Mandatory Purchase of SUNs and Initial Cash Amount

Nostrum Oil & Gas is liquidating, with major payouts and a shrinking cash reserve.

What the company is saying

Nostrum Oil & Gas PLC is executing a managed wind-down following the completed sale of its Kazakhstan operations, as announced by its indirect subsidiary, Nostrum Oil & Gas Finance B.V. The company details the mechanics for redeeming Senior Unsecured Notes due 2028, including a final interest payment of $3,018,885.76 for the period ending 15 October 2026. It specifies that within 10 business days of sale completion, $417,523,273 in principal amount of Notes will be purchased, with a total cash outlay of $170,000,000 at $0.40716 per $1 of principal. The announcement emphasizes the resulting reduction in outstanding Notes to $100,000,000 and outlines the allocation of remaining cash: $45.5 million for wind-down costs, liabilities, and a solvency guarantee. The company also discloses $10 million held in escrow and $6.2 million in receivables from the disposed entities. The tone is factual, focusing on precise transaction steps and cash allocations, with no forward-looking operational claims. Robin Storey, Chief Legal Officer and Company Secretary, is named as responsible for the release, and Yelena Zhuravleva is identified as CFO.

What the data suggests

The company has completed the sale of its Kazakhstan assets and is now in the process of redeeming a substantial portion of its outstanding debt. A final interest payment of $3,018,885.76 is scheduled for on or about 26 October 2026. Within 10 business days of the 15 October 2026 completion, $417,523,273 in principal amount of Senior Unsecured Notes will be purchased for $170,000,000 in cash, representing a redemption price of $0.40716 per $1 of principal. After this transaction, only $100,000,000 in Notes will remain outstanding. The group will retain approximately $45.5 million in cash and cash equivalents, earmarked for $27.5 million in managed wind-down costs, $17.0 million in third-party and contingent liabilities (including transaction costs), and a $1.0 million solvency guarantee. An additional $10.0 million of sale consideration is held in escrow, and $6.2 million in cash balances from Zhaikmunai and POSITIV Invest remains receivable. The figures indicate a rapid contraction in the company's financial base, with the majority of proceeds allocated to debt repayment and wind-down expenses. There is no evidence of ongoing operational activity or future growth plans; the data supports a scenario of orderly liquidation.

Analysis

The announcement is factual and transactional, detailing the completion of the Kazakhstan asset sale and the subsequent financial steps, including note redemptions, interest payments, and allocation of retained cash. Most claims are either already realised (sale completion, escrow, wind-down budget) or are scheduled to occur within days (note purchase, interest payment), making the execution distance immediate. The tone is neutral, with no promotional or exaggerated language. While large capital outflows are disclosed, these are part of a managed wind-down rather than a growth investment, and the announcement does not attempt to frame these as value-creating. There are no forward-looking operational or profitability claims, and all projections are mechanical consequences of the completed transaction. No narrative inflation or overstatement is present.

Risk flags

• ●Liquidity risk is elevated as the company will retain only $45.5 million in cash after paying $170 million to redeem notes, while facing $27.5 million in wind-down costs and $17.0 million in contingent liabilities. This leaves little margin for unexpected expenses or claims.
• ●Execution risk remains around the managed wind-down process, as the company must accurately forecast and control costs to avoid insolvency. Any overruns in wind-down or contingent liabilities could exhaust remaining cash reserves.
• ●There is risk associated with the $10.0 million held in escrow and the $6.2 million receivable from the disposed entities, as access to these funds depends on the terms of the sale and potential post-completion adjustments.
• ●With the sale of its only significant operating assets and no disclosed ongoing business, the company faces uncertainty regarding its future structure, potential further distributions, or residual value for shareholders or noteholders.

Bottom line

Nostrum Oil & Gas PLC is in the final stages of winding down after selling its Kazakhstan operations, with the bulk of sale proceeds allocated to redeeming $417.5 million in principal amount of notes for $170 million in cash. Only $100 million in notes will remain outstanding, and the company projects $45.5 million in cash left to cover $27.5 million in wind-down costs and $17.0 million in liabilities, leaving minimal headroom for unforeseen expenses. The process is highly mechanical, with all major payouts scheduled within weeks, and no ongoing operations or new business lines disclosed. Investors should recognize this as a liquidation scenario, with future value dependent on the accuracy of wind-down budgeting and the company's ability to realize escrowed and receivable funds. The most important takeaway is that the company's financial base is shrinking rapidly, and any residual value will be determined by the efficiency and completeness of the wind-down process.

Announcement summary

(LSE:NOG) Nostrum Oil & Gas PLC announced that its indirect subsidiary, Nostrum Oil & Gas Finance B.V., has completed the sale of its Kazakhstan operations pursuant to a sale and purchase agreement. The company will pay a final interest payment of $3,018,885.76 on its Senior Unsecured Notes due 2028 for the period from 30 June 2026 to 15 October 2026, with payment expected on or about 26 October 2026. Within 10 business days from the completion effective date of 15 October 2026, Nostrum Oil & Gas B.V. will effect a purchase of $417,523,273 in principal amount of Notes as the Initial Payment. On or around 29 October 2026, NOG BV will pay a total cash amount of $170,000,000 at a price of $0.40716 per $1 in principal amount in respect of the Initial Payment. After this payment, the aggregate principal amount of Notes remaining outstanding will be $100,000,000. The Group will retain cash and cash equivalents of approximately $45.5 million, including for managed wind-down costs of approximately $27.5 million, payment of third-party and contingent liabilities of approximately $17.0 million (including transaction costs relating to the sale), and a reserved solvency guarantee amount of $1.0 million. $10.0 million of the sale consideration is held in escrow in accordance with the SPA. The cash balances of the disposed entities (Zhaikmunai and POSITIV Invest) at 23.59 hours London time on the day before completion was approximately $6.2 million, which remains receivable by the Group as a net cash adjustment under the SPA. The person responsible for arranging the release of this announcement is Robin Storey, Chief Legal Officer and Company Secretary. Yelena Zhuravleva is the CFO of Nostrum Oil & Gas PLC. The company previously held gas processing infrastructure and an export hub in north-west Kazakhstan until completion of the sale on 15 October 2026.

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