Low oil prices hit Nostrum's nine month revenues

The FTSE 250 company's results for the nine months to 30 September on Tuesday revealed revenue was down from $620.3m (£410.0m) to $374.8m (£247.8m) despite average daily production only dipping slightly to 44,042 barrels of oil equivalent per day (boepd).

EBITDA also dropped dramatically, down from $413.2m to $202.9m, however the company’s EBITDA margin remained strong at 54.1%.

Chief executive Kai-Uwe Kessel said the company remains focused on ensuring that the liquidity position remains strong as it battles low oil prices.

“With over US$200m of Cash on our balance sheet and a hedge with a market value in excess of US$85m I believe we are in a good position going in to year-end,” he said.

“We plan to start 2016 with three drilling rigs on site [at the GTU3 project] but have the ability to scale down drilling should the oil prices remain low and we decide to preserve liquidity."

Kessel said he’s looking forward to doubling production capacity in the next 13 months and recognising the value of GTU3.

The news comes a day after after RBC Capital Markets downgraded the stock from ‘outperform’ to ‘underperform’ and slashed its target price from 800p to 300p.

The investment bank said while it believed there is long-term value in the company, oil prices present a dilemma.