 284 |
| Award 2 under the MIP | 3,925 | – |
| Gross pay and other benefits | 744 | 778 |
| 5,236 | 1,062 |
| In thousands of US Dollars | MIP Award 1 | MIP Award 2 | |
| Stephen Whyte | Chairman, Non-Executive Director | 274 | 1,897 |
| Arfan Khan | Chief Executive Officer | 424 | 2,933 |
| Fiona Paulus | Non-Executive Director | 98 | 676 |
| Chris Hopkinson | Non-Executive Director | 98 | 676 |
| Martin Gudgeon | Non-Executive Director | 98 | 676 |
| Total | 992 | 6,858 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2025 | 2024 |
| Income from cancellation of SSNs and | 13,738 | – |
| SUNs | ||
| Compensation for railway expenses | 3,222 | – |
| Reversals of training accruals | 2,027 | 652 |
| Reversals of other accruals and other items | 1,572 | 12,481 |
| Currency conversion | 64 | 120 |
| Catering and accommodation | 31 | 92 |
| Other | 242 | 80 |
| 20,896 | 13,425 | |
| comprise the following: | For the year ended 31 December | |
| In thousands of US Dollars | 2025 | 2024 |
| Management Incentive Plan | 15,966 | 1,000 |
| Business development costs | 4,333 | 4,358 |
| Agent expenses on transportation and loading | 3,469 | – |
| Penalties | 1,580 | 1,441 |
| Other taxes and penalties | 537 | 1,614 |
| Training accruals | 523 | 597 |
| Social program | 380 | 307 |
| Currency conversion | 89 | 311 |
| Loss on disposal of property, plant and equipment | 45 | 402 |
| Social contribution | – | 1,298 |
| Other | 2,605 | 1,076 |
| 29,527 | 12,404 | |
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
130
FINANCIAL REPORT
Prior year comparative were updated to align with сurrent year
presentation.
In 2024, Nostrum adopted the Management Incentive Plan (the
“MIP”), details of which can be found on pages 119 –121 of the
Company’s 2025 Annual Report.
The performance conditions for MIP Award 1 were met in 2024 and
2025, with vesting and payments in quarterly instalments. MIP Award
1 was awarded to 14 members of the key management personnel and
directors.
The performance conditions for MIP Award 2 were met in April 2025,
with payments in the amount of US$14,350 thousand made during
2025. MIP Award 2 was awarded to 14 members of the key
management personnel and directors.
Other taxes and penalties mainly include additional taxes and
penalties assessed in relation to prior periods considering new
information, which was not available at the time of preparation of
respective financial information, and relevant interpretations by the
management.
27. Income tax
The Group’s profits are assessed for income taxes mainly in the
Republic of Kazakhstan. A reconciliation between tax expense and the
product of accounting profit multiplied by the Kazakhstani tax rate
applicable to the Chinarevskoye subsoil use rights is as follows:
Jurisdictions which contribute significantly to this item are Republic of
Kazakhstan with an applicable statutory tax rate of 20% (for activities
not related to the Contract), and the Netherlands with an applicable
statutory tax rate of 25%.
Certain revisions to previous period tax assessments were made
considering new information, which was not available at the time of
preparation of respective financial information, and relevant
interpretations by the management.
The Organisation for Economic Co-operation and Development
(OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting
(BEPS) addresses the tax challenges arising from the digitalisation of
the global economy. The Global Anti-Base Erosion Model Rules (Pillar
Two model rules) apply to multinational enterprises (MNEs) with
annual revenue in excess of EUR 750 million per their consolidated
financial statements. As the Group’s consolidated revenues are less
than EUR 750 million, it is not in the scope of the Pillar Two model
rules.
In management’s view, as at 31 December 2025 there were no
significant uncertain tax positions requiring disclosure in accordance
with IFRIC 23 – Uncertainty over Income Tax Treatments.
The Group’s effective tax rate for the year ended 31 December 2025 is
negative 8.0% (2024: 875.2% %). The Group’s effective tax rate,
excluding effect of movements in exchange rates, non-deductible
interest expense on borrowings, effect of income taxed at different
rates and other one-off items, for the year ended 31 December 2025
is 24.1% (2024: 39.6%).
As at 31 December 2025, the corporate income tax prepayment of
US$109 thousand represents the difference between the preliminary
estimates base on which the advance payments have been made and
the final assessment of the income tax by companies.
As at 31 December 2025 the Group has tax losses of US$150,363
thousand (2024: US$147,229 thousand) that are available to offset
against future taxable profits in the companies in which the losses
arose within 9 years after generation and will expire in the period
2023-2029. On 21 May 2021, a Royal Decree was issued in the
Netherlands, which dictates that the tax losses can now be carried
forward indefinitely from 1 January 2022, subject to annual limit on
carry back loss utilization. Deferred tax assets have not been
recognised in respect of these losses as they may not be used to offset
taxable profits elsewhere in the Group.
Deferred tax liability is primarily attributable to operations in
Kazakhstan, hence calculated by applying the Kazakhstani statutory
tax rate applicable to the Chinarevskoye subsoil use rights to the
temporary differences between the tax amounts and the amounts
reported in the consolidated financial statements and are comprised
of the following:
FINANCIAL REPORT
| For the year ended 31 December | ||
| In thousands of US Dollars | 2025 | 2024 |
| Corporate income tax expense | 4,011 | 5,779 |
| Deferred income tax expense | (23,401) | 24,541 |
| Withholding tax | 952 | 778 |
| Adjustment in respect of the deferred income tax for the prior periods | – | 445 |
| Adjustment in respect of the current income tax for the prior periods | (187) | (3,139) |
| (18,625) | 28,404 | |
| For the year ended 31 December | ||
| In thousands of US Dollars | 2025 | 2024 |
| Loss before income tax | (232,852) | 1,827 |
| Tax rate applicable to the subsoil use rights | 30% | 30% |
| Expected tax provision | (69,856) | 548 |
| Non-deductible interest expense on borrowings and other financial expenses | 38,567 | 28,929 |
| Non-deductible taxes and penalties | 436 | (3,327) |
| Effect of exchange rate on the tax base | (1,522) | 6,722 |
| Adjustments in respect of current income tax of previous years | (187) | (3,139) |
| Effect of income taxed at different rate¹ | 8,535 | (7,118) |
| Business development costs | 1,300 | 1,607 |
| Net foreign exchange gain | (75) | (253) |
| Reversal of training provisions | (451) | (17) |
| Environmental reserve | 514 | – |
| Non-deductible unwinding of discount | 520 | 484 |
| Other non-deductible expenses | 3,594 | 3,968 |
| Income tax expense | (18,625) | 28,404 |
| In thousands of US Dollars 31 December 2025 | 31 December 2024 | |
| Deferred tax asset | ||
| Accounts payable and provisions | 1,974 | 2,714 |
| Deferred tax liability | ||
| Property, plant and equipment | (44,644) | (68,369) |
| Inventories | (2,993) | (3,409) |
| Net deferred tax liability | (45,663) | (69,064) |
| The movements in the deferred tax liability were as follows: | ||
| In thousands of US Dollars | 2025 | 2024 |
| Balance as at 1 January | 69,064 | 44,523 |
| Current period (benefit) / charge to statement of comprehensive income | (23,401) | 24,541 |
| Balance as at 31 December | 45,663 | 69,064 |
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements (continued)
131 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
28. Related party transactions
For the purpose of these consolidated financial statements
transactions with related parties mainly comprise transactions
between subsidiaries of the Company and the key management
and/or directors. It should be noted that intercompany balances and
transactions are offset on consolidation.
Remuneration (represented by short-term employee benefits) of key
management personnel amounted to US$12,646 thousand for the
year ended 31 December 2025 (year ended 31 December 2024:
US$4,926 thousand). Remuneration (represented by short-term
employee benefits) of the directors amounted to US$5,236 thousand
for the year ended 31 December 2025 (year ended 31 December
2024: US$1,062 thousand).
29. Audit and non-audit fees
During the years ended 31 December 2025 and 2024 audit and non-
The audit fees for the year ended 31 December 2025 in the table
above include the audit fees of US$13 thousand in relation to the
Parent (2024: US$10 thousand).
The audit fees for the year ended 31 December 2025 include US$nil
related to the audit of the 2024 financial statements (2024: related to
the audit of the 2023, overruns US$113 thousand and additional audit
scope of US$57 thousand). Also,
MHA Audit Services LLP provided
interim audit services in 2025 in the amount of US$49 thousand.
30. Contingent liabilities and commitments
Taxation
Kazakhstan’s tax legislation and regulations are subject to ongoing
changes and varying interpretations. Instances of inconsistent
opinions between local, regional and national tax authorities are not
unusual. The current regime of administrative fines and interest
penalties related to discovered violations of Kazakhstan’s tax laws are
severe and where the tax authorities disagree with the positions
taken by the Group the financial outcomes could be material.
Administrative fines are generally 50 - 80% of the taxes additionally
assessed and interest penalty is assessed at the refinancing rate
established by the National Bank of Kazakhstan multiplied by 1.25. As
a result, fines and penalties can be significant. For oil and gas
producing companies, fiscal periods remain open to review by tax
authorities for five calendar years from the date of the tax obligation.
Under certain circumstances reviews may cover longer periods.
Because of the uncertainties associated with Kazakhstan’s tax system,
the ultimate amount of taxes, fines and penalties, if any, may be in
excess of the amount expensed to date and accrued at 31 December
2025.
As at 31 December 2025 management believes that its interpretation
of the relevant legislation is appropriate and that the Group’s tax
position will be sustained.
Pending tax disputes
In late 2023 and late 2024 the Kazakhstan tax authorities conducted
repeat withholding tax of Zhaikmunai LLP for the financial years 2018
and 2019, and issued additional withholding tax assessments
equivalent to US$27.25 million and related interest penalties
equivalent to US$29.37 million, resulting in a total reassessment for
2018 and 2019 of $56.62 million, including interest and penalties. In
addition, in October 2025 the Kazakhstan tax authorities launched a
repeat withholding tax audit of Zhaikmunai LLP for the financial year
2020. See Note 32 “Events after the reporting date” for the results of
this additional tax audit.
Zhaikmunai LLP initially succeeded in challenging the repeat tax audit
of 2018 before the lower courts. However, in May 2025, the Supreme
Court of Kazakhstan overturned these decisions and ruled in favour of
the tax authorities. On 12 November 2025, the Company filed a
petition with the managing panel of the Supreme Court seeking
review of that decision. The Company's petition was denied on
procedural grounds and the petition was subsequently resubmitted.
Zhaikmunai LLP also challenged the legality of the repeat withholding
tax audit for 2019. The courts of first instance and appellate ruled in
favour of the tax authorities. In July 2025 Zhaikmunai LLP submitted a
final appeal to the Supreme Court of Kazakhstan.
In parallel, Zhaikmunai LLP appealed the results of the 2018 and 2019
tax audits to the Appeals Board of the Ministry of Finance of the
Republic of Kazakhstan. As at 31 December 2025, the Appeals Board
had not issued its decisions on those appeals. See Note 32 “Events
after the reporting date” for further developments.
Having considered the status of the proceedings, the nature of the
underlying claims, the professional advice received, and the fact that
tax legislation and practice in Kazakhstan can be subject to differing
interpretations by tax authorities and courts, management has
assessed the risk of an unfavourable outcome in respect of these
pending matters as possible. Accordingly, no provision has been
recognised in respect of these matters at 31 December 2025, and the
matters have instead been disclosed as contingent liabilities.
Management intends to continue to defend the Group’s position in
these matters through the available administrative, judicial and other
legal processes.
In forming this assessment, management has considered the
professional advice received, the applicable investment treaty
protections and tax laws in the relevant jurisdictions, and the specific
facts and circumstances of each matter.
Abandonment and site restoration (decommissioning)
As Kazakh laws and regulations concerning site restoration and clean-
up evolve, the Group may incur future costs, the amount of which is
currently indeterminable. Such costs, when known, will be provided
for as new information, legislation and estimates evolve.
Environmental obligations
The Group may also be subject to loss contingencies relating to
regional environmental claims that may arise from the past
operations of the related fields in which it operates. Kazakhstan’s
environmental legislation and regulations are subject to ongoing
changes and varying interpretations. As Kazakh laws and regulations
evolve concerning environmental assessments and site restoration,
the Group may incur future costs, the amount of which is currently
indeterminable due to such factors as the ultimate determination of
responsible parties associated with these costs and the Government’s
assessment of respective parties’ ability to pay for the costs related to
environmental reclamation. However, depending on any
unfavourable court decisions with respect to any claims or penalties
assessed by the Kazakh regulatory agencies, it is possible that the
Notes to the consolidated financial statements (continued)
131 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
| audit fees comprise the following: | For the year ended 31 December | |
| In thousands of US Dollars | 2025 | 2024 |
| Audit services: | ||
| RPG Crouch Chapman LLP | 442 | – |
| Grant Thornton | 239 | – |
| Ernst & Young | – | 433 |
| MHA & Baker Tilly | 62 | 804 |
| 743 | 1,237 | |
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
132
FINANCIAL REPORT
Group’s future results of operations or cash flow could be materially
affected in a particular period.
Capital commitments
As at 31 December 2025, the Group had contractual capital
commitments in the amount of US$ 2,333 thousand (31 December
2024: US$11,288 thousand), mainly in respect to the Group’s oil field
development activities.
Social and education commitments
As required by the Contract (after its amendment on 2 September
2019), the Group is obliged to:
• spend US$ 300 thousand per annum to finance social infrastructure;
• make an accrual of one percent per annum of the actual investments
for the Chinarevskoye field for the purposes of educating Kazakh
citizens.
Domestic oil sales
In accordance with Supplement # 7 to the Contract, Zhaikmunai LLP is
required to deliver at least 15% of produced oil to the domestic
market on a monthly basis for which prices are materially lower than
export prices.
31. Financial risk management objectives and policies
The Group’s principal financial liabilities comprise borrowings,
payables to the Government of Kazakhstan, trade payables and other
current liabilities. The main purpose of these financial liabilities is to
finance the Group’s operations. The Group's financial assets consist of
trade and other receivables and cash and cash equivalents that derive
directly from its operations.
The Group is exposed to commodity price risk, foreign currency risk,
liquidity risk and credit risk. The Group’s senior management oversees
the management of these risks. The Group’s senior management
ensures that the Group’s financial risk activities are
governed by
appropriate policies and procedures and that financial risks are
identified, measured and managed in accordance with the Group’s
policies and risk objectives. The Board of Directors reviews and agrees
policies for managing each of these risks, which are summarised
below.
Climate change
Management has considered how the Group’s identified climate risks
and climate related goals (as discussed in Climate Change and GHG
Emissions in the Group’s 2025 Annual Report) may impact the
estimation of the recoverable value of cash-generating unit tested for
impairment. The anticipated extent and nature of the future impact of
climate on the Group’s operations and future investment depends on
the development of new technologies and production processes
employed and the level of emissions, energy efficiency and use of
renewable energy. The sensitivity of the Group’s impairment
assessment to these factors is also impacted by the extent that
estimated recoverable value exceeds the carrying value of an
individual cash-generating unit – where this is lower there is an
increased risk of a future impact. The Group is in the process of
identifying a range of actions and initiatives to progress towards the
Group’s goals, including reduction of greenhouse gas emissions,
wastewater discharges and increase of waste utilisation. In certain
cases, the costs of such actions have been quantified and are included
in the Group’s forecasts which are used to estimate recoverable value
for the Group’s cash-generating unit. Other actions and initiatives
continue to be explored by the Group but are not sufficiently certain
to be reflected in the Group’s forecasts of estimated recoverable
value.
Commodity price risk
The Group is exposed to the effect of fluctuations in price of crude oil,
which is quoted in US dollar on the international markets. The Group
prepares annual budgets and periodic forecasts including sensitivity
analyses in respect of various levels of crude oil prices in the future.
Interest rate risk
The Group is not exposed to interest rate risk in 2025 and 2024 as the
Group had no financial instruments with floating rates as at years
ended 31 December 2025 and 2024.
Foreign currency risk
As a significant portion of the Group’s operation is Tenge
denominated, the Group’s statement of financial position can be
affected by movements in the US dollar / Tenge exchange rates. The
Group mitigates the effect of its structural currency exposure by
borrowing in US dollars and denominating sales in US dollars.
The following table demonstrates the sensitivity to a reasonably
possible change in the US dollar exchange rate, with all other variables
held constant.
A devaluation of Tenge against US dollar by 21% would lead to
decrease in the net Tenge liability position by US$2,131 thousand as
at 31 December 2025 and respective reduction of the loss before
income tax for the year ended 31 December 2025. The impact on
equity is the same as the impact on profit before tax.
The Group’s foreign currency denominated monetary assets and
liabilities were as follows:
Liquidity and funding risk
Liquidity risk is the risk that the Group will encounter difficulty in
raising funds to meet commitments associated with its financial
liabilities. The Group monitors its risk to a shortage of funds using a
liquidity planning tool. The tool allows selecting severe stress test
scenarios (for more details see Viability statement on pages 27-28 of
the Annual Report). To ensure an adequate level of liquidity a
minimum cash balance has been defined as a cushion of liquid assets.
The Group’s objective is to maintain a balance between continuity
and diversity of funding and flexibility through the use of notes, export
financing and leases.
| Change in Tenge to US dollar exchange rate | Effect on profit before tax (In thousands of US Dollars) | |
| 2025 | 21% | 1,769 |
| -21% | (2,709) | |
| 2024 | 21% | 1,182 |
| -21% | (1,810) |
| In thousands of US Dollars | Tenge | Euro | Other | Total |
| As at 31 December 2025 | ||||
| Cash and cash equivalents | 2,892 | 465 | 169 | 3,526 |
| Trade receivables | 5,013 | – | – | 5,013 |
| Trade payables | (8,707) | (333) | (894) | (9,934) |
| Other current liabilities | (9,389) | (1,461) | (147) | (10,997) |
| (10,191) | (1,329) | (872) | (12,392) | |
| As at 31 December 2024 | ||||
| Cash and cash equivalents | 1,215 | 125 | 73 | 1,413 |
| Trade receivables | 7,847 | – | – | 7,847 |
| Trade payables | (6,771) | (211) | (91) | (7,073) |
| Other current liabilities | (9,100) | (1,461) | (147) | (10,708) |
| (6,809) | (1,547) | (165) | (8,521) |
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated financial statements (continued)
133 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
For more information on analysis of the Group’s ability to meet its
liabilities on repayment of the Notes please see “Viability statement”
section on the Annual report on pages 27-28.
The table below summarizes the maturity profile of the Group's
financial liabilities at 31 December 2025 and 31 December 2024 based
on contractual undiscounted payments:
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations
under a financial instrument or customer contract, leading to a
financial loss. The Group is exposed to credit risk from its operating
activities (primarily trade receivables) and from its financing activities,
including deposits with banks and financial institutions and foreign
exchange transactions.
The Group places its investments in money market funds of JPMorgan
Asset Management (Europe) S.à r.l, BlackRock Investment
Management (UK) Limited, Goldman Sachs Funds plc and Morgan
Stanley Investment Management, Inc. These investments are
classified as cash equivalents as they are readily convertible into cash,
have credit ratings of AAA and above, and their fair values are subject
to minimal fluctuations.
The Group places its cash and deposits primarily with Citibank, N.A.,
and Halyk bank JSC with most recent credit ratings from Moody's
rating agency of Aa3 (Stable), and Baa1 (Stable), respectively.
The Group sells its products and makes advance payments only to
recognised, creditworthy third parties. In addition, receivable balances
are monitored on an ongoing basis with the result that the Group’s
exposure to bad debts and recoverability of prepayments made is not
significant and thus risk of credit default is low. Also, the Group’s
policy is to mitigate the payment risk on its off-takers by requiring all
purchases to be prepaid or secured by a letter of credit from an
international bank.
The Group considers a financial asset in default when contractual
payments are 90 days past due, however certain exceptions can be
made depending on the particular circumstances and discussions with
the counterparty. Also, in certain cases, the Group may also consider a
financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding
contractual amounts in full before taking into account any credit
enhancements held by the Group. A financial asset is written off when
there is no reasonable expectation of recovering the contractual cash
flows.
An impairment analysis is performed at each reporting date on an
individual basis for major clients. The maximum exposure to credit risk
at the reporting date is the carrying value of each class of financial
assets. The Group does not hold collateral as security . The Group
evaluates the concentration of risk with respect to trade receivables
as low, as its customers are located in several jurisdictions and
industries and operate in largely independent markets. The Group’s
maximum exposure to credit risks is represented by its balances of
cash and cash equivalents and restricted cash (Note 10).
Fair values of financial instruments
Management assessed that the fair value of cash and cash
equivalents, trade receivables, trade payables and other current
liabilities approximate their carrying amounts at 31 December 2025
and 2024.
Set out below, is a comparison by class of the carrying amounts and
fair value of the Group’s financial instruments, other than those with
carrying amounts reasonably approximating their fair values:
The fair value of the financial assets and liabilities represents the
amount at which the instruments could be exchanged in a current
transaction between willing parties, other than in a forced or
liquidation sale. Fair value of the quoted notes is based on price
quotations at the reporting date and respectively categorised as Level
1 within the fair value hierarchy.
During the years ended 31 December 2025 and 2024 there were no
transfers between the levels of fair value hierarchy of the Group’s
financial instruments.
Capital management
For the purpose of the Group’s capital management, capital includes
issued capital, additional paid-in capital and all other equity reserves
attributable to the equity holders of the additional regulatory licences
related to sanctioned noteholders. The primary objective of the
Group’s capital management is to maximise the shareholder value.
The Group manages its capital structure by considering changes to the
economic environment and the risk characteristics of the Group’s
assets. To effectively manage the entity’s capital requirements, the
Group has in place a planning, budgeting and forecasting process to
help determine the funds required to ensure the Group has the
appropriate liquidity to meet its operating and growth objectives, as
well as to provide shareholder returns.
Most recently, the Group’s focus has been on maintaining short-term
liquidity and preserving cash through cost optimisation programme,
improving product netbacks and managing the capital expenditure
programme. After successful implementation of the Proposed
Transaction, the Group will once again revisit its capital management
policy in line with new requirements of SSN and SUN trust deeds and
shareholder expectations.
32. Events after the reporting date
Pending tax disputes
On 17 February 2026, Zhaikmunai LLP received notifications that based on
the results of the meeting of the RoK Ministry of Finance Appeal Board
held on 13 February 2026, the Appeal Board rejected Company's appeal of
the results of 2018 and 2019 tax re-audits.
Zhaikmunai LLP submitted further appeals to the court of first instance on
these tax audit assessments and preliminary hearings continue as of 16
April 2026. Zhaikmunai LLP and the Nostrum Group are also considering
treaty based remedial alternatives to defend its positions.
On 11 February 2026 Zhaikmunai LLP received the tax audit report for the
repeat 2020 withholding tax audit, the assessment was equivalent of
Notes to the consolidated financial statements (continued)
133 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
| In thousands of US Dollars | On deman d | Less than 3 months | 3-12 months | 1-5 years | More than 5 years | Total |
| As at 31 December 2025 | ||||||
| Borrowings | 739,858 | – | – | – | – | 739,858 |
| Trade payables | 10,171 | – | 216 | – | – | 10,387 |
| Other current liabilities | 9,689 | – | – | – | – | 9,689 |
| Due to Government of Kazakhstan | – | 258 | 773 | 4,124 | 257 | 5,412 |
| 759,718 | 258 | 989 | 4,124 | 257 | 765,346 | |
| As at 31 December 2024 | ||||||
| Borrowings | – | – | 17,023 | 787,890 | – | 804,913 |
| Trade payables | 8,016 | – | 222 | – | – | 8,238 |
| Other current liabilities | 11,821 | – | – | – | – | 11,821 |
| Due to Government of Kazakhstan | – | 258 | 773 | 4,124 | 1,288 | 6,443 |
| 19,837 | 258 | 18,018 | 792,014 | 1,288 | 831,415 | |
| Carrying amount | Fair value | |||
| In thousands of US Dollars | 31 December 2025 | 31 December 2024 | 31 December 2025 | 31 December 2024 |
| Interest bearing borrowings | 701,809 | 571,371 | 208,146 | 186,660 |
| 701,809 | 571,371 | 208,146 | 186,660 | |
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
134
FINANCIAL REPORT
$11.54 million in tax and an additional $10.44 million in interest penalties,
for a total of $21.98 million. On 17 March 2026, Zhaikmunai LLP submitted
an appeal on the tax re-audit assesments to the Kazakhstan Ministry of
Finance Appeal Board. As of the date of publication of these consolidated
financial statements, there have been no hearings held by the Appeal
Board.
The Company believes that these tax claims are without merit. The
Company continues to monitor developments closely and will continue to
defend its interests and to assess all available legal and treaty-based
remedies.
Second consent fee payment
On 2 January 2026, the Group announced that Nostrum Oil & Gas Finance
B.V. has made the second consent fee payment as set out in the terms of
the previously consummated consent solicitation which shall mean that no
default or event of default is caused by the failure to make the interest
payment on the Notes at this time.
Extention of the maturity of the Notes
On 30 March 2026, the Group announced that it has reached an in
principle agreement with an ad hoc group of significant beneficial owners
of the SSNs and the SUNs regarding the key commercial terms for a
proposed extension of the maturity date of the SSNs and the SUNs to 31
December 2030. For more details please see Note 1.
Geopolitical Security and Oil price Developments
The armed conflict involving Iran, Israel, and the United States escalated in
early 2026 following the outbreak of wider hostilities on 28 February 2026.
These developments have increased volatility in global energy markets and
disrupted a significant portion of global oil and LNG transit through the
straight of Hormuz. These disruptions did not affect the Group’s sales and
logistics of its hydrocarbons.
Accordingly, international oil markets have remained volatile. Benchmark
crude oil prices, including Brent crude oil, experienced fluctuations driven
by ongoing geopolitical tensions, OPEC+ production decisions, and
uncertainty in the global economic outlook. Benchmark crude oil prices,
including Brent crude oil, have fluctuated between US$73/bbl to
US$120/bbl during the period from 1 January 2026 to the date of approval
of these consolidated financial statements. These in turn, had a positive
impact on the
Group’s revenues from products which are sold with Brent-
based pricing.
Effect on the Financial Statements
In accordance with IAS 10
Events after the Reporting Period, management
has assessed the developments described above and concluded that all of
them represent non-adjusting events, as they relate to conditions arising
after the reporting date. Accordingly, no adjustments have been made to
the recognition or measurement of items in these consolidated financial
statements as at 31 December 2025, including assets, liabilities, equity,
income, expenses, and cash flows.
FINANCIAL REPORT
135
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
PARENT COMPANY FINANCIAL STATEMENTS
Contents
Parent company statement of financial position ......... 136
Parent company statement of cash flows .................... 137
Parent company statement of changes in equity ........ 138
Notes to the parent company financial statements .... 139
1. G ENERAL ................................................................ 139
2. B ASIS OF PREPARATION .............................................. 140
3. C HANGES IN ACCOUNTING POLICIES AND DISCLOSURES ..... 140
4. S UMMARY OF MATERIAL ACCOUNTING POLICIES .............. 141
5. I NVESTMENTS IN SUBSIDIARIES .................................... 144
6. R ECEIVABLES FROM RELATED PARTIES ........................... 144
7. C ASH AND C ASH E QUIVALENTS .................................... 144
8. S HAREHOLDERS ’ EQUITY ............................................. 144
9. F INANCIAL GUARANTEES ............................................ 145
10. P AYABLES TO RELATED PARTIES .................................... 145
11. A UDITORS ’ REMUNERATION ........................................ 145
12. E MPLOYEE ’ S REMUNERATION ...................................... 146
13. L ONG - TERM INCENTIVE PLAN ...................................... 146
14. R ELATED PARTY TRANSACTIONS ................................... 147
15. F INANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES . 147
16. E VENTS AFTER THE REPORTING DATE ............................ 148
PARENT COMPANY FINANCIAL STATEMENTS
Contents
Parent company statement of financial position ......... 136
Parent company statement of cash flows .................... 137
Parent company statement of changes in equity ........ 138
Notes to the parent company financial statements .... 139
1. G ENERAL ................................................................ 139
2. B ASIS OF PREPARATION .............................................. 140
3. C HANGES IN ACCOUNTING POLICIES AND DISCLOSURES ..... 140
4. S UMMARY OF MATERIAL ACCOUNTING POLICIES .............. 141
5. I NVESTMENTS IN SUBSIDIARIES .................................... 144
6. R ECEIVABLES FROM RELATED PARTIES ........................... 144
7. C ASH AND C ASH E QUIVALENTS .................................... 144
8. S HAREHOLDERS ’ EQUITY ............................................. 144
9. F INANCIAL GUARANTEES ............................................ 145
10. P AYABLES TO RELATED PARTIES .................................... 145
11. A UDITORS ’ REMUNERATION ........................................ 145
12. E MPLOYEE ’ S REMUNERATION ...................................... 146
13. L ONG - TERM INCENTIVE PLAN ...................................... 146
14. R ELATED PARTY TRANSACTIONS ................................... 147
15. F INANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES . 147
16. E VENTS AFTER THE REPORTING DATE ............................ 148
The accounting policies and explanatory notes on pages 139 through 148 are an integral part of these parent company financial statements.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025 136
FINANCIAL REPORT
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
In thousands of US Dollars
Notes
31 December
2025
31 December
2024
Assets
Non-current assets
Property, plant and equipment 3 5
3 5
Current assets
Prepayments and other current assets 128 117
Receivables from related parties 6 1,609 2,000
Cash and cash equivalents 7 162 66
1,899 2,183
TOTAL ASSETS 1,902 2,188
Equity and liabilities
Share capital and reserves
Share capital 8 2,099 2,152
Share premium 792,797 792,744
Retained deficit and reserves (1,115,063) (1,035,154)
(320,167) (240,258)
Non-current liabilities
Financial guarantees, long-term 9 – 241,239
– 241,239
Current liabilities
Current portion of financial guarantees 321,228 –
Payables to related parties 10 239 235
Trade payables 507 826
Income tax payable 17 37
Other current liabilities 78 109
322,069 1,207
TOTAL EQUITY AND LIABILITIES 1,902 2,188
As permitted by section 408(3) of the Companies Act 2006, the profit and loss account of the Company is not presented in the Company’s
financial statements.
The Company reported income of US$9,617 thousand for the financial year ended 31 December 2025, which includes US$12 thousand current
income tax benefit (2024: loss US$47,424 thousand including income tax expense of US$5 thousand). During the reporting periods there were
no transactions impacting the statement of other comprehensive income.
The financial statements of Nostrum Oil & Gas PLC, registered number 8717287, were approved by the Board of Directors. The financial
statements were authorised for issue on 25 April 2026.
Signed on behalf of the Board:
Viktor Gladun
Chief Executive Officer
25 April 2026
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025 136
FINANCIAL REPORT
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
In thousands of US Dollars
Notes
31 December
2025
31 December
2024
Assets
Non-current assets
Property, plant and equipment 3 5
3 5
Current assets
Prepayments and other current assets 128 117
Receivables from related parties 6 1,609 2,000
Cash and cash equivalents 7 162 66
1,899 2,183
TOTAL ASSETS 1,902 2,188
Equity and liabilities
Share capital and reserves
Share capital 8 2,099 2,152
Share premium 792,797 792,744
Retained deficit and reserves (1,115,063) (1,035,154)
(320,167) (240,258)
Non-current liabilities
Financial guarantees, long-term 9 – 241,239
– 241,239
Current liabilities
Current portion of financial guarantees 321,228 –
Payables to related parties 10 239 235
Trade payables 507 826
Income tax payable 17 37
Other current liabilities 78 109
322,069 1,207
TOTAL EQUITY AND LIABILITIES 1,902 2,188
As permitted by section 408(3) of the Companies Act 2006, the profit and loss account of the Company is not presented in the Company’s
financial statements.
The Company reported income of US$9,617 thousand for the financial year ended 31 December 2025, which includes US$12 thousand current
income tax benefit (2024: loss US$47,424 thousand including income tax expense of US$5 thousand). During the reporting periods there were
no transactions impacting the statement of other comprehensive income.
The financial statements of Nostrum Oil & Gas PLC, registered number 8717287, were approved by the Board of Directors. The financial
statements were authorised for issue on 25 April 2026.
Signed on behalf of the Board:
Viktor Gladun
Chief Executive Officer
25 April 2026
PARENT COMPANY FINANCIAL STATEMENTS
The accounting policies and explanatory notes on pages 139 through 148 are an integral part of these parent company financial statements.
137 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
PARENT COMPANY STATEMENT OF CASH FLOWS
For the year ended 31
December
In thousands of US Dollars Notes 2025 2024
Cash flow from operating activities:
Loss before income tax (79,921) (47,419)
Adjustments for:
Depreciation 6 4
Financial guarantee loss 9 79,989 47,422
Operating profit before working capital changes 74 7
Changes in working capital:
Change in other current assets (11) 135
Change in receivables from related parties 391 (93)
Change in trade payables (319) (185)
Change in payables to related parties 4 (23)
Change in other current liabilities (31) 83
Cash used in operations 108 (76)
Income tax paid (8) (16)
Net cash from / (used in) operating activities 100 (92)
Cash flow from investing activities:
Purchase of property, plant and equipment (4) (2)
Net cash used in investing activities (4) (2)
Net change in cash and cash equivalents 96 (94)
Cash and cash equivalents at the beginning of the year 7 66 160
Cash and cash equivalents at the end of the year 7 162 66
The accounting policies and explanatory notes on pages 139 through 148 are an integral part of these parent company financial statements.
137 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
PARENT COMPANY STATEMENT OF CASH FLOWS
For the year ended 31
December
In thousands of US Dollars Notes 2025 2024
Cash flow from operating activities:
Loss before income tax (79,921) (47,419)
Adjustments for:
Depreciation 6 4
Financial guarantee loss 9 79,989 47,422
Operating profit before working capital changes 74 7
Changes in working capital:
Change in other current assets (11) 135
Change in receivables from related parties 391 (93)
Change in trade payables (319) (185)
Change in payables to related parties 4 (23)
Change in other current liabilities (31) 83
Cash used in operations 108 (76)
Income tax paid (8) (16)
Net cash from / (used in) operating activities 100 (92)
Cash flow from investing activities:
Purchase of property, plant and equipment (4) (2)
Net cash used in investing activities (4) (2)
Net change in cash and cash equivalents 96 (94)
Cash and cash equivalents at the beginning of the year 7 66 160
Cash and cash equivalents at the end of the year 7 162 66
The accounting policies and explanatory notes on pages 139 through 148 are an integral part of these parent company financial statements.
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025 138
FINANCIAL REPORT
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
In thousands of US Dollars
Notes
Share
capital
Deferred
shares
Share
premium
Other
reserves
Retained
deficit Total
As at 1 January 2024 2,152 18,551 792,744 772 (1,007,053) (192,834)
Loss for the year – – – – (47,424) (47,424)
Total comprehensive loss for the year – – – – (47,424) (47,424)
Redemption of deferred shares – (18,551) – 18,551 – –
Share based payments under LTIP 13 – – – – – –
As at 31 December 2024 2,152 – 792,744 19,323 (1,054,477) (240,258)
Loss for the year – – – – (79,909) (79,909)
Total comprehensive profit for the year – – – – (79,909) (79,909)
Cancellation of shares 8 (53) – 53 – – –
As at 31 December 2025 2,099 – 792,797 19,323 (1,134,386) (320,167)
NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025 138
FINANCIAL REPORT
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
In thousands of US Dollars
Notes
Share
capital
Deferred
shares
Share
premium
Other
reserves
Retained
deficit Total
As at 1 January 2024 2,152 18,551 792,744 772 (1,007,053) (192,834)
Loss for the year – – – – (47,424) (47,424)
Total comprehensive loss for the year – – – – (47,424) (47,424)
Redemption of deferred shares – (18,551) – 18,551 – –
Share based payments under LTIP 13 – – – – – –
As at 31 December 2024 2,152 – 792,744 19,323 (1,054,477) (240,258)
Loss for the year – – – – (79,909) (79,909)
Total comprehensive profit for the year – – – – (79,909) (79,909)
Cancellation of shares 8 (53) – 53 – – –
As at 31 December 2025 2,099 – 792,797 19,323 (1,134,386) (320,167)
PARENT COMPANY FINANCIAL STATEMENTS
139 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
1. General
Overview
Nostrum Oil & Gas PLC (“the Company”) is a public limited company
incorporated on 3 October 2013 under the Companies Act 2006 and
registered in England and Wales with registered number 8717287. The
registered address of Nostrum Oil & Gas PLC is: 20 Eastbourne Terrace,
London
W2 6LA, United Kingdom.
The subsidiary undertakings of the Company as at 31 December 2025
and the percentage holding of their capital are set out below:
Company Registered office Form of capital
Owner-
ship, %
Nostrum Oil & Gas
Holding Ltd.
20 Eastbourne Terrace, London, W2 6LA,
United Kingdom
Ordinary
shares 100
Nostrum Oil & Gas B.V. Anna van Buerenplein 41 A, Unit 4.27,
2595DA The Hague,
The Netherlands
Ordinary
shares 100
Nostrum Oil & Gas
Finance B.V.
Anna van Buerenplein 41 A, Unit 4.27,
2595DA The Hague,
The Netherlands
Ordinary
shares 100
Nostrum Oil & Gas
Coöperatief U.A.
Anna van Buerenplein 41 A, Unit 4.27,
2595DA The Hague,
The Netherlands
Members'
interests 100
Nostrum Services N.V. Chaussee de Wavre 20, 1360 Perwez,
Belgium
Ordinary
shares 100
Zhaikmunai LLP 43/1 Karev street, 090000 Uralsk,
Republic of Kazakhstan
Participatory
interests 100
Positiv Invest LLP 43/1 Karev street, 090000 Uralsk,
Republic of Kazakhstan
Participatory
interests 80
Midstream Energy
Company LLP
43B Karev street, 090000 Uralsk, Republic
of Kazakhstan
Participatory
interests 100
Nostrum Services
Central Asia LLP
Aksai 3a, 75/38, 050031 Almaty, Republic
of Kazakhstan
Participatory
interests 100
Nostrum Associated
Investments LLP
43B Karev street, 090000 Uralsk, Republic
of Kazakhstan
Participatory
interests 100
On 12 June 2025 Midstream Energy Company LLP was established in
the Republic of Kazakhstan. The company is a wholly owned
subsidiary of Nostrum Oil & Gas Finance B.V. and was created to
support the Group’s midstream operations. In October 2025,
Midstream Energy Company LLP suspended its operations.
The rest of the ownership percentages shown have not changed
year-on-year.
The Company and its wholly-owned subsidiaries are hereinafter
referred to as “the Group”.
Group debt maturity extension
During H2 2025 and early 2026, one of the strategic objectives of the
Company and the Group was the restructuring of its Senior Secured
Notes (SSN) and Senior Unsecured Notes (SUN) both maturing on 30
June 2026 ) with the objective of supporting its strategic growth
initiatives and maximizing stakeholder value.
In 2025, Group was required to have paid accrued interest in
accordance with the terms and conditions of the outstanding notes
by 30 June and 31 December 2025, but such amount remains unpaid.
The delay was the result of the continuing payment administration
issue. Group has applied for the applicable regulatory licences to
make interest payments, and meanwhile had announced two
consent fee payments as set out in the terms of the consent
solicitation.
The management and the Board has engaged with noteholders in
relation to the potential restructuring of the Notes, and on 30 March
2026, the Group announced that it has reached an in principle
agreement with an ad hoc group of beneficial owners of the SSNs
and the SUNs regarding the key commercial terms for a proposed
extension of the maturity date of the SSNs and the SUNs to 31
December 2030 (as more specifically described the below, the
"Proposed Transaction") .
More specifically, the Proposed Transaction contemplates the
following:
• Extension. An extension of the maturity date of the SSNs and the SUNs
from 30 June 2026 to 31 December 2030.
• Cash coupon. Effective from 1 July 2026 an increase in the cash pay
interest rate of the SSNs from 5.00% to 5.50% per annum; and an
increase in the cash pay interest rate of the SUNs from 1.00% to 2.00%
per annum, with the removal of the payment-in-kind (PIK) interest rate.
• Capitalisation of interest. An option for the Company to elect to
capitalise payments of interest as determined by the board based on
working capital needs, provided that such election cannot be made in
respect of two consecutive interest periods.
• PIK coupon accrued. As at the date of the Proposed Transaction, any
SUN payment-in-kind interest for each of the interest payment dates
falling on 30 June 2025, 31 December 2025 and 30 June 2026, and
which has not been allocated to the principal amount of the SUNs
through the clearing system, shall be deemed to be issued and
capitalised.
• Tender for repurchase of Notes. An invitation to holders of the SSNs
and SUNs to tender their Notes for repurchase in the form of a reverse
Dutch auction:
- SSNs: subject to a consideration cap of up to US$30 million, with an
expected acceptable price range of 40-60c (the "Available
Consideration");
- SUNs: subject to a consideration cap of the Available Consideration (if
any) remaining following the SSN Offer, with an expected acceptable
price range of 16-22c;
- The final acceptable price ranges are subject to market conditions
and the circumstances of the Group at the time the Proposed
Transaction is implemented.
• Security. SUNs shall receive the same security as the SSNs on a second
ranking basis;
• Warrants. the existing warrants shall expire as at the date the Proposed
Transaction transaction is implemented.
The launch of the the Proposed Transaction described above is
subject to required additional regulatory licences related to
sanctioned noteholders. The Group is working to obtain the
foregoing as soon as practicable.
Pending receipt of such additional regulatory licences, the Group
does not expect to be in a position to make any interest payments
with respect to the SSNs and the SUNs.
Consent fees will continue to be payable to applicable non-
sanctioned noteholders with respect to interest payments that fall
due (if any) on the same basis as described in the Issuer's consent
solicitation memorandum dated 2 September 2025.
139 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS
1. General
Overview
Nostrum Oil & Gas PLC (“the Company”) is a public limited company
incorporated on 3 October 2013 under the Companies Act 2006 and
registered in England and Wales with registered number 8717287. The
registered address of Nostrum Oil & Gas PLC is: 20 Eastbourne Terrace,
London
W2 6LA, United Kingdom.
The subsidiary undertakings of the Company as at 31 December 2025
and the percentage holding of their capital are set out below:
Company Registered office Form of capital
Owner-
ship, %
Nostrum Oil & Gas
Holding Ltd.
20 Eastbourne Terrace, London, W2 6LA,
United Kingdom
Ordinary
shares 100
Nostrum Oil & Gas B.V. Anna van Buerenplein 41 A, Unit 4.27,
2595DA The Hague,
The Netherlands
Ordinary
shares 100
Nostrum Oil & Gas
Finance B.V.
Anna van Buerenplein 41 A, Unit 4.27,
2595DA The Hague,
The Netherlands
Ordinary
shares 100
Nostrum Oil & Gas
Coöperatief U.A.
Anna van Buerenplein 41 A, Unit 4.27,
2595DA The Hague,
The Netherlands
Members'
interests 100
Nostrum Services N.V. Chaussee de Wavre 20, 1360 Perwez,
Belgium
Ordinary
shares 100
Zhaikmunai LLP 43/1 Karev street, 090000 Uralsk,
Republic of Kazakhstan
Participatory
interests 100
Positiv Invest LLP 43/1 Karev street, 090000 Uralsk,
Republic of Kazakhstan
Participatory
interests 80
Midstream Energy
Company LLP
43B Karev street, 090000 Uralsk, Republic
of Kazakhstan
Participatory
interests 100
Nostrum Services
Central Asia LLP
Aksai 3a, 75/38, 050031 Almaty, Republic
of Kazakhstan
Participatory
interests 100
Nostrum Associated
Investments LLP
43B Karev street, 090000 Uralsk, Republic
of Kazakhstan
Participatory
interests 100
On 12 June 2025 Midstream Energy Company LLP was established in
the Republic of Kazakhstan. The company is a wholly owned
subsidiary of Nostrum Oil & Gas Finance B.V. and was created to
support the Group’s midstream operations. In October 2025,
Midstream Energy Company LLP suspended its operations.
The rest of the ownership percentages shown have not changed
year-on-year.
The Company and its wholly-owned subsidiaries are hereinafter
referred to as “the Group”.
Group debt maturity extension
During H2 2025 and early 2026, one of the strategic objectives of the
Company and the Group was the restructuring of its Senior Secured
Notes (SSN) and Senior Unsecured Notes (SUN) both maturing on 30
June 2026 ) with the objective of supporting its strategic growth
initiatives and maximizing stakeholder value.
In 2025, Group was required to have paid accrued interest in
accordance with the terms and conditions of the outstanding notes
by 30 June and 31 December 2025, but such amount remains unpaid.
The delay was the result of the continuing payment administration
issue. Group has applied for the applicable regulatory licences to
make interest payments, and meanwhile had announced two
consent fee payments as set out in the terms of the consent
solicitation.
The management and the Board has engaged with noteholders in
relation to the potential restructuring of the Notes, and on 30 March
2026, the Group announced that it has reached an in principle
agreement with an ad hoc group of beneficial owners of the SSNs
and the SUNs regarding the key commercial terms for a proposed
extension of the maturity date of the SSNs and the SUNs to 31
December 2030 (as more specifically described the below, the
"Proposed Transaction") .
More specifically, the Proposed Transaction contemplates the
following:
• Extension. An extension of the maturity date of the SSNs and the SUNs
from 30 June 2026 to 31 December 2030.
• Cash coupon. Effective from 1 July 2026 an increase in the cash pay
interest rate of the SSNs from 5.00% to 5.50% per annum; and an
increase in the cash pay interest rate of the SUNs from 1.00% to 2.00%
per annum, with the removal of the payment-in-kind (PIK) interest rate.
• Capitalisation of interest. An option for the Company to elect to
capitalise payments of interest as determined by the board based on
working capital needs, provided that such election cannot be made in
respect of two consecutive interest periods.
• PIK coupon accrued. As at the date of the Proposed Transaction, any
SUN payment-in-kind interest for each of the interest payment dates
falling on 30 June 2025, 31 December 2025 and 30 June 2026, and
which has not been allocated to the principal amount of the SUNs
through the clearing system, shall be deemed to be issued and
capitalised.
• Tender for repurchase of Notes. An invitation to holders of the SSNs
and SUNs to tender their Notes for repurchase in the form of a reverse
Dutch auction:
- SSNs: subject to a consideration cap of up to US$30 million, with an
expected acceptable price range of 40-60c (the "Available
Consideration");
- SUNs: subject to a consideration cap of the Available Consideration (if
any) remaining following the SSN Offer, with an expected acceptable
price range of 16-22c;
- The final acceptable price ranges are subject to market conditions
and the circumstances of the Group at the time the Proposed
Transaction is implemented.
• Security. SUNs shall receive the same security as the SSNs on a second
ranking basis;
• Warrants. the existing warrants shall expire as at the date the Proposed
Transaction transaction is implemented.
The launch of the the Proposed Transaction described above is
subject to required additional regulatory licences related to
sanctioned noteholders. The Group is working to obtain the
foregoing as soon as practicable.
Pending receipt of such additional regulatory licences, the Group
does not expect to be in a position to make any interest payments
with respect to the SSNs and the SUNs.
Consent fees will continue to be payable to applicable non-
sanctioned noteholders with respect to interest payments that fall
due (if any) on the same basis as described in the Issuer's consent
solicitation memorandum dated 2 September 2025.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
140
FINANCIAL REPORT
2. Basis of preparation
Basis of preparation
The Company financial statements for the year ended 31 December
2025 have been prepared on a going concern basis and in accordance
with UK Adopted International Accounting Standards and the
Companies Act 2006 in so far as it is applicable when reporting under
UK adopted IFRS.
The Company financial statements have been prepared based on a
historical cost basis.
The Company financial statements are presented in US dollars and all
values are rounded to the nearest thousands, except when otherwise
indicated.
The Company recognises that there may be potential financial
implications in the future from changes in legislation and regulation
implemented to address climate change risk. Over time these
changes may have an impact across a number of areas of accounting
including asset impairment, increased costs, provisions, onerous
contracts and contingent liabilities. However, as at the reporting
sheet date, the Company believes there is no material impact on the
balance sheet carrying values of assets or liabilities. This is not
considered a significant estimate.
Going concern
These financial statements have been prepared on a going concern
basis. The Company is dependent on liquidity generated by its
subsidiaries to continue in operation and its ability to meet its
liabilities as they become due for the foreseeable future, a period of
not less than 12 months from the date of these financial statements.
Respectively, the Group level going concern matters and analysis are
considered directly relevant for the Company (please refer to page
32 of the Annual Report for more details). The directors are satisfied
that the Group will have sufficient resources to continue in operation
for the foreseeable future, a period of not less than 12 months from
the date of these financial statements. In addition, the Group has
controls in place over allocation of resources among parent and
subsidiaries.
Taking into account the abovementioned considerations the
directors are satisfied that the Company has sufficient resources to
continue in operation for the foreseeable future, a period of not less
than 12 months from the date of this report. Accordingly, they
continue to adopt the going concern basis in preparing these parent
company financial statements.
3. Changes in accounting policies and disclosures
New standards, interpretations and amendments adopted by the
Group
The accounting policies adopted in the preparation of the financial
statements are consistent with those followed in the preparation of
the Group’s annual financial statements for the year ended
31 December 2024, except for the adoption of new standards
effective as of 1 January 2025. The Group has not early adopted any
standard, interpretation or amendment that has been issued but is
not yet effective.
Several amendments apply for the first time in 2025, but do not have
an impact on the financial statements of the Group.
Lack of exchangeability - Amendments to IAS 21
The amendments to IAS 21 The Effects of Changes in Foreign
Exchange Rates specify how an entity should assess whether a
currency is exchangeable and how it should determine a spot
exchange rate when exchangeability is lacking. The amendments also
require disclosure of information that enables users of its financial
statements to understand how the currency not being exchangeable
into the other currency affects, or is expected to affect, the entity’s
financial performance, financial position and cash flows.
The amendments are effective for annual reporting periods
beginning on or after 1 January 2025.
When applying the amendments, an entity cannot restate
comparative information.
The amendments did not have a material impact on the Group’s
interim condensed financial statements.
Standards issued but not yet effective
The new and amended standards and interpretations that are issued,
but not yet effective, up to the date of issuance of the Group’s
financial statements are disclosed below. The Group intends to adopt
these new and amended standards and interpretations, if applicable,
when they become effective.
IFRS 18 Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued IFRS 18, which replaces IAS 1
Presentation of Financial Statements. IFRS 18 introduces new
requirements for presentation within the statement of profit or loss,
including specified totals and subtotals. Furthermore, entities are
required to classify all income and expenses within the statement of
profit or loss into one of five categories: operating, investing,
financing, income taxes and discontinued operations, whereof the
first three are new.
It also requires disclosure of newly defined management-defined
performance measures, subtotals of income and expenses, and
includes new requirements for aggregation and disaggregation of
financial information based on the identified ‘roles’ of the primary
financial statements (PFS) and the notes.
In addition, narrow-scope amendments have been made to IAS 7
Statement of Cash Flows, which include changing the starting point
for determining cash flows from operations under the indirect
method, from ‘profit or loss’ to ‘operating profit or loss’ and
removing the optionality around classification of cash flows from
dividends and interest. In addition, there are consequential
amendments to several other standards.
IFRS 18, and the amendments to the other standards, is effective for
reporting periods beginning on or after 1 January 2027, but earlier
application is permitted and must be disclosed. IFRS 18 will apply
retrospectively.
The Group is currently working to identify all impacts the
amendments will have on the primary financial statements and notes
to the financial statements.
IFRS 19 Subsidiaries without Public Accountability: Disclosures
In May 2024, the IASB issued IFRS 19, which allows eligible entities to
elect to apply its reduced disclosure requirements while still applying
the recognition, measurement and presentation requirements in
other IFRS accounting standards. To be eligible, at the end of the
reporting period, an entity must be a subsidiary as defined in IFRS 10,
cannot have public accountability and must have a parent (ultimate
FINANCIAL REPORT
2. Basis of preparation
Basis of preparation
The Company financial statements for the year ended 31 December
2025 have been prepared on a going concern basis and in accordance
with UK Adopted International Accounting Standards and the
Companies Act 2006 in so far as it is applicable when reporting under
UK adopted IFRS.
The Company financial statements have been prepared based on a
historical cost basis.
The Company financial statements are presented in US dollars and all
values are rounded to the nearest thousands, except when otherwise
indicated.
The Company recognises that there may be potential financial
implications in the future from changes in legislation and regulation
implemented to address climate change risk. Over time these
changes may have an impact across a number of areas of accounting
including asset impairment, increased costs, provisions, onerous
contracts and contingent liabilities. However, as at the reporting
sheet date, the Company believes there is no material impact on the
balance sheet carrying values of assets or liabilities. This is not
considered a significant estimate.
Going concern
These financial statements have been prepared on a going concern
basis. The Company is dependent on liquidity generated by its
subsidiaries to continue in operation and its ability to meet its
liabilities as they become due for the foreseeable future, a period of
not less than 12 months from the date of these financial statements.
Respectively, the Group level going concern matters and analysis are
considered directly relevant for the Company (please refer to page
32 of the Annual Report for more details). The directors are satisfied
that the Group will have sufficient resources to continue in operation
for the foreseeable future, a period of not less than 12 months from
the date of these financial statements. In addition, the Group has
controls in place over allocation of resources among parent and
subsidiaries.
Taking into account the abovementioned considerations the
directors are satisfied that the Company has sufficient resources to
continue in operation for the foreseeable future, a period of not less
than 12 months from the date of this report. Accordingly, they
continue to adopt the going concern basis in preparing these parent
company financial statements.
3. Changes in accounting policies and disclosures
New standards, interpretations and amendments adopted by the
Group
The accounting policies adopted in the preparation of the financial
statements are consistent with those followed in the preparation of
the Group’s annual financial statements for the year ended
31 December 2024, except for the adoption of new standards
effective as of 1 January 2025. The Group has not early adopted any
standard, interpretation or amendment that has been issued but is
not yet effective.
Several amendments apply for the first time in 2025, but do not have
an impact on the financial statements of the Group.
Lack of exchangeability - Amendments to IAS 21
The amendments to IAS 21 The Effects of Changes in Foreign
Exchange Rates specify how an entity should assess whether a
currency is exchangeable and how it should determine a spot
exchange rate when exchangeability is lacking. The amendments also
require disclosure of information that enables users of its financial
statements to understand how the currency not being exchangeable
into the other currency affects, or is expected to affect, the entity’s
financial performance, financial position and cash flows.
The amendments are effective for annual reporting periods
beginning on or after 1 January 2025.
When applying the amendments, an entity cannot restate
comparative information.
The amendments did not have a material impact on the Group’s
interim condensed financial statements.
Standards issued but not yet effective
The new and amended standards and interpretations that are issued,
but not yet effective, up to the date of issuance of the Group’s
financial statements are disclosed below. The Group intends to adopt
these new and amended standards and interpretations, if applicable,
when they become effective.
IFRS 18 Presentation and Disclosure in Financial Statements
In April 2024, the IASB issued IFRS 18, which replaces IAS 1
Presentation of Financial Statements. IFRS 18 introduces new
requirements for presentation within the statement of profit or loss,
including specified totals and subtotals. Furthermore, entities are
required to classify all income and expenses within the statement of
profit or loss into one of five categories: operating, investing,
financing, income taxes and discontinued operations, whereof the
first three are new.
It also requires disclosure of newly defined management-defined
performance measures, subtotals of income and expenses, and
includes new requirements for aggregation and disaggregation of
financial information based on the identified ‘roles’ of the primary
financial statements (PFS) and the notes.
In addition, narrow-scope amendments have been made to IAS 7
Statement of Cash Flows, which include changing the starting point
for determining cash flows from operations under the indirect
method, from ‘profit or loss’ to ‘operating profit or loss’ and
removing the optionality around classification of cash flows from
dividends and interest. In addition, there are consequential
amendments to several other standards.
IFRS 18, and the amendments to the other standards, is effective for
reporting periods beginning on or after 1 January 2027, but earlier
application is permitted and must be disclosed. IFRS 18 will apply
retrospectively.
The Group is currently working to identify all impacts the
amendments will have on the primary financial statements and notes
to the financial statements.
IFRS 19 Subsidiaries without Public Accountability: Disclosures
In May 2024, the IASB issued IFRS 19, which allows eligible entities to
elect to apply its reduced disclosure requirements while still applying
the recognition, measurement and presentation requirements in
other IFRS accounting standards. To be eligible, at the end of the
reporting period, an entity must be a subsidiary as defined in IFRS 10,
cannot have public accountability and must have a parent (ultimate
PARENT COMPANY FINANCIAL STATEMENTS
Notes to the parent company financial statements (continued)
141 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
or intermediate) that prepares financial statements, available for
public use, which comply with IFRS accounting standards.
IFRS 19 will become effective for reporting periods beginning on or
after 1 January 2027, with early application permitted.
As the Group’s debt instruments are publicly traded, it is not eligible
to elect to apply IFRS 19.
Contracts Referencing Nature-dependent Electricity – Amendments
to IFRS 9 and IFRS 7
In December 2024, the IASB issued Contracts Referencing Nature-
dependent Electricity (Amendments to IFRS 9 and IFRS 7). The
amendments include:
• Clarifying the application of the ‘own-use’ requirements;
• Permitting hedge accounting if these contracts are used as hedging
instruments;
• Adding new disclosure requirements to enable investors to
understand the effect of these contracts on a company’s financial
performance and cash flows.
The amendments will be effective for annual reporting periods
beginning on or after 1 January 2026. Early adoption is permitted,
but will need to be disclosed.
The clarifications regarding the ‘own use’ requirements must be
applied retrospectively, but the guidance permitting hedge
accounting have to be applied prospectively to new hedging
relationships designated on or after the date of initial application.
The amendments are not expected to have a material impact on the
Group’s financial statements.
Amendments to the Classification and Measurement of Financial
Instruments – Amendments to IFRS 9 and IFRS 7
In May 2024, the IASB issued Amendments to the Classification and
Measurement of Financial Instruments (Amendments to IFRS 9 and
IFRS 7), which:
• Clarifies that a financial liability is derecognised on the ‘settlement
date’, i.e., when the related obligation is discharged, cancelled,
expires or the liability otherwise qualifies for derecognition. It also
introduces an accounting policy option to derecognise financial
liabilities that are settled through an electronic payment system
before settlement date if certain conditions are met;
• Clarified how to assess the contractual cash flow characteristics of
financial assets that include environmental, social and governance
(ESG)-linked features and other similar contingent features;
• Clarifies the treatment of non-recourse assets and contractually
linked instruments.
Requires additional disclosures in IFRS 7 for financial assets and
liabilities with contractual terms that reference a contingent event
(including those that are ESG-linked), and equity instruments
classified at fair value through other comprehensive income.
The publication of the amendments concludes the classification and
measurement phase of the lASB’s post implementation review (PIR)
of IFRS 9 Financial Instruments.
The amendments will be effective for annual reporting periods
beginning on or after 1 January 2026. Entities can early adopt the
amendments that relate to the classification of financial assets plus
the related disclosures and apply the other amendments later.
The new requirements will be applied retrospectively with an
adjustment to opening retained earnings. Prior periods are not
required to be restated and can only be restated without using
hindsight. An entity is required to disclose information about financial
assets that change their measurement category due to the
amendments.
The amendments are not expected to have a material impact on the
Group’s financial statements.
Amendments to IAS 21 The Effects of Changes in Foreign Exchange
Rates: Translation to a Hyperinflationary Presentation Currency (issued
on 13 November 2025 and effective from 1 January 2027)
The International Accounting Standards Board (IASB) has issued
amendments that clarify how companies should translate financial
statements from a non-hyperinflationary currency into a
hyperinflationary one.
These narrow-scope amendments aim to improve the usefulness of the
resulting information in a cost-effective manner. Developed in response
to stakeholder feedback, these amendments are expected to reduce
diversity in practice and provide a clearer basis for reporting in a
hyperinflationary currency.
The amendments to IAS 21 The Effects of Changes in Foreign Exchange
Rates are effective for annual periods beginning on or after 1 January
2027. Companies can choose to apply them earlier.
4. Summary of material accounting policies
Foreign currency translation
The functional currency is the currency of the primary economic
environment in which an entity operates and is normally the
currency in which the entity primarily generates and expends cash.
The functional currency of the Company is the United States dollar
(the “US dollar” or “US$”).
Transactions in foreign currencies are initially recorded at their
respective functional currency spot rates at the date the transaction
first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are
translated at the functional currency spot rates of exchange at the
reporting date. All differences are taken to the profit or loss.
Non-monetary items that are measured in terms of historical cost in
a foreign currency are translated using the exchange rates as at the
dates of the initial transactions. Non-monetary items measured at
fair value in a foreign currency are translated using the exchange
rates at the date when the fair value is determined.
Notes to the parent company financial statements (continued)
141 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
or intermediate) that prepares financial statements, available for
public use, which comply with IFRS accounting standards.
IFRS 19 will become effective for reporting periods beginning on or
after 1 January 2027, with early application permitted.
As the Group’s debt instruments are publicly traded, it is not eligible
to elect to apply IFRS 19.
Contracts Referencing Nature-dependent Electricity – Amendments
to IFRS 9 and IFRS 7
In December 2024, the IASB issued Contracts Referencing Nature-
dependent Electricity (Amendments to IFRS 9 and IFRS 7). The
amendments include:
• Clarifying the application of the ‘own-use’ requirements;
• Permitting hedge accounting if these contracts are used as hedging
instruments;
• Adding new disclosure requirements to enable investors to
understand the effect of these contracts on a company’s financial
performance and cash flows.
The amendments will be effective for annual reporting periods
beginning on or after 1 January 2026. Early adoption is permitted,
but will need to be disclosed.
The clarifications regarding the ‘own use’ requirements must be
applied retrospectively, but the guidance permitting hedge
accounting have to be applied prospectively to new hedging
relationships designated on or after the date of initial application.
The amendments are not expected to have a material impact on the
Group’s financial statements.
Amendments to IAS 21 The Effects of Changes in Foreign Exchange
Rates: Translation to a Hyperinflationary Presentation Currency (issued
on 13 November 2025 and effective from 1 January 2027)
The International Accounting Standards Board (IASB) has issued
amendments that clarify how companies should translate financial
statements from a non-hyperinflationary currency into a
hyperinflationary one.
These narrow-scope amendments aim to improve the usefulness of the
resulting information in a cost-effective manner. Developed in response
to stakeholder feedback, these amendments are expected to reduce
diversity in practice and provide a clearer basis for reporting in a
hyperinflationary currency.
The amendments to IAS 21 The Effects of Changes in Foreign Exchange
Rates are effective for annual periods beginning on or after 1 January
2027. Companies can choose to apply them earlier.
4. Summary of material accounting policies
Foreign currency translation
The functional currency is the currency of the primary economic
environment in which an entity operates and is normally the
currency in which the entity primarily generates and expends cash.
The functional currency of the Company is the United States dollar
(the “US dollar” or “US$”).
Transactions in foreign currencies are initially recorded at their
respective functional currency spot rates at the date the transaction
first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are
translated at the functional currency spot rates of exchange at the
reporting date. All differences are taken to the profit or loss.
Non-monetary items that are measured in terms of historical cost in
a foreign currency are translated using the exchange rates as at the
dates of the initial transactions. Non-monetary items measured at
fair value in a foreign currency are translated using the exchange
rates at the date when the fair value is determined.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
142
FINANCIAL REPORT
Investments
Investments in subsidiaries are recorded at cost. Subsequently, the
Company determines whether it is necessary to recognise an
impairment loss on its investment in a subsidiary. At each reporting
date, the Company determines whether there is objective evidence
that the investment in the subsidiary is impaired. If there is such
evidence, the Company calculates the amount of impairment as the
difference between the recoverable amount of the subsidiary and its
carrying value, and then recognises the impairment loss in the
statement of profit or loss.
Significant estimates and assumptions: impairment of investments
in subsidiaries
Determination as to whether, and by how much, the investment in a
subsidiary is impaired involves management’s best estimates on
highly uncertain matters such as future revenues of the subsidiary,
operating expenses, discount rate, as well as fiscal regimes.
Since 2019, the Company have been recording impairment for the
full amount of the investments (Note 5), which has been recognised
in view of the decrease in the net assets of these subsidiaries, and
the reduction of the 2P reserves expected to be recovered from the
main operating subsidiary of the Group.
As at 31 December 2024, the reversal of an impairment loss on assets
within the Group has not resulted in the reversal of the impairment
of the investment recognised in the Company’s standalone financial
statements. Furthermore, the Group recognised impairment charge
in the amount of US$87,199 thousand for the year ended
31 December 2025.
As such, the impairment for the full amount of investments in
Nostrum Oil & Gas Holding Limited as at at 31 December 2025 and at
31 December 2024, remained appropriate.
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently
measured at amortised cost, fair value through other comprehensive
income (OCI), and fair value through profit or loss. The Company
determines the classification of its financial assets at initial
recognition.
The classification of financial assets at initial recognition depends on
the financial asset’s contractual cash flow characteristics and the
Company’s business model for managing them. With the exception
of trade receivables that do not contain a significant financing
component or for which the Company has applied the practical
expedient, the Company initially measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value through
profit or loss, transaction costs.
In order for a financial asset to be classified and measured at
amortised cost or fair value through OCI, it needs to give rise to cash
flows that are ‘solely payments of principal and interest (SPPI)’ on the
principal amount outstanding. This assessment is referred to as the
SPPI test and is performed at an instrument level.
The Company’s business model for managing financial assets refers
to how it manages its financial assets in order to generate cash flows.
The business model determines whether cash flows will result from
collecting contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets
within a time frame established by regulation or convention in the
market place (regular way trades) are recognised on the trade date,
i.e., the date that the Company commits to purchase or sell the asset.
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Company. The Company
measures financial assets at amortised cost if both of the following
conditions are met:
• The financial asset is held within a business model with the objective to
hold financial assets in order to collect contractual cash flows, and
• The contractual terms of the financial asset give rise on specified dates
to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Financial assets at amortised cost are subsequently measured using
the effective interest (EIR) method and are subject to impairment.
Gains and losses are recognised in profit or loss when the asset is
derecognised, modified or impaired.
The Company’s financial assets at amortised cost include cash and
receivables from related parties.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or
part of a group of similar financial assets) is primarily derecognised
(i.e., removed from the Company’s statement of financial position)
when:
• The rights to receive cash flows from the asset have expired; or
• The Company has transferred its rights to receive cash flows from the
asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a ‘pass-through’
arrangement; and either (a) the Company has transferred substantially
all the risks and rewards of the asset, or (b) the Company has neither
transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows
from an asset or has entered into a pass-through arrangement, it
evaluates if, and to what extent, it has retained the risks and rewards
of ownership. When it has neither transferred nor retained
substantially all of the risks and rewards of the asset, nor transferred
control of the asset, the Company continues to recognise the
transferred asset to the extent of its continuing involvement. In that
case, the Company also recognises an associated liability. The
transferred asset and the associated liability are measured on a basis
that reflects the rights and obligations that the Company has
retained.
FINANCIAL REPORT
Investments
Investments in subsidiaries are recorded at cost. Subsequently, the
Company determines whether it is necessary to recognise an
impairment loss on its investment in a subsidiary. At each reporting
date, the Company determines whether there is objective evidence
that the investment in the subsidiary is impaired. If there is such
evidence, the Company calculates the amount of impairment as the
difference between the recoverable amount of the subsidiary and its
carrying value, and then recognises the impairment loss in the
statement of profit or loss.
Significant estimates and assumptions: impairment of investments
in subsidiaries
Determination as to whether, and by how much, the investment in a
subsidiary is impaired involves management’s best estimates on
highly uncertain matters such as future revenues of the subsidiary,
operating expenses, discount rate, as well as fiscal regimes.
Since 2019, the Company have been recording impairment for the
full amount of the investments (Note 5), which has been recognised
in view of the decrease in the net assets of these subsidiaries, and
the reduction of the 2P reserves expected to be recovered from the
main operating subsidiary of the Group.
As at 31 December 2024, the reversal of an impairment loss on assets
within the Group has not resulted in the reversal of the impairment
of the investment recognised in the Company’s standalone financial
statements. Furthermore, the Group recognised impairment charge
in the amount of US$87,199 thousand for the year ended
31 December 2025.
As such, the impairment for the full amount of investments in
Nostrum Oil & Gas Holding Limited as at at 31 December 2025 and at
31 December 2024, remained appropriate.
Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently
measured at amortised cost, fair value through other comprehensive
income (OCI), and fair value through profit or loss. The Company
determines the classification of its financial assets at initial
recognition.
The classification of financial assets at initial recognition depends on
the financial asset’s contractual cash flow characteristics and the
Company’s business model for managing them. With the exception
of trade receivables that do not contain a significant financing
component or for which the Company has applied the practical
expedient, the Company initially measures a financial asset at its fair
value plus, in the case of a financial asset not at fair value through
profit or loss, transaction costs.
In order for a financial asset to be classified and measured at
amortised cost or fair value through OCI, it needs to give rise to cash
flows that are ‘solely payments of principal and interest (SPPI)’ on the
principal amount outstanding. This assessment is referred to as the
SPPI test and is performed at an instrument level.
The Company’s business model for managing financial assets refers
to how it manages its financial assets in order to generate cash flows.
The business model determines whether cash flows will result from
collecting contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets
within a time frame established by regulation or convention in the
market place (regular way trades) are recognised on the trade date,
i.e., the date that the Company commits to purchase or sell the asset.
Financial assets at amortised cost (debt instruments)
This category is the most relevant to the Company. The Company
measures financial assets at amortised cost if both of the following
conditions are met:
• The financial asset is held within a business model with the objective to
hold financial assets in order to collect contractual cash flows, and
• The contractual terms of the financial asset give rise on specified dates
to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Financial assets at amortised cost are subsequently measured using
the effective interest (EIR) method and are subject to impairment.
Gains and losses are recognised in profit or loss when the asset is
derecognised, modified or impaired.
The Company’s financial assets at amortised cost include cash and
receivables from related parties.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or
part of a group of similar financial assets) is primarily derecognised
(i.e., removed from the Company’s statement of financial position)
when:
• The rights to receive cash flows from the asset have expired; or
• The Company has transferred its rights to receive cash flows from the
asset or has assumed an obligation to pay the received cash flows in full
without material delay to a third party under a ‘pass-through’
arrangement; and either (a) the Company has transferred substantially
all the risks and rewards of the asset, or (b) the Company has neither
transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows
from an asset or has entered into a pass-through arrangement, it
evaluates if, and to what extent, it has retained the risks and rewards
of ownership. When it has neither transferred nor retained
substantially all of the risks and rewards of the asset, nor transferred
control of the asset, the Company continues to recognise the
transferred asset to the extent of its continuing involvement. In that
case, the Company also recognises an associated liability. The
transferred asset and the associated liability are measured on a basis
that reflects the rights and obligations that the Company has
retained.
PARENT COMPANY FINANCIAL STATEMENTS
Notes to the parent company financial statements (continued)
143 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Impairment of financial assets
The Company recognises an allowance for expected credit losses
(ECLs) for all debt instruments not held at fair value through profit or
loss. ECLs are based on the difference between the contractual cash
flows due in accordance with the contract and all the cash flows that
the Company expects to receive, discounted at an approximation of
the original effective interest rate. The expected cash flows will
include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which
there has not been a significant increase in credit risk since initial
recognition, ECLs are provided for credit losses that result from
default events that are possible within the next 12-months (a 12-
month ECL). For those credit exposures for which there has been a
significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining
life of the exposure, irrespective of the timing of the default (a
lifetime ECL).
For trade receivables and contract assets, the Company applies a
simplified approach in calculating ECLs. Therefore, the Company does
not track changes in credit risk, but instead recognises a loss
allowance based on lifetime ECLs at each reporting date.
Financial liabilities
Initial recognition, measurement and derecognition
Financial liabilities are classified, at initial recognition, as financial
liabilities at fair value through profit or loss, long-term borrowings,
payables, or as derivatives designated as hedging instruments in an
effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the
case of long-term borrowings and payables, net of directly
attributable transaction costs.
The Company’s financial liabilities include trade payables, payables
related parties and financial guarantee liabilities.
Subsequent measurement
For purposes of subsequent measurement, financial liabilities are
classified in two categories:
• Financial liabilities at fair value through profit or loss
• Financial liabilities at amortised cost (loans and borrowings)
Derecognition
A financial liability is derecognised when the obligation under the
liability is discharged or cancelled or expires. When an existing
financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as
the derecognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is
recognised in the statement of profit or loss.
Financial guarantees
Financial guarantee is initially recognised in the financial statements
at fair value at the time the guarantee is issued. The Company
estimates the fair value of the financial guarantee contract as the
difference between the net present value of the contractual
cashflows required under a debt instrument, and the net present
value of the net contractual cashflows that would have been
required without the guarantee. The present value is calculated using
a risk-free interest rate.
Subsequent to initial recognition, the Company’s liability under each
guarantee is measured at the higher of the amount initially
recognised less cumulative amortisation recognised in profit and loss,
and the amount of expected credit losses (ECL). Financial guarantee
ECL reflect the cash shortfalls adjusted by the risks that are specific to
the cashflows. If the ECL exceeds the initially recognised guarantee
amount less cumulative amortisation the difference is taken to profit
and loss.
A financial guarantee liability is derecognised when the liability
underlying the guarantee is discharged or cancelled or expires, or if
the guarantee is withdrawn or cancelled. The carrying amount of the
financial guarantee is taken to the statement of profit or loss.
Share-based payments
The cost of cash-settled equity-based employee compensation is
measured initially at fair value at the grant date. This fair value is
expensed over the period until vesting with the recognition of a
corresponding liability. The liability is remeasured at each reporting
date up to and including the settlement date with changes in fair
value recognised in the statement of comprehensive income.
The cost of equity-settled transactions is measured at fair value at
the grant date. This fair value is expensed over the period until
vesting with the recognition of a corresponding equity element,
which is not remeasured subsequently until the settlement date.
Estimating fair value for share-based payment transactions requires
determination of the most appropriate valuation model, which is
dependent on the terms and conditions of the grant. This estimate
also requires determination of the most appropriate inputs to the
valuation model including the expected life of the share option,
volatility and distribution yield and making assumptions about them.
The assumptions and models used for estimating fair value for share-
based payment transactions are disclosed in Note 13.
Notes to the parent company financial statements (continued)
143 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Impairment of financial assets
The Company recognises an allowance for expected credit losses
(ECLs) for all debt instruments not held at fair value through profit or
loss. ECLs are based on the difference between the contractual cash
flows due in accordance with the contract and all the cash flows that
the Company expects to receive, discounted at an approximation of
the original effective interest rate. The expected cash flows will
include cash flows from the sale of collateral held or other credit
enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which
there has not been a significant increase in credit risk since initial
recognition, ECLs are provided for credit losses that result from
default events that are possible within the next 12-months (a 12-
month ECL). For those credit exposures for which there has been a
significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining
life of the exposure, irrespective of the timing of the default (a
lifetime ECL).
For trade receivables and contract assets, the Company applies a
simplified approach in calculating ECLs. Therefore, the Company does
not track changes in credit risk, but instead recognises a loss
allowance based on lifetime ECLs at each reporting date.
Financial liabilities
Initial recognition, measurement and derecognition
All financial liabilities are recognised initially at fair value and, in the
case of long-term borrowings and payables, net of directly
attributable transaction costs.
The Company’s financial liabilities include trade payables, payables
related parties and financial guarantee liabilities.
Subsequent measurement
For purposes of subsequent measurement, financial liabilities are
classified in two categories:
• Financial liabilities at fair value through profit or loss
• Financial liabilities at amortised cost (loans and borrowings)
Derecognition
A financial liability is derecognised when the obligation under the
liability is discharged or cancelled or expires. When an existing
financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as
the derecognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is
recognised in the statement of profit or loss.
Financial guarantees
Financial guarantee is initially recognised in the financial statements
at fair value at the time the guarantee is issued. The Company
estimates the fair value of the financial guarantee contract as the
difference between the net present value of the contractual
cashflows required under a debt instrument, and the net present
value of the net contractual cashflows that would have been
required without the guarantee. The present value is calculated using
a risk-free interest rate.
Subsequent to initial recognition, the Company’s liability under each
guarantee is measured at the higher of the amount initially
recognised less cumulative amortisation recognised in profit and loss,
and the amount of expected credit losses (ECL). Financial guarantee
ECL reflect the cash shortfalls adjusted by the risks that are specific to
the cashflows. If the ECL exceeds the initially recognised guarantee
amount less cumulative amortisation the difference is taken to profit
and loss.
A financial guarantee liability is derecognised when the liability
underlying the guarantee is discharged or cancelled or expires, or if
the guarantee is withdrawn or cancelled. The carrying amount of the
financial guarantee is taken to the statement of profit or loss.
Share-based payments
The cost of cash-settled equity-based employee compensation is
measured initially at fair value at the grant date. This fair value is
expensed over the period until vesting with the recognition of a
corresponding liability. The liability is remeasured at each reporting
date up to and including the settlement date with changes in fair
value recognised in the statement of comprehensive income.
The cost of equity-settled transactions is measured at fair value at
the grant date. This fair value is expensed over the period until
vesting with the recognition of a corresponding equity element,
which is not remeasured subsequently until the settlement date.
Estimating fair value for share-based payment transactions requires
determination of the most appropriate valuation model, which is
dependent on the terms and conditions of the grant. This estimate
also requires determination of the most appropriate inputs to the
valuation model including the expected life of the share option,
volatility and distribution yield and making assumptions about them.
The assumptions and models used for estimating fair value for share-
based payment transactions are disclosed in Note 13.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
144
FINANCIAL REPORT
5. Investments in subsidiaries
As at 31 December 2025 and 31 December 2024 Investments of the
Company comprised the following:
In thousands of US Dollars
31 December
2025
31 December
2024
Nostrum Oil & Gas Holding Limited 1,111,031 1,111,031
Impairment of investments (1,111,031) (1,111,031)
– –
In May 2023, the Company performed a corporate reorganisation,
namely, in return for the transfer and assignment by the Company of
its membership and associated rights in Nostrum Oil & Gas
Coöperatief U.A. and Nostrum Oil & Gas B.V., Nostrum Oil & Gas
Holding Limited issued 100 new ordinary shares, which were allotted
and issued to the Company. As a result of this reorganising the
Company reallocated the cost of its investments in Nostrum Oil & Gas
Coöperatief U.A. and Nostrum Oil & Gas BV for the total amount of
US$106,741 thousand (excluding initial guarantee value of US$9,881
thousand) to investments to Nostrum Oil & Gas Holding Limited.
In addition, the investments in Nostrum Oil & Gas Holding Limited
include US$810,473 thousand recognised as an equivalent of the Old
Notes of Nostrum Oil & Gas Finance B.V., which were exchanged for
the shares issued by the Company during the Restructuring process.
Also, the Company acts as a guarantor under the Group’s SSNs and
SUNs, which are issued in favour of the Company’s indirect
subsidiaries, hence related costs in the amount of US$193,817
thousand at initial recognition are capitalised into the investments in
subsidiaries.
As a result of the impairment testing performed as at 31 December
2023 the Company recognised an impairment charge of US$1,111,031
thousand for the full amount of these investments in the subsidiary.
Full impairment of investments remained appropriate as at at 31
December 2025 and at 31 December 2024, ais described in Note 4
above.
6. Receivables from related parties
Receivables from related parties are comprised of the following as at
31 December 2025 and 31 December 2024:
In thousands of US Dollars
31 December
2025
31 December
2024
Receivables from Nostrum Oil & Gas
Benefit Trust
23,812 23,812
Receivables from Nostrum Oil & Gas
Coöperatief U.A.
1,575 1,969
25,387 25,781
Less: bad debt allowance (23,778) (23,781)
1,609 2,000
Receivables from the Nostrum Oil & Gas Benefit Trust (“the Trust”)
represent the loan provided to support the Company’s obligations to
employees under the Employee Share Option Plan (“ESOP”) and the
Long-Term Incentive Plan 2017 (“LTIP”) (Note 13). The loan is interest
free and unsecured. The loan is repayable in the case of an advance
used to acquire securities to satisfy the exercise of options granted
pursuant to the rules of ESOP, and unless otherwise agreed in writing
between the parties, the earlier of 1) ten years from the Date of
Grant, or 2) 30 days after the exercise date, and in all other cases any
other date agreed in writing between the parties.
The Company has recognised reversal of bad debt allowance for this
loan in the amount of US$3 thousand as at 31 December 2025 (2024:
charge of bad debt allowance of US$23 thousand).
7. Cash and Cash Equivalents
As at 31 December 2025 cash and cash equivalents comprised US$162
thousand (2024: US$66 thousand) at the current accounts in Pound
Sterling.
8. Shareholders’ equity
As at 31 December 2025 the ordinary share capital of the Company consisted
of 165,244,983 issued and fully paid ordinary shares, which are listed on the
London Stock Exchange. The ordinary shares have a nominal value of GB£ 0.01.
The movements in the number of shares during the year ended 31 December
2025 and 31 December 2024 was as follows:
Number of shares
In
circulation
Treasury
capital Total
As at 31 December
2023
169,086,713 294,848 169,381,561
Shares issued – – –
Share consolidation – – –
As at 31 December
2024
169,086,713 294,848 169,381,561
Cancellation of shares (4,136,578) – (4,136,578)
As at 31 December
2025
164,950,135 294,848 165,244,983
On 9 February 2023, the Company completed restructuring of its notes
on the key terms as agreed under the lock-up agreement signed with
an informal ad hoc group of noteholders and its largest shareholder ICU
Holdings Limited on 22 August 2022 (the “Lock-up Agreement)], and
pursuant to the terms of the Scheme sanctioned by the Court on 26
August 2022. This led to the sub-division and consolidation of the
Company's share capital. As part of the Restructuring, on 9 February
2023 the Company issued 1,505,633,046 new shares in connection
with the repayment of the remaining face value of the Group’s US$725
million 8.0% Senior Notes due July 2022 (“2022 Notes”) and its US$400
million 7.0% Senior Notes due February 2025 (“2025 Notes”) (together,
the “Old Notes”) following the issue of the SSNs and SUNs (see Note 12
below), together with accrued but unpaid interest (the “Debt for Equity
Swap”). Given the number of new shares issued, at the close of
business on
9 February 2023 the Company also performed a share consolidation, so
as to achieve an appropriate share price following closing of the
Restructuring (Note 1). As a result, the number of ordinary shares in
issue was reduced from 1,693,816,004 (following the issue of the new
shares) to 169,381,561 ordinary shares, on the basis of a 10:1
consolidation (the “Share Consolidation”). In order to give effect to the
Share Consolidation, the Company initially reduced the nominal value
of the ordinary shares (the “Sub-Division”) after the issue of the new
shares, through sub-division of each ordinary share at a ratio of 1:10
into one ordinary share of nominal value of £0.001 each together with
nine deferred shares of nominal value £0.001 each (the “Deferred
Shares”). The resulting 15,244,344,036 Deferred Shares carried no
economic or voting rights in the capital of the Company and were
subsequently acquired by the Company for nil consideration and
cancelled on 2 December 2024.
On 7 April 2025 the Company cancelled 4,136,578 ordinary shares in
circulation, thereby reducing the number of issued ordinary shares
from 169,381,561 to 165,244,983. The cancelled shares represented
deferred shares created as part of the restructuring, share sub-division
and share consolidation completed in February 2023. In accordance
with the Company’s articles of association, all such deferred shares
were purchased by the Company for an aggregate consideration of
FINANCIAL REPORT
5. Investments in subsidiaries
As at 31 December 2025 and 31 December 2024 Investments of the
Company comprised the following:
In thousands of US Dollars
31 December
2025
31 December
2024
Nostrum Oil & Gas Holding Limited 1,111,031 1,111,031
Impairment of investments (1,111,031) (1,111,031)
– –
In May 2023, the Company performed a corporate reorganisation,
namely, in return for the transfer and assignment by the Company of
its membership and associated rights in Nostrum Oil & Gas
Coöperatief U.A. and Nostrum Oil & Gas B.V., Nostrum Oil & Gas
Holding Limited issued 100 new ordinary shares, which were allotted
and issued to the Company. As a result of this reorganising the
Company reallocated the cost of its investments in Nostrum Oil & Gas
Coöperatief U.A. and Nostrum Oil & Gas BV for the total amount of
US$106,741 thousand (excluding initial guarantee value of US$9,881
thousand) to investments to Nostrum Oil & Gas Holding Limited.
In addition, the investments in Nostrum Oil & Gas Holding Limited
include US$810,473 thousand recognised as an equivalent of the Old
Notes of Nostrum Oil & Gas Finance B.V., which were exchanged for
the shares issued by the Company during the Restructuring process.
Also, the Company acts as a guarantor under the Group’s SSNs and
SUNs, which are issued in favour of the Company’s indirect
subsidiaries, hence related costs in the amount of US$193,817
thousand at initial recognition are capitalised into the investments in
subsidiaries.
As a result of the impairment testing performed as at 31 December
2023 the Company recognised an impairment charge of US$1,111,031
thousand for the full amount of these investments in the subsidiary.
Full impairment of investments remained appropriate as at at 31
December 2025 and at 31 December 2024, ais described in Note 4
above.
6. Receivables from related parties
Receivables from related parties are comprised of the following as at
31 December 2025 and 31 December 2024:
In thousands of US Dollars
31 December
2025
31 December
2024
Receivables from Nostrum Oil & Gas
Benefit Trust
23,812 23,812
Receivables from Nostrum Oil & Gas
Coöperatief U.A.
1,575 1,969
25,387 25,781
Less: bad debt allowance (23,778) (23,781)
1,609 2,000
Receivables from the Nostrum Oil & Gas Benefit Trust (“the Trust”)
represent the loan provided to support the Company’s obligations to
employees under the Employee Share Option Plan (“ESOP”) and the
Long-Term Incentive Plan 2017 (“LTIP”) (Note 13). The loan is interest
free and unsecured. The loan is repayable in the case of an advance
used to acquire securities to satisfy the exercise of options granted
pursuant to the rules of ESOP, and unless otherwise agreed in writing
between the parties, the earlier of 1) ten years from the Date of
Grant, or 2) 30 days after the exercise date, and in all other cases any
other date agreed in writing between the parties.
The Company has recognised reversal of bad debt allowance for this
loan in the amount of US$3 thousand as at 31 December 2025 (2024:
charge of bad debt allowance of US$23 thousand).
7. Cash and Cash Equivalents
As at 31 December 2025 cash and cash equivalents comprised US$162
thousand (2024: US$66 thousand) at the current accounts in Pound
Sterling.
8. Shareholders’ equity
As at 31 December 2025 the ordinary share capital of the Company consisted
of 165,244,983 issued and fully paid ordinary shares, which are listed on the
London Stock Exchange. The ordinary shares have a nominal value of GB£ 0.01.
The movements in the number of shares during the year ended 31 December
2025 and 31 December 2024 was as follows:
Number of shares
In
circulation
Treasury
capital Total
As at 31 December
2023
169,086,713 294,848 169,381,561
Shares issued – – –
Share consolidation – – –
As at 31 December
2024
169,086,713 294,848 169,381,561
Cancellation of shares (4,136,578) – (4,136,578)
As at 31 December
2025
164,950,135 294,848 165,244,983
On 9 February 2023, the Company completed restructuring of its notes
on the key terms as agreed under the lock-up agreement signed with
an informal ad hoc group of noteholders and its largest shareholder ICU
Holdings Limited on 22 August 2022 (the “Lock-up Agreement)], and
pursuant to the terms of the Scheme sanctioned by the Court on 26
August 2022. This led to the sub-division and consolidation of the
Company's share capital. As part of the Restructuring, on 9 February
2023 the Company issued 1,505,633,046 new shares in connection
with the repayment of the remaining face value of the Group’s US$725
million 8.0% Senior Notes due July 2022 (“2022 Notes”) and its US$400
million 7.0% Senior Notes due February 2025 (“2025 Notes”) (together,
the “Old Notes”) following the issue of the SSNs and SUNs (see Note 12
below), together with accrued but unpaid interest (the “Debt for Equity
Swap”). Given the number of new shares issued, at the close of
business on
9 February 2023 the Company also performed a share consolidation, so
as to achieve an appropriate share price following closing of the
Restructuring (Note 1). As a result, the number of ordinary shares in
issue was reduced from 1,693,816,004 (following the issue of the new
shares) to 169,381,561 ordinary shares, on the basis of a 10:1
consolidation (the “Share Consolidation”). In order to give effect to the
Share Consolidation, the Company initially reduced the nominal value
of the ordinary shares (the “Sub-Division”) after the issue of the new
shares, through sub-division of each ordinary share at a ratio of 1:10
into one ordinary share of nominal value of £0.001 each together with
nine deferred shares of nominal value £0.001 each (the “Deferred
Shares”). The resulting 15,244,344,036 Deferred Shares carried no
economic or voting rights in the capital of the Company and were
subsequently acquired by the Company for nil consideration and
cancelled on 2 December 2024.
On 7 April 2025 the Company cancelled 4,136,578 ordinary shares in
circulation, thereby reducing the number of issued ordinary shares
from 169,381,561 to 165,244,983. The cancelled shares represented
deferred shares created as part of the restructuring, share sub-division
and share consolidation completed in February 2023. In accordance
with the Company’s articles of association, all such deferred shares
were purchased by the Company for an aggregate consideration of
PARENT COMPANY FINANCIAL STATEMENTS
Notes to the parent company financial statements (continued)
145 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
£1.00 and subsequently cancelled. The nominal value of each share
remained unchanged at £0.01.
Treasury shares
Treasury shares were issued to support the Group’s obligations to
employees under the Employee Share Option Plan (“ESOP”) and the
Long-Term Incentive Plan (“LTIP”) and are held by Intertrust Employee
Benefit Trustee Limited as trustee for the Nostrum Oil & Gas Benefit
Trust. In the case of the ESOP, upon request from employees to
exercise options, the trustee would sell shares on the market and
settle respective obligations under the ESOP. In the case of share-
settled LTIP awards, the trustee would transfer shares to the relevant
LTIP award holder (although no LTIP awards are currently exercisable).
The Nostrum Oil & Gas Benefit Trust constitutes a special purpose
entity under IFRS and therefore, the shares held in the trust are
recorded as treasury capital of the Company.
Group reorganisation reserve in the amount of US$274,239 thousand
represents the difference between the partnership capital, treasury
capital and additional paid-in capital of Nostrum Oil & Gas LP and the
share capital of Nostrum Oil & Gas PLC, that arose during the
reorganisation of the Group in 2014. Share-option reserves include
amounts related to sale of treasury shares under ESOP as well as
share-based payments under LTIP.
Nostrum Oil & Gas PLC became the new holding company for the
business of Nostrum Oil & Gas LP based on the resolution passed by
its limited partners on 17 June 2014 followed by the Company
reorganisation referred to in that resolution.
9. Financial guarantees
Financial guarantees are comprised of the following as at 31
December 2025 and 31 December 2024:
In thousands of US Dollars 2025 2024
Financial guarantee as at 1 January 241,239 193,817
Financial guarantee loss 79,989 47,422
Financial guarantee as at 31 December 321,228 241,239
As at 31 December 2025 the Company performed an assessment of
the value of the guarantees issued under SSNs and SUNs, taking into
account the Group’s financial position as at 31 December 2025 and
the fact that the Company is the parent entity in the Group and so
would ultimately assume the guarantee obligations of its subsidiaries
in the event of their inability to meet such obligations. As a result, the
Company has recognised the guarantee liabilities for the total amount
of US$321,228 thousand (2024: US$241,239 thousand), representing
the amount of expected credit losses as of the reporting date. Further
details on the Notes are provided below.
Senior Secured Notes and Senior Unsecured Notes
On 8 February 2023, the Group completed restructuring of the
Group’s US$725 million 8.0% Senior Notes due July 2022 and its
US$400 million 7.0% Senior Notes due February 2025. Through the
partial reinstatement of debt of US$250 million Senior Secured Notes
(SSNs) and US$300 million Senior Unsecured Notes (SUNs).
The SSNs and SUNs are jointly and severally guaranteed (the “2023
Guarantees”) on a senior basis by Nostrum Oil & Gas PLC, Nostrum Oil
& Gas Coöperatief U.A., Zhaikmunai LLP and Nostrum Oil & Gas B.V.
(the “2023 Guarantors”). SUNs and SSNs Issuer’s and the 2023
Guarantors’ senior obligations and rank equally with all of the 2023
Issuer’s and the 2023 Guarantors’ other senior indebtedness.
Reclassification to current liabilities
SSNs and SUNs have maturity date of 30 June 2026, which falls within
12 months after the reporting date. Considering this fact, as at 31
December 2025 the Group classifies the carrying amounts of the SSNs
and SUNs into current liabilities and presents them as the current
portion of long-term borrowings. Respectively, the Company classifies
the underlying guarantee as a current liability as at
31 December 2025 as well.
The management and the Board have been actively engaging in
discussions with noteholders concerning the potential restructuring of
the Notes, and on 30 March 2026, the Group announced that it has
reached an in principle agreement with an ad hoc group of beneficial
owners of the SSNs and the SUNs regarding the key commercial
terms for a proposed extension of the maturity date of the SSNs and
the SUNs to 31 December 2030. For details, refer to page 34 of Annual
Report.
10. Payables to related parties
Payables to related parties are comprised of the following as at 31
December 2025 and 31 December 2024:
In thousands of US Dollars 31 December
2025
31 December
2024
Payables to Nostrum Oil & Gas
Coöperatief U.A.
34 31
Interest payable Nostrum Oil & Gas
Finance B.V.
205 204
239 235
As at 31 December 2025 and 2024 amounts payable to Nostrum Oil &
Gas Coöperatief U.A. represent the arrangements in respect of the
Nostrum employee benefit trust. For more details, please refer to
Note 6. Based on the service agreement, the amounts payable to
Nostrum Oil & Gas Coöperatief U.A. in respect to the employee
benefit trust, are only repayable to the extent of amounts received (or
recovered) from the Trust. Considering the fact that the loan is
repayable to the extent of the assets of the Trust, which are reflected
in treasury shares held by the Trust, the Company has remeasured
and increased the loan payable as at 31 December 2025 by US$3
thousand (2024: reduced by US$23 thousand), representing the
difference between the book value of the loan and the recoverable
value of the treasury shares as of 31 December 2025.
As at 31 December 2025 amount payable to Nostrum Oil & Gas
Finance B.V. represent interest accrued in the amount US$204
thousand on the loan from Nostrum Oil & Gas Finance B.V.
11. Auditors’ remuneration
For the year ended 31 December 2025 the fees for the audit of the
Company amount to US$13 thousand (2024: US$10 thousand).
Notes to the parent company financial statements (continued)
145 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
£1.00 and subsequently cancelled. The nominal value of each share
remained unchanged at £0.01.
Treasury shares
Treasury shares were issued to support the Group’s obligations to
employees under the Employee Share Option Plan (“ESOP”) and the
Long-Term Incentive Plan (“LTIP”) and are held by Intertrust Employee
Benefit Trustee Limited as trustee for the Nostrum Oil & Gas Benefit
Trust. In the case of the ESOP, upon request from employees to
exercise options, the trustee would sell shares on the market and
settle respective obligations under the ESOP. In the case of share-
settled LTIP awards, the trustee would transfer shares to the relevant
LTIP award holder (although no LTIP awards are currently exercisable).
The Nostrum Oil & Gas Benefit Trust constitutes a special purpose
entity under IFRS and therefore, the shares held in the trust are
recorded as treasury capital of the Company.
Group reorganisation reserve in the amount of US$274,239 thousand
represents the difference between the partnership capital, treasury
capital and additional paid-in capital of Nostrum Oil & Gas LP and the
share capital of Nostrum Oil & Gas PLC, that arose during the
reorganisation of the Group in 2014. Share-option reserves include
amounts related to sale of treasury shares under ESOP as well as
share-based payments under LTIP.
Nostrum Oil & Gas PLC became the new holding company for the
business of Nostrum Oil & Gas LP based on the resolution passed by
its limited partners on 17 June 2014 followed by the Company
reorganisation referred to in that resolution.
9. Financial guarantees
Financial guarantees are comprised of the following as at 31
December 2025 and 31 December 2024:
In thousands of US Dollars 2025 2024
Financial guarantee as at 1 January 241,239 193,817
Financial guarantee loss 79,989 47,422
Financial guarantee as at 31 December 321,228 241,239
As at 31 December 2025 the Company performed an assessment of
the value of the guarantees issued under SSNs and SUNs, taking into
account the Group’s financial position as at 31 December 2025 and
the fact that the Company is the parent entity in the Group and so
would ultimately assume the guarantee obligations of its subsidiaries
in the event of their inability to meet such obligations. As a result, the
Company has recognised the guarantee liabilities for the total amount
of US$321,228 thousand (2024: US$241,239 thousand), representing
the amount of expected credit losses as of the reporting date. Further
details on the Notes are provided below.
Senior Secured Notes and Senior Unsecured Notes
On 8 February 2023, the Group completed restructuring of the
Group’s US$725 million 8.0% Senior Notes due July 2022 and its
US$400 million 7.0% Senior Notes due February 2025. Through the
partial reinstatement of debt of US$250 million Senior Secured Notes
(SSNs) and US$300 million Senior Unsecured Notes (SUNs).
The SSNs and SUNs are jointly and severally guaranteed (the “2023
Guarantees”) on a senior basis by Nostrum Oil & Gas PLC, Nostrum Oil
& Gas Coöperatief U.A., Zhaikmunai LLP and Nostrum Oil & Gas B.V.
(the “2023 Guarantors”). SUNs and SSNs Issuer’s and the 2023
Guarantors’ senior obligations and rank equally with all of the 2023
Issuer’s and the 2023 Guarantors’ other senior indebtedness.
Reclassification to current liabilities
SSNs and SUNs have maturity date of 30 June 2026, which falls within
12 months after the reporting date. Considering this fact, as at 31
December 2025 the Group classifies the carrying amounts of the SSNs
and SUNs into current liabilities and presents them as the current
portion of long-term borrowings. Respectively, the Company classifies
the underlying guarantee as a current liability as at
31 December 2025 as well.
The management and the Board have been actively engaging in
discussions with noteholders concerning the potential restructuring of
the Notes, and on 30 March 2026, the Group announced that it has
reached an in principle agreement with an ad hoc group of beneficial
owners of the SSNs and the SUNs regarding the key commercial
terms for a proposed extension of the maturity date of the SSNs and
the SUNs to 31 December 2030. For details, refer to page 34 of Annual
Report.
10. Payables to related parties
Payables to related parties are comprised of the following as at 31
December 2025 and 31 December 2024:
In thousands of US Dollars 31 December
2025
31 December
2024
Payables to Nostrum Oil & Gas
Coöperatief U.A.
34 31
Interest payable Nostrum Oil & Gas
Finance B.V.
205 204
239 235
As at 31 December 2025 and 2024 amounts payable to Nostrum Oil &
Gas Coöperatief U.A. represent the arrangements in respect of the
Nostrum employee benefit trust. For more details, please refer to
Note 6. Based on the service agreement, the amounts payable to
Nostrum Oil & Gas Coöperatief U.A. in respect to the employee
benefit trust, are only repayable to the extent of amounts received (or
recovered) from the Trust. Considering the fact that the loan is
repayable to the extent of the assets of the Trust, which are reflected
in treasury shares held by the Trust, the Company has remeasured
and increased the loan payable as at 31 December 2025 by US$3
thousand (2024: reduced by US$23 thousand), representing the
difference between the book value of the loan and the recoverable
value of the treasury shares as of 31 December 2025.
As at 31 December 2025 amount payable to Nostrum Oil & Gas
Finance B.V. represent interest accrued in the amount US$204
thousand on the loan from Nostrum Oil & Gas Finance B.V.
11. Auditors’ remuneration
For the year ended 31 December 2025 the fees for the audit of the
Company amount to US$13 thousand (2024: US$10 thousand).
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
146
FINANCIAL REPORT
12. Employee’s remuneration
The average monthly number of employees employed was as follows:
For the year ended 31 December
In thousands of US Dollars 2025 2024
Executive Directors 0 0
Administrative personnel 5 4.5
4.5
Their aggregate remuneration comprised: For the year ended 31
December
In thousands of US Dollars 2025 2024
Wages and salaries 474 506
Social security costs 164 178
Other benefits 61 38
699 722
The directors of the Company are also directors of the Group. The
aggregate amount of remuneration paid to or receivable by executive
directors in respect of qualifying services for the financial year ended
31 December 2025 was nil (2024: was nil). In addition, US$5,236
thousand (2024: US$1,024 thousand) was paid by the Company to the
non-executive directors. The directors do not believe that it is
practicable to apportion these amounts between their services as
directors of the Company and their services as directors of the Group.
For the year ended 31 December 2025 the Company employed an
average of 4 non-executive directors (2024: 5 non-executive
directors).
Full details of individual directors’ remuneration are given in the
directors’ remuneration report on pages 82-93 of the annual report.
13. Long-term incentive plan
2017 Long-term incentive plan
In 2017 the Company started operating a Long-term incentive plan
(“the LTIP”), that was approved by the shareholders of the Company
on 26 June 2017 and adopted by the board of directors of the
Company on 24 August 2017. The LTIP is a discretionary benefit
offered by the Company for the benefit of selected employees. Its
main purpose is to increase the interest of the employees in the
Company's long-term business goals and performance through share
ownership. The LTIP is an incentive for the employees' future
performance and commitment to the goals of the Company. The
remuneration committee of the board of the Company has the right
to decide, in its sole discretion, whether or not further awards will be
granted in the future and to which employees those awards will be
granted.
Employees (including senior executives and executive directors) of
members of the Group or their associates may receive an award,
which is a "nominal cost option" over a specified number of ordinary
shares in the capital of the Company. The option has an exercise price
of 1p per share (but the Company has the discretion to waive this
prior to exercise). In addition, under the Rules of the LTIP the
Company has discretion to settle awards other than by transfer of
shares such as by way of cash settlement. Generally, the awards are
classified as equity-settled transactions. The share options are treated
as equity-settled since there are no legal limitations expected on issue
of shares for these upon vesting, the Company has a choice of
settlement and the intention is to settle them in equity. However, in
certain jurisdictions due to regulatory requirements the Company
may not be able to settle the awards other than by transfer of cash, in
which case the awards are classified as cash-settled transactions, and
accounted for similar to SARs.
The award ordinarily vests and becomes exercisable as from later of
the third anniversary of grant or two years after the date on which the
Company determines whether the performance condition has been
satisfied, subject to employee’s continued service and to the extent to
which the performance condition is satisfied, until the end of the
contractual life. The contractual life of the share options is ten years.
The cost of cash-settled equity-based employee compensation is
measured initially at fair value at the grant date using a trinomial
lattice valuation model. This fair value is expensed over the period
until vesting with the recognition of a corresponding liability. The
liability is remeasured at each reporting date up to and including the
settlement date with changes in fair value recognised in the
statement of comprehensive income.
The cost of equity-settled transactions is measured at fair value at the
grant date using a trinomial lattice valuation model. This fair value is
expensed over the period until vesting with the recognition of a
corresponding equity element of “shares to be issued under LTIP”,
which is not remeasured subsequently until the settlement date.
The following table summarises the movement in the number of
outstanding share options capable of vesting during the years ended
31 December 2025 and 31 December 2024:
Equity-
settled
awards
Cash-
settled
awards
TOTAL
awards
As at 31 December 2023 139,840 – 139,840
Share options forfeited – – –
As at 31 December 2024 139,840 – 139,840
Share options forfeited – – –
As at 31 December 2025 139,840 – 139,840
In 2017 the Company granted 1,208,843 share options, of which
308,850 share options remained outstanding as at 31 December 2025
(2024: 308,850 share options). The weighted average remaining
contractual life of share options outstanding as at 31 December 2025
was 2 years (2023: 3 years). On 23 March 2018 the remuneration
committee of the board of the Company determined the level of
performance conditions that were met for the performance
conditions set upon issue of the share options granted in 2017. After
adjusting for the non-achievement of performance conditions,
139,840 share options are capable of vesting as of 31 December 2025
(2024: 139,840 share options) and all of these share options were
vested, in accordance with the management’s best estimate, and
exercisable as of 31 December 2025.
On 28 November 2018 the Company granted a further 1,163,040
share options, however due to the performance conditions not being
met none of these share options are capable of vesting.
FINANCIAL REPORT
12. Employee’s remuneration
The average monthly number of employees employed was as follows:
For the year ended 31 December
In thousands of US Dollars 2025 2024
Executive Directors 0 0
Administrative personnel 5 4.5
4.5
Their aggregate remuneration comprised: For the year ended 31
December
In thousands of US Dollars 2025 2024
Wages and salaries 474 506
Social security costs 164 178
Other benefits 61 38
699 722
The directors of the Company are also directors of the Group. The
aggregate amount of remuneration paid to or receivable by executive
directors in respect of qualifying services for the financial year ended
31 December 2025 was nil (2024: was nil). In addition, US$5,236
thousand (2024: US$1,024 thousand) was paid by the Company to the
non-executive directors. The directors do not believe that it is
practicable to apportion these amounts between their services as
directors of the Company and their services as directors of the Group.
For the year ended 31 December 2025 the Company employed an
average of 4 non-executive directors (2024: 5 non-executive
directors).
Full details of individual directors’ remuneration are given in the
directors’ remuneration report on pages 82-93 of the annual report.
13. Long-term incentive plan
2017 Long-term incentive plan
In 2017 the Company started operating a Long-term incentive plan
(“the LTIP”), that was approved by the shareholders of the Company
on 26 June 2017 and adopted by the board of directors of the
Company on 24 August 2017. The LTIP is a discretionary benefit
offered by the Company for the benefit of selected employees. Its
main purpose is to increase the interest of the employees in the
Company's long-term business goals and performance through share
ownership. The LTIP is an incentive for the employees' future
performance and commitment to the goals of the Company. The
remuneration committee of the board of the Company has the right
to decide, in its sole discretion, whether or not further awards will be
granted in the future and to which employees those awards will be
granted.
Employees (including senior executives and executive directors) of
members of the Group or their associates may receive an award,
which is a "nominal cost option" over a specified number of ordinary
shares in the capital of the Company. The option has an exercise price
of 1p per share (but the Company has the discretion to waive this
prior to exercise). In addition, under the Rules of the LTIP the
Company has discretion to settle awards other than by transfer of
shares such as by way of cash settlement. Generally, the awards are
classified as equity-settled transactions. The share options are treated
as equity-settled since there are no legal limitations expected on issue
of shares for these upon vesting, the Company has a choice of
settlement and the intention is to settle them in equity. However, in
certain jurisdictions due to regulatory requirements the Company
may not be able to settle the awards other than by transfer of cash, in
which case the awards are classified as cash-settled transactions, and
accounted for similar to SARs.
The award ordinarily vests and becomes exercisable as from later of
the third anniversary of grant or two years after the date on which the
Company determines whether the performance condition has been
satisfied, subject to employee’s continued service and to the extent to
which the performance condition is satisfied, until the end of the
contractual life. The contractual life of the share options is ten years.
The cost of cash-settled equity-based employee compensation is
measured initially at fair value at the grant date using a trinomial
lattice valuation model. This fair value is expensed over the period
until vesting with the recognition of a corresponding liability. The
liability is remeasured at each reporting date up to and including the
settlement date with changes in fair value recognised in the
statement of comprehensive income.
The cost of equity-settled transactions is measured at fair value at the
grant date using a trinomial lattice valuation model. This fair value is
expensed over the period until vesting with the recognition of a
corresponding equity element of “shares to be issued under LTIP”,
which is not remeasured subsequently until the settlement date.
The following table summarises the movement in the number of
outstanding share options capable of vesting during the years ended
31 December 2025 and 31 December 2024:
Equity-
settled
awards
Cash-
settled
awards
TOTAL
awards
As at 31 December 2023 139,840 – 139,840
Share options forfeited – – –
As at 31 December 2024 139,840 – 139,840
Share options forfeited – – –
As at 31 December 2025 139,840 – 139,840
In 2017 the Company granted 1,208,843 share options, of which
308,850 share options remained outstanding as at 31 December 2025
(2024: 308,850 share options). The weighted average remaining
contractual life of share options outstanding as at 31 December 2025
was 2 years (2023: 3 years). On 23 March 2018 the remuneration
committee of the board of the Company determined the level of
performance conditions that were met for the performance
conditions set upon issue of the share options granted in 2017. After
adjusting for the non-achievement of performance conditions,
139,840 share options are capable of vesting as of 31 December 2025
(2024: 139,840 share options) and all of these share options were
vested, in accordance with the management’s best estimate, and
exercisable as of 31 December 2025.
On 28 November 2018 the Company granted a further 1,163,040
share options, however due to the performance conditions not being
met none of these share options are capable of vesting.
PARENT COMPANY FINANCIAL STATEMENTS
Notes to the parent company financial statements (continued)
147 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
14. Related party transactions
Related parties of the Company include its direct and indirect
subsidiaries, key management personnel and other entities that are
under the control or significant influence of the key management
personnel.
Accounts receivable from related parties represented by Company’s
subsidiaries as at 31 December 2025 and 31 December 2024
consisted of the following:
In thousands of US Dollars
31 December
2025
31 December
2024
Receivables from Nostrum Oil & Gas
Benefit Trust
23,812 23,812
Receivables from Nostrum Oil & Gas
Coöperatief U.A.
1,575 1,969
25,387 25,781
Less: bad debt allowance (23,778) (23,781)
1,609 2,000
Accounts payable to related parties represented by Company’s
subsidiaries as at 31 December 2025 and 31 December 2024
consisted of the following:
In thousands of US Dollars 31 December
2025
31 December
2024
Payables to Nostrum Oil & Gas
Coöperatief U.A.
34 31
Interest payable Nostrum Oil & Gas
Finance B.V.
205 204
239 235
Financial guarantees are comprised of the following as at 31
December 2025 and 31 December 2024:
In thousands of US Dollars 2025 2024
Financial guarantee as at 1 January 241,239 193,817
Financial guarantee loss 79,989 47,422
Financial guarantee as at 31 December 321,228 241,239
During the years ended 31 December 2025 and 2024 the Company
had the following transactions with related parties represented by
Company’s subsidiaries:
For the year ended 31
December
In thousands of US Dollars 2025 2024
Income from provision of services
Nostrum Oil & Gas Coöperatief U.A. 8,390 5,264
Loss from financial guarantee
Nostrum Oil & Gas Finance B.V. (Note 9) (79,989) (47,422)
15. Financial risk management objectives and policies
The Company’s financial assets consist of receivables from
shareholders and cash and cash equivalents. The Company’s financial
liabilities consist of payables to related parties, trade and other
payables and accrued liabilities.
The main risks arising from the Company’s financial instruments are
foreign exchange risk and credit risk. The Company’s management
reviews and agrees policies for managing each of these risks, which
are summarized below.
Climate change
Management has considered how the Company’s identified climate
risks and climate related goals (as discussed in Climate Change and
GHG Emissions in the Group’s 2025 Annual Report) may impact the
estimation of the recoverable value of cash-generating unit tested for
impairment and therefore of the finance guarantee provision. The
anticipated extent and nature of the future impact of climate on the
Group’s operations and future investment depends on the
development of new technologies and production processes
employed and the level of emissions, energy efficiency and use of
renewable energy. The sensitivity of the Group’s impairment
assessment to these factors is also impacted by the extent that
estimated recoverable value exceeds the carrying value of an
individual cash-generating unit – where this is lower there is an
increased risk of a future impact. The Group is in the process of
identifying a range of actions and initiatives to progress towards the
Group’s goals, including reduction of greenhouse gas emissions,
wastewater discharges and increase of waste utilisation. In certain
cases, the costs of such actions have been quantified and are included
in the Group’s forecasts which are used to estimate recoverable value
for the Group’s cash-generating unit. Other actions and initiatives
continue to be explored by the Group but are not sufficiently certain
to be reflected in the Group’s forecasts of estimated recoverable
value.
Foreign currency risk
Most of the Company’s operation is denominated in USD, therefore
the Company’s statement of financial position is not significantly
affected by exchange rate movements.
Interest rate risk
The Company is not exposed to interest rate risk in 2025 and 2024 as
the Company had no financial instruments with floating rates as at
years ended 31 December 2025 and 2024.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in
raising fundsto meet commitments associated with its financial
liabilities. The
Company is part of the Group’s
monitoring process of
its risk to a shortage of funds using a liquidity planning tool. The tool
allows selecting severe stress test scenarios. To ensure an adequate
level of liquidity a minimum cash balance has been defined as a
cushion of liquid assets. The Group’s objective
is to maintain a balance
between continuity
of funding and flexibility through the use of notes,
export financing and leases, and adequately allocating funding among
various entities in the Group.
After a careful consideration, the Directors confirm that they have a
reasonable expectation that the Company and the Group will
continue in operation as they fall due through the viability assessment
period ending 30 June 2029. For more information on analysis of the
Group’s ability to meet its liabilities please see “Viability statement”
section on the Annual report on pages 27-28.
As of 31 December 2025, the current amount of the financial liabilities
of the Company amounted to US$320,671thousand (31 December
2024: US$1,197 thousand).
The table below summarizes the maturity profile of the Company’s
financial liabilities at 31 December 2025 and 2024 based on
contractual undiscounted payments:
In thousands of
US Dollars
On
dema
nd
Less
than 3
months
3-12
months 1-5 years Total
As at 31 December
2025
Finance guarantee – – 747,128 – 747,128
Trade payables 507 – – – 507
Other current
liabilities
– 95 – – 95
507 95 747,128 – 747,730
Notes to the parent company financial statements (continued)
147 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
14. Related party transactions
Related parties of the Company include its direct and indirect
subsidiaries, key management personnel and other entities that are
under the control or significant influence of the key management
personnel.
Accounts receivable from related parties represented by Company’s
subsidiaries as at 31 December 2025 and 31 December 2024
consisted of the following:
In thousands of US Dollars
31 December
2025
31 December
2024
Receivables from Nostrum Oil & Gas
Benefit Trust
23,812 23,812
Receivables from Nostrum Oil & Gas
Coöperatief U.A.
1,575 1,969
25,387 25,781
Less: bad debt allowance (23,778) (23,781)
1,609 2,000
Accounts payable to related parties represented by Company’s
subsidiaries as at 31 December 2025 and 31 December 2024
consisted of the following:
In thousands of US Dollars 31 December
2025
31 December
2024
Payables to Nostrum Oil & Gas
Coöperatief U.A.
34 31
Interest payable Nostrum Oil & Gas
Finance B.V.
205 204
239 235
Financial guarantees are comprised of the following as at 31
December 2025 and 31 December 2024:
In thousands of US Dollars 2025 2024
Financial guarantee as at 1 January 241,239 193,817
Financial guarantee loss 79,989 47,422
Financial guarantee as at 31 December 321,228 241,239
During the years ended 31 December 2025 and 2024 the Company
had the following transactions with related parties represented by
Company’s subsidiaries:
For the year ended 31
December
In thousands of US Dollars 2025 2024
Income from provision of services
Nostrum Oil & Gas Coöperatief U.A. 8,390 5,264
Loss from financial guarantee
Nostrum Oil & Gas Finance B.V. (Note 9) (79,989) (47,422)
15. Financial risk management objectives and policies
The Company’s financial assets consist of receivables from
shareholders and cash and cash equivalents. The Company’s financial
liabilities consist of payables to related parties, trade and other
payables and accrued liabilities.
The main risks arising from the Company’s financial instruments are
foreign exchange risk and credit risk. The Company’s management
reviews and agrees policies for managing each of these risks, which
are summarized below.
Climate change
Management has considered how the Company’s identified climate
risks and climate related goals (as discussed in Climate Change and
GHG Emissions in the Group’s 2025 Annual Report) may impact the
estimation of the recoverable value of cash-generating unit tested for
impairment and therefore of the finance guarantee provision. The
anticipated extent and nature of the future impact of climate on the
Group’s operations and future investment depends on the
development of new technologies and production processes
employed and the level of emissions, energy efficiency and use of
renewable energy. The sensitivity of the Group’s impairment
assessment to these factors is also impacted by the extent that
estimated recoverable value exceeds the carrying value of an
individual cash-generating unit – where this is lower there is an
increased risk of a future impact. The Group is in the process of
identifying a range of actions and initiatives to progress towards the
Group’s goals, including reduction of greenhouse gas emissions,
wastewater discharges and increase of waste utilisation. In certain
cases, the costs of such actions have been quantified and are included
in the Group’s forecasts which are used to estimate recoverable value
for the Group’s cash-generating unit. Other actions and initiatives
continue to be explored by the Group but are not sufficiently certain
to be reflected in the Group’s forecasts of estimated recoverable
value.
Foreign currency risk
Most of the Company’s operation is denominated in USD, therefore
the Company’s statement of financial position is not significantly
affected by exchange rate movements.
Interest rate risk
The Company is not exposed to interest rate risk in 2025 and 2024 as
the Company had no financial instruments with floating rates as at
years ended 31 December 2025 and 2024.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in
raising funds
export financing and leases, and adequately allocating funding among
various entities in the Group.
After a careful consideration, the Directors confirm that they have a
reasonable expectation that the Company and the Group will
continue in operation as they fall due through the viability assessment
period ending 30 June 2029. For more information on analysis of the
Group’s ability to meet its liabilities please see “Viability statement”
section on the Annual report on pages 27-28.
As of 31 December 2025, the current amount of the financial liabilities
of the Company amounted to US$320,671thousand (31 December
2024: US$1,197 thousand).
The table below summarizes the maturity profile of the Company’s
financial liabilities at 31 December 2025 and 2024 based on
contractual undiscounted payments:
In thousands of
US Dollars
On
dema
nd
Less
than 3
months
3-12
months 1-5 years Total
As at 31 December
2025
Finance guarantee – – 747,128 – 747,128
Trade payables 507 – – – 507
Other current
liabilities
– 95 – – 95
507 95 747,128 – 747,730
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
148
FINANCIAL REPORT
In thousands of
US Dollars
On
dema
nd
Less
than 3
months
3-12
months
1-5 years
Total
As at 31 December
2024
Finance guarantee – – – 688,061 688,061
Trade payables 826 – – – 826
Other current
liabilities
– 146 – – 146
826 146 – 688,061 689,033
Credit risk
Financial instruments, which potentially subject the Company to
credit risk, consist primarily of receivables and cash in banks. The
maximum exposure to credit risk is represented by the carrying
amount of each financial asset. The Company considers that its
maximum exposure is reflected by the amount of receivables from
shareholders and cash and cash equivalents.
The Company places its US Dollar, British Pound and Euro
denominated cash with Citibank which has a credit rating of Aa3
(stable) from Moody’s rating agency at 31 December 2025.
Receivables are amounts receivable from Group companies, thus risk
of credit default is low, except for the loan receivable from the Trust
for which loss allowance has been recognised.
In addition to the direct credit exposures outlined above, the
Company has also acted as a guarantor under the Group’s SSNs and
SUNs. Since the guarantees are issued in favor of the Company’s
indirect subsidiaries, related costs at initial recognition are capitalised
into the investments in subsidiaries. The guarantees could potentially
expose the Company to significant financial strain in the event of the
default of the SSNs and SUNs.
Fair values of financial instruments
The fair value of the financial assets represents the amount at which
the instrument could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale.
The management assessed that its assets and liabilities approximate
their carrying amounts largely due to their nature or the short-term
maturities of these instruments.
Capital management
For the purpose of the Company’s capital management, capital
includes issued capital and all other equity reserves attributable to the
equity holders of the Company. The primary objective of the
Company’s capital management is to maximise the shareholder value.
16. Events after the reporting date
Pending tax disputes
On 17 February 2026, Zhaikmunai LLP received notifications that based on
the results of the meeting of the RoK Ministry of Finance Appeal Board
held on 13 February 2026, the Appeal Board rejected Company's appeal of
the results of 2018 and 2019 tax audits.
Zhaikmunai LLP submitted further appeals to the court of first instance on
these tax audit assessments and preliminary hearings continue as of 16
April 2026. Zhaikmunai LLP and the Nostrum Group are also considering
treaty based remedial alternatives to defend its positions..
On 11 February 2026 Zhaikmunai LLP received the tax audit act for the
repeat 2020 withholding tax audit, the assessment was $11.58 million in
tax and an additional $10.48 million in interest penalties. On 17 March
2026, Zhaikmunai LLP submitted an appeal on the tax audit results to the
Kazakhstan Ministry of Finance Appeal Board. As of the date of
publication of these consolidated financial statements, there have been no
hearings held by the Appeal Board.
The Company continues to monitor developments closely and will
continue to defend its interests and to assess all available legal and treaty-
based remedies.
Second consent fee payment
On 2 January 2026, the Group announced that Nostrum Oil & Gas Finance
B.V. has made the second consent fee payment as set out in the terms of
the previously consummated consent solicitation which shall mean that no
default or event of default is caused by the failure to make the interest
payment on the Notes at this time.
Extension of the maturity of the Notes
On 30 March 2026, the Group announced that it has reached an in
principle agreement with an ad hoc group of beneficial owners of the SSNs
and the SUNs regarding the key commercial terms for a proposed
extension of the maturity date of the SSNs and the SUNs to 31 December
2030. For more details please see Note 1.
Geopolitical Security and Oil price Developments
The armed conflict involving Iran, Israel, and the United States escalated in
early 2026 following the outbreak of wider hostilities on 28 February 2026.
These developments have increased volatility in global energy markets and
disrupted a significant portion of global oil and LNG transit through the
straight of Hormuz. These disruptions did not affect the Group’s sales and
logistics of its hydrocarbons.
Accordingly, international oil markets have remained volatile. Benchmark
crude oil prices, including Brent crude oil, experienced fluctuations driven
by ongoing geopolitical tensions, OPEC+ production decisions, and
uncertainty in the global economic outlook. Benchmark crude oil prices,
including Brent crude oil, have fluctuated between US$73/bbl to
US$120/bbl during the period from 1 January 2026 to the date of approval
of these consolidated financial statements. These in turn, had a positive
impact on the Group’s revenues from products which are sold with Brent-
based pricing.
Effect on the Financial Statements
In accordance with IAS 10 Events after the Reporting Period, management
has assessed the developments described above and concluded that all of
them represent non-adjusting events, as they relate to conditions arising
after the reporting date. Accordingly, no adjustments have been made to
the recognition or measurement of items in these consolidated financial
statements as at 31 December 2025, including assets, liabilities, equity,
income, expenses, and cash flows.
FINANCIAL REPORT
As at 31 December
2024
Finance guarantee – – – 688,061 688,061
Trade payables 826 – – – 826
Other current
liabilities
– 146 – – 146
826 146 – 688,061 689,033
Credit risk
Financial instruments, which potentially subject the Company to
credit risk, consist primarily of receivables and cash in banks. The
maximum exposure to credit risk is represented by the carrying
amount of each financial asset. The Company considers that its
maximum exposure is reflected by the amount of receivables from
shareholders and cash and cash equivalents.
The Company places its US Dollar, British Pound and Euro
denominated cash with Citibank which has a credit rating of Aa3
(stable) from Moody’s rating agency at 31 December 2025.
Receivables are amounts receivable from Group companies, thus risk
of credit default is low, except for the loan receivable from the Trust
for which loss allowance has been recognised.
In addition to the direct credit exposures outlined above, the
Company has also acted as a guarantor under the Group’s SSNs and
SUNs. Since the guarantees are issued in favor of the Company’s
indirect subsidiaries, related costs at initial recognition are capitalised
into the investments in subsidiaries. The guarantees could potentially
expose the Company to significant financial strain in the event of the
default of the SSNs and SUNs.
Fair values of financial instruments
The fair value of the financial assets represents the amount at which
the instrument could be exchanged in a current transaction between
willing parties, other than in a forced or liquidation sale.
The management assessed that its assets and liabilities approximate
their carrying amounts largely due to their nature or the short-term
maturities of these instruments.
Capital management
For the purpose of the Company’s capital management, capital
includes issued capital and all other equity reserves attributable to the
equity holders of the Company. The primary objective of the
Company’s capital management is to maximise the shareholder value.
16. Events after the reporting date
Pending tax disputes
On 17 February 2026, Zhaikmunai LLP received notifications that based on
the results of the meeting of the RoK Ministry of Finance Appeal Board
held on 13 February 2026, the Appeal Board rejected Company's appeal of
the results of 2018 and 2019 tax audits.
Zhaikmunai LLP submitted further appeals to the court of first instance on
these tax audit assessments and preliminary hearings continue as of 16
April 2026. Zhaikmunai LLP and the Nostrum Group are also considering
treaty based remedial alternatives to defend its positions..
On 11 February 2026 Zhaikmunai LLP received the tax audit act for the
repeat 2020 withholding tax audit, the assessment was $11.58 million in
tax and an additional $10.48 million in interest penalties. On 17 March
2026, Zhaikmunai LLP submitted an appeal on the tax audit results to the
Kazakhstan Ministry of Finance Appeal Board. As of the date of
publication of these consolidated financial statements, there have been no
hearings held by the Appeal Board.
The Company continues to monitor developments closely and will
continue to defend its interests and to assess all available legal and treaty-
based remedies.
Second consent fee payment
On 2 January 2026, the Group announced that Nostrum Oil & Gas Finance
B.V. has made the second consent fee payment as set out in the terms of
the previously consummated consent solicitation which shall mean that no
default or event of default is caused by the failure to make the interest
payment on the Notes at this time.
Extension of the maturity of the Notes
On 30 March 2026, the Group announced that it has reached an in
principle agreement with an ad hoc group of beneficial owners of the SSNs
and the SUNs regarding the key commercial terms for a proposed
extension of the maturity date of the SSNs and the SUNs to 31 December
2030. For more details please see Note 1.
Geopolitical Security and Oil price Developments
The armed conflict involving Iran, Israel, and the United States escalated in
early 2026 following the outbreak of wider hostilities on 28 February 2026.
These developments have increased volatility in global energy markets and
disrupted a significant portion of global oil and LNG transit through the
straight of Hormuz. These disruptions did not affect the Group’s sales and
logistics of its hydrocarbons.
Accordingly, international oil markets have remained volatile. Benchmark
crude oil prices, including Brent crude oil, experienced fluctuations driven
by ongoing geopolitical tensions, OPEC+ production decisions, and
uncertainty in the global economic outlook. Benchmark crude oil prices,
including Brent crude oil, have fluctuated between US$73/bbl to
US$120/bbl during the period from 1 January 2026 to the date of approval
of these consolidated financial statements. These in turn, had a positive
impact on the Group’s revenues from products which are sold with Brent-
based pricing.
Effect on the Financial Statements
In accordance with IAS 10 Events after the Reporting Period, management
has assessed the developments described above and concluded that all of
them represent non-adjusting events, as they relate to conditions arising
after the reporting date. Accordingly, no adjustments have been made to
the recognition or measurement of items in these consolidated financial
statements as at 31 December 2025, including assets, liabilities, equity,
income, expenses, and cash flows.
149
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
INVESTOR INFORMATION
Contact information
Investor contacts
Investor Relations
ir@nog.co.uk
Tel: +44 20 3740 7430
Registered office
Nostrum Oil & Gas PLC
20 Eastbourne Terrace
London W2 6LG
United Kingdom
Tel: +44 20 3740 7430
Registered number: 8717287
Place of registration: England and Wales
VAT GB302 9250 35
Zhaikmunai LLP registered office
Zhaikmunai LLP
43/1 Alexander Karev Street
Uralsk, 090000
Republic of Kazakhstan
Tel: +7 7112 933900
Fax: +7 7112 933901
Auditor
RPG Crouch Chapman LLP
40 Gracechurch Street
London
EC3V 0BT
United Kingdom
Registrar
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds LS1 4DL
United Kingdom
Tel: +44 371 664 0391
Nostrum Oil & Gas BV
Activity: Holding Company
Registered office and principal place of
business:
Anna van Buerenplein 41
Unit nr. 4.09A
2595 DA ‘s-Gravenhage
The Netherlands
Directors:
Thomas Hartnett
Ulugbek Makhmadiyarov
Nostrum Oil & Gas Coöperatief UA
Activity: Holding Company
Registered office and principal place of
business:
Anna van Buerenplein 41
Unit nr. 4.09A
2595 DA ‘s-Gravenhage
The Netherlands
Directors:
Ulugbek Makhmadiyarov
Thomas Hartnett
Nostrum Oil & Gas Finance BV
Activity: Finance Company
Registered office and principal place of
business:
Anna van Buerenplein 41
Unit nr. 4.09A
2595 DA ‘s-Gravenhage
The Netherlands
Directors:
Ulugbek Makhmadiyarov
Thomas Hartnett
Nostrum Services NV
Activity: Service company
Registered office and principal place of
business:
Chaussée de Wavre 20
1360 Perwez
Belgium
Directors:
Thomas Hartnett BV
Ulugbek Makhmadiyarov
Nostrum Associated Investments LLP
Activity: Dormant
Registered office and principal place of
business:
43B Karev Street
090000 Uralsk
Republic of Kazakhstan
General Director:
Malika Saudasheva
Nostrum Services Central Asia LLP
Activity: Service company
Registered office and principal place of
business:
Building 75/38
Microrayon Aksay 3a
050031 Almaty
Republic of Kazakhstan
General Director:
Michael Wagner
Nostrum Oil & Gas Holding Limited
Activity: Holding company
Registered office and principal place of
business:
20 Eastbourne Terrace
London W2 6LG
United Kingdom
Directors:
Ulugbek Makhmadiyarov
Thomas Hartnett
Positiv Invest LLP
Activity: Operating company
Registered office and principal place of
business:
43/1 Alexander Karev Street
Uralsk, 090000
Republic of Kazakhstan
General Director:
Damir Bastaubayev
Midstream Energy Company LLC
Activity: Dormant
Registered office and principal place of
business:
43B Alexander Karev Street
Uralsk, 090000
Republic of Kazakhstan
General Director:
Damir Bastaubayev
INVESTOR INFORMATION
Contact information
Investor contacts
Investor Relations
ir@nog.co.uk
Tel: +44 20 3740 7430
Registered office
Nostrum Oil & Gas PLC
20 Eastbourne Terrace
London W2 6LG
United Kingdom
Tel: +44 20 3740 7430
Registered number: 8717287
Place of registration: England and Wales
VAT GB302 9250 35
Zhaikmunai LLP registered office
Zhaikmunai LLP
43/1 Alexander Karev Street
Uralsk, 090000
Republic of Kazakhstan
Tel: +7 7112 933900
Fax: +7 7112 933901
Auditor
RPG Crouch Chapman LLP
40 Gracechurch Street
London
EC3V 0BT
United Kingdom
Registrar
MUFG Corporate Markets
Central Square
29 Wellington Street
Leeds LS1 4DL
United Kingdom
Tel: +44 371 664 0391
Nostrum Oil & Gas BV
Activity: Holding Company
Registered office and principal place of
business:
Anna van Buerenplein 41
Unit nr. 4.09A
2595 DA ‘s-Gravenhage
The Netherlands
Directors:
Thomas Hartnett
Ulugbek Makhmadiyarov
Nostrum Oil & Gas Coöperatief UA
Activity: Holding Company
Registered office and principal place of
business:
Anna van Buerenplein 41
Unit nr. 4.09A
2595 DA ‘s-Gravenhage
The Netherlands
Directors:
Ulugbek Makhmadiyarov
Thomas Hartnett
Nostrum Oil & Gas Finance BV
Activity: Finance Company
Registered office and principal place of
business:
Anna van Buerenplein 41
Unit nr. 4.09A
2595 DA ‘s-Gravenhage
The Netherlands
Directors:
Ulugbek Makhmadiyarov
Thomas Hartnett
Nostrum Services NV
Activity: Service company
Registered office and principal place of
business:
Chaussée de Wavre 20
1360 Perwez
Belgium
Directors:
Thomas Hartnett BV
Ulugbek Makhmadiyarov
Nostrum Associated Investments LLP
Activity: Dormant
Registered office and principal place of
business:
43B Karev Street
090000 Uralsk
Republic of Kazakhstan
General Director:
Malika Saudasheva
Nostrum Services Central Asia LLP
Activity: Service company
Registered office and principal place of
business:
Building 75/38
Microrayon Aksay 3a
050031 Almaty
Republic of Kazakhstan
General Director:
Michael Wagner
Nostrum Oil & Gas Holding Limited
Activity: Holding company
Registered office and principal place of
business:
20 Eastbourne Terrace
London W2 6LG
United Kingdom
Directors:
Ulugbek Makhmadiyarov
Thomas Hartnett
Positiv Invest LLP
Activity: Operating company
Registered office and principal place of
business:
43/1 Alexander Karev Street
Uralsk, 090000
Republic of Kazakhstan
General Director:
Damir Bastaubayev
Midstream Energy Company LLC
Activity: Dormant
Registered office and principal place of
business:
43B Alexander Karev Street
Uralsk, 090000
Republic of Kazakhstan
General Director:
Damir Bastaubayev
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
150
REGULATORY INFORMATION
Website and electronic communications details
Nostrum’s website provides information on the activities of the
Company, both regulatory and other, as well as the opportunity to
sign up to our mailing list to ensure stakeholders are kept up to date
with the most recent information. Please see www.nog.co.uk for
more information.
In addition, to reduce our impact on the environment, we encourage
all shareholders to opt for electronic shareholder communications,
including annual reports and notices of meetings.
Share price information
Exchange: London Stock Exchange
Ticker: NOG.LN
Reuters code: NOGN.L
ISIN code: GB00BQVVS097
Capitalisation-weighted index of FTSE 350 E&P.
Earnings per share (as at 31 December 2025): US$(0.87) negative per
share.
Book value per share (as at 31 December 2025): US$(1.43) negative
per share.
Financial calendar 2026
26 May 2026: Q1 2026 Operational and Financial results.
25 August 2026: H1 2026 Operational and Financial results.
24 November 2026: Q3 2026 Operational and Financial results.
Share price performance
Equity financing
Equity raising: IPO
Timing: March 2008
Amount: US$100m
Lead manager: ING Bank NB
Equity raising: Secondary equity issue
Timing: September 2009
Amount: US$300m
Lead manager: ING Bank NV Mirabaud Securities Renaissance
Securities
Nostrum Oil & Gas PLC
Debt financing
Outstanding bond issues as at 31 December 2025 for Nostrum Oil & Gas PLC are detailed in the following table 1 :
Title Settlement Maturity Currency Amount
(m)
Coupon PIK Listing RegS Rule 144A
SSN Feb 2003 Jun 2026 US$ 250 5.000% — TISE CUSIP
ISIN
N64884AF1
USN64884AF16
66978CAF9
US66978CAF95
SUN Feb 2003 Jun 2026 US$ 300 1.000% 13.000% TISE CUSIP
ISIN
N64884AE4
USN64884AE41
66978CAD4
US66978CAD48
1. The following cancellations took place on 7 April 2025:
USN64884AF16 5,471,000.00
USN64884AE41 9,354,487.00
US66978CAF95 157,000.00
US66978CAD48 275,349.00
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Sep-25 Oct-25 Nov-25 Dec-25
Price (GBP)
REGULATORY INFORMATION
Website and electronic communications details
Nostrum’s website provides information on the activities of the
Company, both regulatory and other, as well as the opportunity to
sign up to our mailing list to ensure stakeholders are kept up to date
with the most recent information. Please see www.nog.co.uk for
more information.
In addition, to reduce our impact on the environment, we encourage
all shareholders to opt for electronic shareholder communications,
including annual reports and notices of meetings.
Share price information
Exchange: London Stock Exchange
Ticker: NOG.LN
Reuters code: NOGN.L
ISIN code: GB00BQVVS097
Capitalisation-weighted index of FTSE 350 E&P.
Earnings per share (as at 31 December 2025): US$(0.87) negative per
share.
Book value per share (as at 31 December 2025): US$(1.43) negative
per share.
Financial calendar 2026
26 May 2026: Q1 2026 Operational and Financial results.
25 August 2026: H1 2026 Operational and Financial results.
24 November 2026: Q3 2026 Operational and Financial results.
Share price performance
Equity financing
Equity raising: IPO
Timing: March 2008
Amount: US$100m
Lead manager: ING Bank NB
Equity raising: Secondary equity issue
Timing: September 2009
Amount: US$300m
Lead manager: ING Bank NV Mirabaud Securities Renaissance
Securities
Nostrum Oil & Gas PLC
Debt financing
Outstanding bond issues as at 31 December 2025 for Nostrum Oil & Gas PLC are detailed in the following table 1 :
Title Settlement Maturity Currency Amount
(m)
Coupon PIK Listing RegS Rule 144A
SSN Feb 2003 Jun 2026 US$ 250 5.000% — TISE CUSIP
ISIN
N64884AF1
USN64884AF16
66978CAF9
US66978CAF95
SUN Feb 2003 Jun 2026 US$ 300 1.000% 13.000% TISE CUSIP
ISIN
N64884AE4
USN64884AE41
66978CAD4
US66978CAD48
1. The following cancellations took place on 7 April 2025:
USN64884AF16 5,471,000.00
USN64884AE41 9,354,487.00
US66978CAF95 157,000.00
US66978CAD48 275,349.00
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Sep-25 Oct-25 Nov-25 Dec-25
Price (GBP)
INVESTOR INFORMATION
151 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Internally held bond financing of the Nostrum Group
Bond issues wholly owned by Nostrum Oil & Gas Finance BV as at 31 December 2025 are provided in the following table:
Settlement Maturity Currency Amount (m) Coupon Listing RegS Rule 144A
Nov 2012 Jun 2033 US$ 560 9.5% Dublin/
Almaty
CUSIP
ISIN
Common
Code
N97716AA7
USN97716AA72
085313177
98953VAA0
US98953VAA08
085259776
Zhaikmunai LLP is a wholly-owned indirect subsidiary of Nostrum and its equity is not listed, while Nostrum’s equity is listed on the standard
segment of the London Stock Exchange.
The Group’s investor relations programme aims to develop open and transparent communication between the Group (including Zhaikmunai LLP)
and its shareholders, providing information about the financial and operational performance of the Company. The Investor Relations department
of the Group seeks to ensure all questions received from any of the Group’s stakeholders are dealt with in a timely manner based on the
underlying principle that the Group is approachable and responsive to any potential queries.
Nostrum Finance BV 5.0% - 30 June 2026 Nostrum Finance BV 14.0% - 30 June 2026
16.5
17.0
17.5
18.0
18.5
19.0
19.5
20.0
Jan-25 Feb-25 Apr-25 May-25 Jul-25 Sep-25 Oct-25 Dec-25
Price
45.0
45.5
46.0
46.5
47.0
47.5
48.0
48.5
49.0
49.5
50.0
Apr-25 May-25 Jul-25 Aug-25 Oct-25 Dec-25
Price
151 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
Internally held bond financing of the Nostrum Group
Bond issues wholly owned by Nostrum Oil & Gas Finance BV as at 31 December 2025 are provided in the following table:
Settlement Maturity Currency Amount (m) Coupon Listing RegS Rule 144A
Nov 2012 Jun 2033 US$ 560 9.5% Dublin/
Almaty
CUSIP
ISIN
Common
Code
N97716AA7
USN97716AA72
085313177
98953VAA0
US98953VAA08
085259776
Zhaikmunai LLP is a wholly-owned indirect subsidiary of Nostrum and its equity is not listed, while Nostrum’s equity is listed on the standard
segment of the London Stock Exchange.
The Group’s investor relations programme aims to develop open and transparent communication between the Group (including Zhaikmunai LLP)
and its shareholders, providing information about the financial and operational performance of the Company. The Investor Relations department
of the Group seeks to ensure all questions received from any of the Group’s stakeholders are dealt with in a timely manner based on the
underlying principle that the Group is approachable and responsive to any potential queries.
Nostrum Finance BV 5.0% - 30 June 2026 Nostrum Finance BV 14.0% - 30 June 2026
16.5
17.0
17.5
18.0
18.5
19.0
19.5
20.0
Jan-25 Feb-25 Apr-25 May-25 Jul-25 Sep-25 Oct-25 Dec-25
Price
45.0
45.5
46.0
46.5
47.0
47.5
48.0
48.5
49.0
49.5
50.0
Apr-25 May-25 Jul-25 Aug-25 Oct-25 Dec-25
Price
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
152
REGULATORY INFORMATION
GLOSSARY
2010 Notes 10.500% notes issued in 2010.
2012 Notes 7.125% notes issued in 2012.
2014 Notes 6.375% notes issued in 2014.
2017 Notes 8.000% notes issued in 2017.
2018 Notes 7.000% notes issued in 2018.
A
API American Petroleum Institute.
API gravity The industry standard method of expressing specific density of crude oil or other liquid hydrocarbons as
recommended by the American Petroleum Institute. Higher API gravities mean lower specific gravity and
lighter oils. When the API gravity is greater than 10, the product is lighter and floats on water; when it is less
than 10, it is heavier than water and sinks. Generally speaking, oil with an API gravity between 40 and 45
commands the highest prices.
appraisal well A well or wells drilled to follow up a discovery and evaluate its commercial potential.
associated gas Gas, which occurs in crude oil reservoirs in a gaseous state.
B
barrel/bbl The standard unit of volume: 1 barrel = 159 litres or 42 US gallons.
Basin A large area holding a thick accumulation of sedimentary rock.
Bcm Billion cubic metres.
Boe Barrels of (crude) oil equivalent, i.e. the factor used by Nostrum to convert volumes of different hydrocarbon
production to barrels of oil equivalent.
Boepd Barrels of (crude) oil equivalent per day.
Bopd Barrels of crude oil per day.
C
C1 Methane.
C2 Ethane.
C3 Propane.
C4 Butane.
C5 Pentane.
C6 Hexane.
C7 Heptane.
CAC A pipeline with two branches originating in Turkmenistan and meeting in Kazakhstan before crossing into
Russia and connecting to the Russian pipeline system, with an annual throughput capacity of 60.2 billion cubic
metres.
Cash Cash and cash equivalents, including current and non-current investments.
Casing Relatively thin-walled, large diameter steel rods that are screwed together to form a casing string, which is run
into a core hole or well and cemented in place.
Caspian region Parts of countries adjacent to the Caspian Sea.
CDP CDP is an organisation based in the United Kingdom which supports companies in disclosing their
environmental impact (formerly known as the Carbon Disclosure Project).
Chinarevskoye field The Chinarevskoye oil and gas condensate field.
CO 2 Carbon dioxide.
commissioning Process to assure a facility or plant, such as Nostrum’s GTU 3, is tested to verify it functions according to
technical objectives and specifications before use.
Competent Authority The State’s central executive agency, designated by the Government to act on behalf of the State to exercise
rights relating to the execution and performance of subsoil use contracts, except for contracts for exploration
and production of commonly occurring minerals. This is the Ministry of Energy of the Republic of Kazakhstan
(“MOE”) with respect to the oil and gas industry.
condensate Hydrocarbons which are gaseous in a reservoir, but which condense to form a liquid as they rise to the surface
where the pressure is much less
REGULATORY INFORMATION
GLOSSARY
2010 Notes 10.500% notes issued in 2010.
2012 Notes 7.125% notes issued in 2012.
2014 Notes 6.375% notes issued in 2014.
2017 Notes 8.000% notes issued in 2017.
2018 Notes 7.000% notes issued in 2018.
A
API American Petroleum Institute.
API gravity The industry standard method of expressing specific density of crude oil or other liquid hydrocarbons as
recommended by the American Petroleum Institute. Higher API gravities mean lower specific gravity and
lighter oils. When the API gravity is greater than 10, the product is lighter and floats on water; when it is less
than 10, it is heavier than water and sinks. Generally speaking, oil with an API gravity between 40 and 45
commands the highest prices.
appraisal well A well or wells drilled to follow up a discovery and evaluate its commercial potential.
associated gas Gas, which occurs in crude oil reservoirs in a gaseous state.
B
barrel/bbl The standard unit of volume: 1 barrel = 159 litres or 42 US gallons.
Basin A large area holding a thick accumulation of sedimentary rock.
Bcm Billion cubic metres.
Boe Barrels of (crude) oil equivalent, i.e. the factor used by Nostrum to convert volumes of different hydrocarbon
production to barrels of oil equivalent.
Boepd Barrels of (crude) oil equivalent per day.
Bopd Barrels of crude oil per day.
C
C1 Methane.
C2 Ethane.
C3 Propane.
C4 Butane.
C5 Pentane.
C6 Hexane.
C7 Heptane.
CAC A pipeline with two branches originating in Turkmenistan and meeting in Kazakhstan before crossing into
Russia and connecting to the Russian pipeline system, with an annual throughput capacity of 60.2 billion cubic
metres.
Cash Cash and cash equivalents, including current and non-current investments.
Casing Relatively thin-walled, large diameter steel rods that are screwed together to form a casing string, which is run
into a core hole or well and cemented in place.
Caspian region Parts of countries adjacent to the Caspian Sea.
CDP CDP is an organisation based in the United Kingdom which supports companies in disclosing their
environmental impact (formerly known as the Carbon Disclosure Project).
Chinarevskoye field The Chinarevskoye oil and gas condensate field.
CO 2 Carbon dioxide.
commissioning Process to assure a facility or plant, such as Nostrum’s GTU 3, is tested to verify it functions according to
technical objectives and specifications before use.
Competent Authority The State’s central executive agency, designated by the Government to act on behalf of the State to exercise
rights relating to the execution and performance of subsoil use contracts, except for contracts for exploration
and production of commonly occurring minerals. This is the Ministry of Energy of the Republic of Kazakhstan
(“MOE”) with respect to the oil and gas industry.
condensate Hydrocarbons which are gaseous in a reservoir, but which condense to form a liquid as they rise to the surface
where the pressure is much less
GLOSSARY
153 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
contingent resources Deposits that are estimated, on a given date, to be potentially recoverable from known accumulations but
that are not currently considered commercially recoverable.
cost oil Cost oil denotes an amount of crude oil produced in respect of which the market value is equal to Nostrum’s
monthly expenses that may be deducted pursuant to the PSA (q.v.) (including all operating costs, exploration
costs and development costs up to an annual maximum of 90% of the annual gross realised value of
hydrocarbon production).
crude oil A mixture of liquid hydrocarbons of different molecular weights.
D
development During development, engineering teams design the most efficient development options to build wells and
associated infrastructure to produce hydrocarbons from a gas field within a proven productive reservoir (as
defined by exploration and appraisal activities). The three phases of development are exploration and
appraisal, development and production.
downstream Downstream refers to all petroleum operations occurring after delivery of crude oil or gas to a refinery or
fractionation plant.
Development Plans The development plans approved by the SCFD in March 2009.
Directors or Board The Directors of the Company.
dry gas Dry gas is natural gas (methane and ethane) with no significant content of heavier hydrocarbons. It is gaseous
at both sub-surface and surface conditions.
E
E&P Exploration and production.
EBITDA Profit before tax + non-recurring expenses + finance costs + foreign exchange loss /(gain) + employee share
option adjustments + depreciation – interest income + other expenses / (income).
Environmental Code The Kazakhstan Environment Code (No. 212, dated 9 January 2007, as amended).
Exploration Permit The geological allotment (Annex to the Licence) issued by the Competent Authority to Zhaikmunai LLP.
exploration phase The phase of operations which covers the search for oil or gas by carrying out detailed geological and
geophysical surveys, followed up where appropriate by exploratory drilling.
exploration well Well drilled purely for exploratory (information-gathering) purposes in a particular area.
F
farm-in Transfer of a percentage of an oil or gas permit held by the farmor in return for (partial or complete) delivery
of the work programme by the farmee(s). Note that this work would normally have had to have been
delivered and paid for by the farmor.
farm-out A contractual agreement with the holder of an oil and gas permit to assign all (or a percentage of) that interest
to another party in exchange for delivering the work programme required by the permit, or fulfilling other
contractually specified conditions.
FCA Financial Conduct Authority of the United Kingdom.
FCA Uralsk Sales made under free carrier terms according to which Nostrum delivers to the terminal in Uralsk and
transportation risk and risk of loss are transferred to the buyer after delivery to the carrier.
field An area consisting of a single reservoir or multiple reservoirs all grouped in or related to the same individual
geological structure feature and/or stratigraphic condition.
FOB Sales made under “free on board” terms.
FSU Former Soviet Union.
FY 2024 Twelve months ended 31 December 2024.
FY 2025 Twelve months ended 31 December 2025.
G
G&A General and administrative expenses.
G&A expenses calculated as “General and administrative expenses” as presented in the financial statements excluding
Depreciation and amortisation.
gas Petroleum that consists principally of light hydrocarbons. It can be divided into lean gas, primarily methane,
but often containing some ethane and smaller quantities of heavier hydrocarbons (also called sales gas), and
wet gas, primarily ethane, propane and butane, as well as smaller amounts of heavier hydrocarbons; partially
liquid under atmospheric pressure.
gas condensate The mixture of liquid hydrocarbons that results from condensation of petroleum hydrocarbons existing initially
in a gaseous phase in an underground reservoir.
153 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
contingent resources Deposits that are estimated, on a given date, to be potentially recoverable from known accumulations but
that are not currently considered commercially recoverable.
cost oil Cost oil denotes an amount of crude oil produced in respect of which the market value is equal to Nostrum’s
monthly expenses that may be deducted pursuant to the PSA (q.v.) (including all operating costs, exploration
costs and development costs up to an annual maximum of 90% of the annual gross realised value of
hydrocarbon production).
crude oil A mixture of liquid hydrocarbons of different molecular weights.
D
development During development, engineering teams design the most efficient development options to build wells and
associated infrastructure to produce hydrocarbons from a gas field within a proven productive reservoir (as
defined by exploration and appraisal activities). The three phases of development are exploration and
appraisal, development and production.
downstream Downstream refers to all petroleum operations occurring after delivery of crude oil or gas to a refinery or
fractionation plant.
Development Plans The development plans approved by the SCFD in March 2009.
Directors or Board The Directors of the Company.
dry gas Dry gas is natural gas (methane and ethane) with no significant content of heavier hydrocarbons. It is gaseous
at both sub-surface and surface conditions.
E
E&P Exploration and production.
EBITDA Profit before tax + non-recurring expenses + finance costs + foreign exchange loss /(gain) + employee share
option adjustments + depreciation – interest income + other expenses / (income).
Environmental Code The Kazakhstan Environment Code (No. 212, dated 9 January 2007, as amended).
Exploration Permit The geological allotment (Annex to the Licence) issued by the Competent Authority to Zhaikmunai LLP.
exploration phase The phase of operations which covers the search for oil or gas by carrying out detailed geological and
geophysical surveys, followed up where appropriate by exploratory drilling.
exploration well Well drilled purely for exploratory (information-gathering) purposes in a particular area.
F
farm-in Transfer of a percentage of an oil or gas permit held by the farmor in return for (partial or complete) delivery
of the work programme by the farmee(s). Note that this work would normally have had to have been
delivered and paid for by the farmor.
farm-out A contractual agreement with the holder of an oil and gas permit to assign all (or a percentage of) that interest
to another party in exchange for delivering the work programme required by the permit, or fulfilling other
contractually specified conditions.
FCA Financial Conduct Authority of the United Kingdom.
FCA Uralsk Sales made under free carrier terms according to which Nostrum delivers to the terminal in Uralsk and
transportation risk and risk of loss are transferred to the buyer after delivery to the carrier.
field An area consisting of a single reservoir or multiple reservoirs all grouped in or related to the same individual
geological structure feature and/or stratigraphic condition.
FOB Sales made under “free on board” terms.
FSU Former Soviet Union.
FY 2024 Twelve months ended 31 December 2024.
FY 2025 Twelve months ended 31 December 2025.
G
G&A General and administrative expenses.
G&A expenses calculated as “General and administrative expenses” as presented in the financial statements excluding
Depreciation and amortisation.
gas Petroleum that consists principally of light hydrocarbons. It can be divided into lean gas, primarily methane,
but often containing some ethane and smaller quantities of heavier hydrocarbons (also called sales gas), and
wet gas, primarily ethane, propane and butane, as well as smaller amounts of heavier hydrocarbons; partially
liquid under atmospheric pressure.
gas condensate The mixture of liquid hydrocarbons that results from condensation of petroleum hydrocarbons existing initially
in a gaseous phase in an underground reservoir.
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
154
REGULATORY INFORMATION
Gas Treatment Facility
(GTF)
Facility for the treatment of associated gas and gas condensate resulting in different products (stabilised
condensate, LPG and dry gas) for commercial sales.
GTU 1 means the first unit of Nostrum’s Gas Treatment Facility.
GTU 2 means the second unit of Nostrum’s Gas Treatment Facility.
GTU 3 means the third unit of Nostrum’s Gas Treatment Facility.
GDRs The global depository receipts of Nostrum Oil & Gas LP.
greenhouse gas A gas that contributes to the greenhouse effect by absorbing infrared radiation, e.g. carbon dioxide.
Group or Company or
Nostrum
Nostrum Oil & Gas PLC and, as the context requires, its direct and indirect consolidated subsidiaries.
H
HSE Health, safety and environment.
hydrocarbons Compounds formed from the elements hydrogen (H) and carbon (C), which may be in solid, liquid or gaseous
form.
hydrocarbon reserves Hydrocarbon reserves that have been proved, and are referred to as 3P, 2P and 1P depending on the
likelihood of commercial production from a given field.
I
IAS International Accounting Standards.
IFRS International Financial Reporting Standards.
INED Independent Non-Executive Director.
IPIECA International Petroleum Industry Environmental Conservation Association.
J
joint venture A joint venture is a set of trading entities who have agreed to act in concert to share the cost and rewards of
exploring for and producing oil or gas from a permit.
joule Unit of energy used for measuring gas volumes.
megajoules = 106
gigajoules = 109
terrajoules = 1,012
petajoules = 1,015
K
KASE Kazakhstan Stock Exchange.
Kazakhstan The Republic of Kazakhstan.
KazMunaiGas State-owned oil and gas company of Kazakhstan.
KazMunaiGas Exploration
Production (“KMG EP”)
Onshore oil and gas exploration production subsidiary of KazMunaiGas.
KazTransOil (KTO) pipeline A tie-in to the KTO pipeline enables crude oil export sales via the Atyrau-Samara international export pipeline.
KEBCO Kazakhstan Export Blend Crude Oil
L
Licence Licence series MG No. 253-D (Oil) issued to Zhaikmunai LLP by the Government on 26 May 1997, including
amendments.
Licensing Law The Kazakhstan Law “On Licensing” (No. 214, dated 11 January 2007, as amended, which came into effect on 9
August 2007).
liquids A sales product in liquid form produced as a result of further processing by the onshore plant; for example,
condensate and LPG.
LNG Liquefied natural gas. Comprises mainly methane.
Listing Rules The listing rules made by the Financial Services Authority (FSA) under section 73A of the FSMA.
LSE London Stock Exchange.
LPG Liquefied petroleum gas, the name given to the mix of propane and butane in its liquid state.
LTIP Long-term incentive plan.
M
m Metre(s).
m3 Cubic metres.
REGULATORY INFORMATION
Gas Treatment Facility
(GTF)
Facility for the treatment of associated gas and gas condensate resulting in different products (stabilised
condensate, LPG and dry gas) for commercial sales.
GTU 1 means the first unit of Nostrum’s Gas Treatment Facility.
GTU 2 means the second unit of Nostrum’s Gas Treatment Facility.
GTU 3 means the third unit of Nostrum’s Gas Treatment Facility.
GDRs The global depository receipts of Nostrum Oil & Gas LP.
greenhouse gas A gas that contributes to the greenhouse effect by absorbing infrared radiation, e.g. carbon dioxide.
Group or Company or
Nostrum
Nostrum Oil & Gas PLC and, as the context requires, its direct and indirect consolidated subsidiaries.
H
HSE Health, safety and environment.
hydrocarbons Compounds formed from the elements hydrogen (H) and carbon (C), which may be in solid, liquid or gaseous
form.
hydrocarbon reserves Hydrocarbon reserves that have been proved, and are referred to as 3P, 2P and 1P depending on the
likelihood of commercial production from a given field.
I
IAS International Accounting Standards.
IFRS International Financial Reporting Standards.
INED Independent Non-Executive Director.
IPIECA International Petroleum Industry Environmental Conservation Association.
J
joint venture A joint venture is a set of trading entities who have agreed to act in concert to share the cost and rewards of
exploring for and producing oil or gas from a permit.
joule Unit of energy used for measuring gas volumes.
megajoules = 106
gigajoules = 109
terrajoules = 1,012
petajoules = 1,015
K
KASE Kazakhstan Stock Exchange.
Kazakhstan The Republic of Kazakhstan.
KazMunaiGas State-owned oil and gas company of Kazakhstan.
KazMunaiGas Exploration
Production (“KMG EP”)
Onshore oil and gas exploration production subsidiary of KazMunaiGas.
KazTransOil (KTO) pipeline A tie-in to the KTO pipeline enables crude oil export sales via the Atyrau-Samara international export pipeline.
KEBCO Kazakhstan Export Blend Crude Oil
L
Licence Licence series MG No. 253-D (Oil) issued to Zhaikmunai LLP by the Government on 26 May 1997, including
amendments.
Licensing Law The Kazakhstan Law “On Licensing” (No. 214, dated 11 January 2007, as amended, which came into effect on 9
August 2007).
liquids A sales product in liquid form produced as a result of further processing by the onshore plant; for example,
condensate and LPG.
LNG Liquefied natural gas. Comprises mainly methane.
Listing Rules The listing rules made by the Financial Services Authority (FSA) under section 73A of the FSMA.
LSE London Stock Exchange.
LPG Liquefied petroleum gas, the name given to the mix of propane and butane in its liquid state.
LTIP Long-term incentive plan.
M
m Metre(s).
m3 Cubic metres.
GLOSSARY
155 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
m3/d Cubic metres per day.
Man –hour An hour regarded in terms of the amount of work that can be done by one person within this period.
Mboe Thousands of barrels of oil equivalent.
Mechanical completion Final construction or installation phase, after which a facility can undergo commissioning activities.
Mmbbls Millions of barrels of oil.
Mmboe Millions of barrels of oil equivalent.
Mmcf Million cubic feet.
N
NBK National Bank of Kazakhstan.
NED Non-Executive Director.
Netback calculated as Revenue less Selling and Transportation expenses, Taxes other than income tax (all three as
presented in the financial statements) and cost of raw gas purchased.
Nostrum Nostrum Oil & Gas PLC, the listed company of the Group.
Nostrum Oil & Gas PLC Registered Office:
20 Eastbourne Terrace
London
W2 6LG
United Kingdom
O
OPEC The Organisation of the Petroleum Exporting Countries.
operator The individual or company responsible for conducting oil and gas exploration, development and production
activities on an oil and gas lease or concession on its own behalf and/or if applicable, for other working
interest owners, generally pursuant to the terms of a joint operating agreement or comparable agreement.
Opex calculated as “Cost of Sales” as presented in the financial statements excluding DD&A, change in stock and
cost of raw gas purchased.
P
Partnership Nostrum Oil & Gas LP, which was the holding company of the Group before the reorganisation.
PCR testing Polymerase chain reaction testing, a test for COVID-19.
Petroleum Hydrocarbons, whether solid, liquid or gaseous. The proportion of different compounds in a petroleum find
varies from discovery to discovery. If a reservoir primarily contains light hydrocarbons, it is described as a gas
field. If heavier hydrocarbons predominate, it is called an oil field. An oil field may feature free gas above the
oil and contain a quantity of light hydrocarbons, also called associated gas.
Possible Reserves (3P) Possible Reserves are those reserves that, to a low degree of certainty (10% confidence), are recoverable.
There is relatively high risk associated with these reserves. Proven, Probable and Possible Reserves are
referred to as 3P.
Probable Reserves (2P) Probable Reserves are those reserves that analysis of geological and engineering data suggests are more likely
than not to be recoverable. There is at least a 50% probability that reserves recovered will exceed Probable
Reserves. Proven plus Probable Reserves are referred to as 2P.
processing Processing of saleable product from hydrocarbons sourced from oil wells and gas wells.
Production Permit The mining allotment (Annex to the Licence), issued by the Competent Authority to Zhaikmunai LLP.
production well A well that has been drilled for producing oil or gas, or one that is capable of production once the producing
structure and characteristics are determined.
Profit oil Profit oil is the difference between cost oil and the total amount of crude oil produced each month, which is
shared between the State and Zhaikmunai LLP.
Prospective resources Quantities of petroleum which are estimated, on a given date, to be potentially recoverable from
undiscovered accumulations.
Proven Reserves (1P) Proven or Proved Reserves (1P) are those reserves that, to a high degree of certainty (90% confidence), are
recoverable. There is relatively little risk associated with these reserves. Proven Developed Reserves are
reserves that can be recovered from existing wells with existing infrastructure and operating methods. Proven
Undeveloped Reserves require development.
PRMS 2007 Petroleum Resources Management System, which is a set of definitions and guidelines designed to
provide a common reference for the international petroleum industry, sponsored by the Society for Petroleum
155 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
m3/d Cubic metres per day.
Man –hour An hour regarded in terms of the amount of work that can be done by one person within this period.
Mboe Thousands of barrels of oil equivalent.
Mechanical completion Final construction or installation phase, after which a facility can undergo commissioning activities.
Mmbbls Millions of barrels of oil.
Mmboe Millions of barrels of oil equivalent.
Mmcf Million cubic feet.
N
NBK National Bank of Kazakhstan.
NED Non-Executive Director.
Netback calculated as Revenue less Selling and Transportation expenses, Taxes other than income tax (all three as
presented in the financial statements) and cost of raw gas purchased.
Nostrum Nostrum Oil & Gas PLC, the listed company of the Group.
Nostrum Oil & Gas PLC Registered Office:
20 Eastbourne Terrace
London
W2 6LG
United Kingdom
O
OPEC The Organisation of the Petroleum Exporting Countries.
operator The individual or company responsible for conducting oil and gas exploration, development and production
activities on an oil and gas lease or concession on its own behalf and/or if applicable, for other working
interest owners, generally pursuant to the terms of a joint operating agreement or comparable agreement.
Opex calculated as “Cost of Sales” as presented in the financial statements excluding DD&A, change in stock and
cost of raw gas purchased.
P
Partnership Nostrum Oil & Gas LP, which was the holding company of the Group before the reorganisation.
PCR testing Polymerase chain reaction testing, a test for COVID-19.
Petroleum Hydrocarbons, whether solid, liquid or gaseous. The proportion of different compounds in a petroleum find
varies from discovery to discovery. If a reservoir primarily contains light hydrocarbons, it is described as a gas
field. If heavier hydrocarbons predominate, it is called an oil field. An oil field may feature free gas above the
oil and contain a quantity of light hydrocarbons, also called associated gas.
Possible Reserves (3P) Possible Reserves are those reserves that, to a low degree of certainty (10% confidence), are recoverable.
There is relatively high risk associated with these reserves. Proven, Probable and Possible Reserves are
referred to as 3P.
Probable Reserves (2P) Probable Reserves are those reserves that analysis of geological and engineering data suggests are more likely
than not to be recoverable. There is at least a 50% probability that reserves recovered will exceed Probable
Reserves. Proven plus Probable Reserves are referred to as 2P.
processing Processing of saleable product from hydrocarbons sourced from oil wells and gas wells.
Production Permit The mining allotment (Annex to the Licence), issued by the Competent Authority to Zhaikmunai LLP.
production well A well that has been drilled for producing oil or gas, or one that is capable of production once the producing
structure and characteristics are determined.
Profit oil Profit oil is the difference between cost oil and the total amount of crude oil produced each month, which is
shared between the State and Zhaikmunai LLP.
Prospective resources Quantities of petroleum which are estimated, on a given date, to be potentially recoverable from
undiscovered accumulations.
Proven Reserves (1P) Proven or Proved Reserves (1P) are those reserves that, to a high degree of certainty (90% confidence), are
recoverable. There is relatively little risk associated with these reserves. Proven Developed Reserves are
reserves that can be recovered from existing wells with existing infrastructure and operating methods. Proven
Undeveloped Reserves require development.
PRMS 2007 Petroleum Resources Management System, which is a set of definitions and guidelines designed to
provide a common reference for the international petroleum industry, sponsored by the Society for Petroleum
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
156
REGULATORY INFORMATION
Engineers, the American Association of Petroleum Geologists, the World Petroleum Council and the Society
for Petroleum Evaluation Engineers.
Production Sharing
Agreement (PSA)
The contract for additional exploration, production and production sharing of crude oil hydrocarbons in the
Chinarevskoye oil and gas condensate field in the West-Kazakhstan oblast No. 81, dated October 31 1997, as
amended, between Zhaikmunai LLP and the Competent Authority (currently MOE), representing the State.
PSA Law Kazakhstan Law No. 68-III “On Production Sharing Agreements for Constructing Offshore Petroleum
Operations”, dated 8 July 2005.
Q
QHSE Quality, Health, Safety and the Environment.
R
recovery The second stage of hydrocarbon production during which an external fluid such as water or gas is injected
into the reservoir to maintain reservoir pressure and displace hydrocarbons towards the wellbore.
Reservoir A porous and permeable underground formation containing a natural accumulation of producible oil and/or
gas that is confined by impermeable rock or water barriers, and is individual and separate from other
reservoirs.
RoK Republic of Kazakhstan.
Royalty An interest in an oil and gas property entitling the owner to a share of oil or gas production free of costs of
production.
S
sales gas Natural gas that has been processed by gas plant facilities and meets the required specifications under gas
sales agreements.
seismic The use of shock waves generated by controlled explosions of dynamite or other means to ascertain the
nature and contours of underground geological structures.
shut in Cease production from a well.
side-track well A well or borehole that runs partly to one side of the original line of drilling.
SL fields Stepnoy Leopard fields.
social infrastructure Assets that accommodate social services, e.g. hospitals, schools, community housing etc.
spud The commencement of drilling operations.
stakeholder A person or entity who may affect, be affected by or perceive themselves to be affected by an entity’s
decisions or activities.
State Republic of Kazakhstan.
State share The share of hydrocarbon production due (in cash or kind) to the Republic of Kazakhstan under the PSA (q.v.).
Suspended well A suspended well is not currently used for assessment or production and has been shut in. It will either be
returned to assessment or production, or will be plugged and abandoned.
T
TCFD Task Force on Climate-related Financial Disclosures.
TISE The International Stock Exchange.
tenge or KZT The lawful currency of the Republic of Kazakhstan.
Tonne Metric tonne.
Trillion 10 to the power of 12.
U
UNGG Refers to the Uralsk Oil and Gas Explorations Expedition. The Government of the Kazakh Soviet Socialist
Republic decided in March 1960 to create a consortium “Uralskneftegazrazvedka” for conducting oil and gas
exploration in the Uralsk region. In the 1960s, the consortium was involved in more than 59 exploration
projects. In 1970, the consortium was renamed “Uralsk Enlarged Oil-Gas Exploration Expedition”.
UK Corporate Governance
Code
Set of principles of good corporate governance for listed companies promulgated by the UK Financial
Reporting Council.
Ural O&G Ural Oil&Gas LLP.
W
well A hole drilled to test an unknown reservoir or to produce from a known reservoir.
wellhead The wellhead includes the forged or cast steel fitting on top of a well (welded or bolted to the top of the
surface casing), as well as casingheads, tubingheads, Christmas tree, stuffing box and pressure gauges.
REGULATORY INFORMATION
Engineers, the American Association of Petroleum Geologists, the World Petroleum Council and the Society
for Petroleum Evaluation Engineers.
Production Sharing
Agreement (PSA)
The contract for additional exploration, production and production sharing of crude oil hydrocarbons in the
Chinarevskoye oil and gas condensate field in the West-Kazakhstan oblast No. 81, dated October 31 1997, as
amended, between Zhaikmunai LLP and the Competent Authority (currently MOE), representing the State.
PSA Law Kazakhstan Law No. 68-III “On Production Sharing Agreements for Constructing Offshore Petroleum
Operations”, dated 8 July 2005.
Q
QHSE Quality, Health, Safety and the Environment.
R
recovery The second stage of hydrocarbon production during which an external fluid such as water or gas is injected
into the reservoir to maintain reservoir pressure and displace hydrocarbons towards the wellbore.
Reservoir A porous and permeable underground formation containing a natural accumulation of producible oil and/or
gas that is confined by impermeable rock or water barriers, and is individual and separate from other
reservoirs.
RoK Republic of Kazakhstan.
Royalty An interest in an oil and gas property entitling the owner to a share of oil or gas production free of costs of
production.
S
sales gas Natural gas that has been processed by gas plant facilities and meets the required specifications under gas
sales agreements.
seismic The use of shock waves generated by controlled explosions of dynamite or other means to ascertain the
nature and contours of underground geological structures.
shut in Cease production from a well.
side-track well A well or borehole that runs partly to one side of the original line of drilling.
SL fields Stepnoy Leopard fields.
social infrastructure Assets that accommodate social services, e.g. hospitals, schools, community housing etc.
spud The commencement of drilling operations.
stakeholder A person or entity who may affect, be affected by or perceive themselves to be affected by an entity’s
decisions or activities.
State Republic of Kazakhstan.
State share The share of hydrocarbon production due (in cash or kind) to the Republic of Kazakhstan under the PSA (q.v.).
Suspended well A suspended well is not currently used for assessment or production and has been shut in. It will either be
returned to assessment or production, or will be plugged and abandoned.
T
TCFD Task Force on Climate-related Financial Disclosures.
TISE The International Stock Exchange.
tenge or KZT The lawful currency of the Republic of Kazakhstan.
Tonne Metric tonne.
Trillion 10 to the power of 12.
U
UNGG Refers to the Uralsk Oil and Gas Explorations Expedition. The Government of the Kazakh Soviet Socialist
Republic decided in March 1960 to create a consortium “Uralskneftegazrazvedka” for conducting oil and gas
exploration in the Uralsk region. In the 1960s, the consortium was involved in more than 59 exploration
projects. In 1970, the consortium was renamed “Uralsk Enlarged Oil-Gas Exploration Expedition”.
UK Corporate Governance
Code
Set of principles of good corporate governance for listed companies promulgated by the UK Financial
Reporting Council.
Ural O&G Ural Oil&Gas LLP.
W
well A hole drilled to test an unknown reservoir or to produce from a known reservoir.
wellhead The wellhead includes the forged or cast steel fitting on top of a well (welded or bolted to the top of the
surface casing), as well as casingheads, tubingheads, Christmas tree, stuffing box and pressure gauges.
GLOSSARY
157 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
work programme A schedule of works agreed between parties (permit holders, farmees and government) contracted to be
delivered in a defined timeframe.
workover Routine maintenance or remedial operations on a producing well in order to maintain, restore or increase
production.
WUP or Water Use Permit The permit granted by the relevant government authority with respect to water use pursuant to the Water
Code.
Z
Zhaikmunai LLP Principal operating entity of the Group
Corporate office:
43/1 Karev str.
Uralsk, 090000
Republic of Kazakhstan
157 NOSTRUM OIL & GAS PLC ANNUAL REPORT & ACCOUNTS 2025
work programme A schedule of works agreed between parties (permit holders, farmees and government) contracted to be
delivered in a defined timeframe.
workover Routine maintenance or remedial operations on a producing well in order to maintain, restore or increase
production.
WUP or Water Use Permit The permit granted by the relevant government authority with respect to water use pursuant to the Water
Code.
Z
Zhaikmunai LLP Principal operating entity of the Group
Corporate office:
43/1 Karev str.
Uralsk, 090000
Republic of Kazakhstan
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025
158
ADDITIONAL INFORMATION
NOSTRUM GROUP STRUCTURE CHART
as at 31 December 2025
Nostrum Services
N.V.
Incorporated and
principal place of
business in Belgium
Nostrum Oil & Gas PLC
Incorporated under the laws of England and Wales
Nostrum Oil & Gas BV
Incorporated and principal place of business in Netherlands
Nostrum Oil & Gas Holding Limited
Incorporated under the laws of England and Wales
Nostrum Oil & Gas Finance B.V.
Incorporated and principal place of business in Netherlands
Nostrum Oil & Gas Coöperatief UA
Incorporated and principal place of business in Netherlands
Positiv Invest LLP
Incorporated and principal place of business in Kazakhstan
Nostrum
Associated
Investments LLP
Incorporated and
principal place of
business in Kazakhstan
Nostrum Services
Central Asia LLP
Incorporated and
principal place of
business in Kazakhstan
Minority Participants
100%
Zhaikmunai LLP
Incorporated and
principal place of
business in Kazakhstan
100%
Midstream Energy
Company LLP
Incorporated and
principal place of
business in Kazakhstan
100%
99%
1%
100%
100%
<0.1%
>99.9%
100% 100%
80%
(save for one share
held by Nostrum Oil
& Gas BV)
20%
ADDITIONAL INFORMATION
NOSTRUM GROUP STRUCTURE CHART
as at 31 December 2025
Nostrum Services
N.V.
Incorporated and
principal place of
business in Belgium
Nostrum Oil & Gas PLC
Incorporated under the laws of England and Wales
Nostrum Oil & Gas BV
Incorporated and principal place of business in Netherlands
Nostrum Oil & Gas Holding Limited
Incorporated under the laws of England and Wales
Nostrum Oil & Gas Finance B.V.
Incorporated and principal place of business in Netherlands
Nostrum Oil & Gas Coöperatief UA
Incorporated and principal place of business in Netherlands
Positiv Invest LLP
Incorporated and principal place of business in Kazakhstan
Nostrum
Associated
Investments LLP
Incorporated and
principal place of
business in Kazakhstan
Nostrum Services
Central Asia LLP
Incorporated and
principal place of
business in Kazakhstan
Minority Participants
100%
Zhaikmunai LLP
Incorporated and
principal place of
business in Kazakhstan
100%
Midstream Energy
Company LLP
Incorporated and
principal place of
business in Kazakhstan
100%
99%
1%
100%
100%
<0.1%
>99.9%
100% 100%
80%
(save for one share
held by Nostrum Oil
& Gas BV)
20%
159
NOSTRUM OIL & GAS PLC
ANNUAL REPORT & ACCOUNTS 2025