nostrum oil  gas plc annual report 2014
simple
sustainable
successful nostrum oil  gas plc is an independent 
oil and gas company engaging in the 
production development and 
exploration of oil and gas in the 
precaspian basin 
 
our vision is to become the leading 
independent oil and gas exploration 
and production company in the region  
in order to achieve our vision we 
recognise that our responsibilities  
need to go beyond our financial and 
operational targets
our track record demonstrates that 
we have successfully achieved our 
strategic goals to date we are now 
well positioned both financially and 
operationally to deliver on our vision 
in order to establish nostrum as the 
leading independent ep company 
in the fsu we have developed a simple 
and sustainable strategy that will allow us 
to successfully deliver near term growth 
combined with long term value creation
see the report online 
httpannualreport2014nostrumoilandgascom
corporate structure
nostrum oil  gas plc “nostrum” is a public limited 
company incorporated and registered in england and 
wales with its corporate headquarters located in 
amsterdam the netherlands nostrum’s ordinary shares 
are admitted to the premium listing segment of the official 
list of the financial conduct authority and to trading on 
the london stock exchange plc’s main market for listed 
securities nostrum indirectly holds a 100 interest in 
zhaikmunai llp  a kazakhstanregistered limited liability 
partnership engaged in the exploration production and 
sale of hydrocarbons from the chinarevskoye field in 
northwest kazakhstan annual report 2014 nostrum oil  gas plc 01
strategic report corporate governance financial report regulatory information additional disclosures
contents
strategic report
02 nostrum at a glance
04 our investment case
06 where we operate
08 key performance indicators
09 2014 milestones
10  key historical developments
12  chairman’s statement
14  chief executive’s review
16  market overview
20  our business model
22  our strategy
24  performance review
36  corporate social responsibility
48  financial review
58  risk management
60  principal risks and uncertainties
corporate governance
63  chairman’s overview
64  board of directors
66  nostrum oil  gas plc 
 management team
66  zhaikmunai llp  
 management team
68  corporate governance approach
74  audit committee report
80   nomination and governance 
committee report
81  remuneration committee report
82  annual report on remuneration
87  directors’ remuneration policy
92  directors’ report
financial report 
99 consolidated group  
 ﬁnancial statements 
159 parent company  
 ﬁnancial statements
regulatory information
171  investor information
173  glossary
additional disclosures
181  structure chart
how we are performing 
our simple and sustainable strategy 
has ﬁrst allowed us to maintain 
steady production we now look 
forward to continuing this whilst we 
move towards completion of our 
second gas plant and a doubling 
of our production capacity
 find out more on page 08
italy
sweden
norway
finland
estonia
latvia
poland
slovakia
hungary
belarus
ukraine czech
republic
romania
bulgaria
austria
serbia
bosnia
turkey greece
macedonia
albania
georgia
azerbaijan
armenia
croatia
slovenia
netherlands
belgium
denmark
uzbekistan
kyrgyzstan
tajikistan
lithuania
germany
switzerland
russia
kazakhstan
turkmenistan
moldova
nostrum at a glance
 find out more on page 02
our business model
 find out more on page 20
where we operate
 find out more on page 06
management report
our strategy
 find out more on page 22
corporate governance
 find out more on page 62
strategic objective
to become the leading  
independent oil and gas  
company in the fsu
subsidiary companies
in june 2014 nostrum underwent a full corporate restructuring cancelling its gdrs and replacing 
them with shares listed on the main board of the london stock exchange this restructuring required 
a number of steps to dissolve the partnership and replace it with a public limited company the 
company currently has a number of intermediary companies between the plc and its operating entity 
in kazakhstan zhaikmunai llp this structure is currently being simplified the structure as at the date 
of this report can be found in additional disclosures
000 895
737
301
178
782
revenue
us782m
kpis
 find out more on page 08
shareholder  
returns strategic report
02 nostrum oil  gas plc annual report 2014
nostrum at a glance
overview
who we are
nostrum oil  gas plc is an 
independent oil and gas 
company engaging in the 
production development and 
exploration of oil and gas in 
the precaspian basin
we are a simple sustainable 
and successful organisation 
with the vision to become the 
leading independent oil and 
gas exploration and production 
company in the former soviet 
union fsu 
we recognise that our financial 
and operational targets need  
to be pursued in a responsible 
way and we believe that our 
track record clearly demonstrates 
the successful achievement of 
our strategic goals 
whilst we continue to make 
progress towards our financial 
and operational goals we have 
developed a simple strategy 
that will allow us to successfully 
deliver the near term growth 
we have targeted combined 
with long term sustainable 
value creation
what we do
we focus on creating long term 
shareholder value through the 
development and discovery of 
oil and gas reserves as well as 
the production and sale of 
crude oil stabilised condensate 
lpg and dry gas our highly 
skilled management team has 
managed the investment of 
over us15 billion in our 
licence area since 2004 
delivering on a number of 
infrastructure projects as well 
as significantly expanding the 
reserve base over the last ten 
years through our own 
appraisal work as well as 
successful ma activity
our commercial 
products
our range of products at 
nostrum are crude oil 
stabilised liquid condensate 
lpg and dry gas currently all 
our production comes from 
the chinarevskoye licence 
we have invested in developing 
our own infrastructure to 
control the transportation of 
our products until they reach 
the final offtaker which serves 
a wide network of destinations 
and offtakers helping to 
ensure we always obtain the 
best possible prices
key statistics
production
44400 boepd
2010 2011 2012 2013 2014
000 46178
36940
13 1 58
76 7 1
44400
revenue
us782m
2010 2011 2012 2013 2014
000 895
737
301
178
782
ebitda
us495m
2010 2011 2012 2013 2014
000 551
457
188
495
99
2p reserves
571m boe
2010 2011 2012 2013 2014
582
506
522
539
571 strategic report corporate governance
annual report 2014 nostrum oil  gas plc 03
financial report regulatory information additional disclosures
reserves
ryder scott completed an update 
of nostrum’s reserves report in 
december 2014 this report includes 
the reserves at chinarevskoye and  
the three additional licences acquired 
in 2013 
for more information on  
reserves please see our website
wwwnogcouk
average daily 
production rates
we have increased production 
every year from 2004–2013 when 
full capacity of our processing 
facilities was achieved the 2014 
production from the chinarevskoye 
licence of 44400 boepd will remain 
broadly steady for 2015 and only 
represents half of what we are 
aiming to achieve from the field 
we are currently working to 
increase our processing capacity 
allowing us to more than double 
production 
market positioning
we are in a unique position in the 
market with our frontloaded 
investment programme meaning 
we are now a leader in terms of 
infrastructure in the region with 
the ability to process significant 
volumes of raw gas via our gas 
treatment facility in addition 
our advantageous location in 
northwest kazakhstan places 
us closer to our final offtake 
destinations such as the black sea 
ports and finland
operational structure
nostrum has a simple and  
familiar operating structure  
it has a board of directors led  
by the chairman and a senior 
management team led by the 
ceo nostrum aims to keep its 
operating structure as simple  
as possible to reflect its simple 
investment case the senior 
management team manages the 
major units involved in operations 
according to the interaction chart 
on page 58
fy 2014 product mix 
crude oil and condensate
lpg
dry gas
42
10
48
2p
57 1  1 m m b o e
1p
1 922 
mmboe strategic report
04 nostrum oil  gas plc annual report 2014
nostrum has developed a worldclass portfolio of assets in northwest kazakhstan 
the frontloaded investment programme has been the foundation on which strong 
production growth has been built allowing the company to enjoy sustainable cash 
flow during challenging conditions
our investment case
a simple investment case
over half a billion 
of 2p reserves
with 5711 million of 2p reserves 
and production of more than 
16 million barrels of oil equivalent 
per year we provide a unique 
combination of significant 
production and reserve upside 
along with strong operational 
cash flow
steady levels 
of production
2014’s average daily production 
was 44400 boepd remaining 
broadly constant with 2013 levels
stable financial 
platform with strong 
cash flows and 
flexibility
nostrum generated us349 1 million 
of operating cash flow in 2014 
in addition the group ended the 
year with over us400 million of 
cash
1
 on its balance sheet and 
a hedge on 7500 bopd until 
february 2016 at us85 this 
places nostrum in a strong 
position within the ep space  
as a company with significant  
cash reserves despite the more 
challenging oil price environment
1  cash on the balance sheet is defined as cash and 
cash equivalents including current and noncurrent 
investments strategic report corporate governance
annual report 2014 nostrum oil  gas plc 05
financial report regulatory information additional disclosures
worldclass assets
we have four licence areas all 
located in the precaspian basin 
to the northwest of uralsk 
nostrum’s current producing 
asset is the chinarevskoye field 
and the three additional licences 
are all located within 60120km 
of the field 
simple business case successful model  
and sustainable strategy
we have a clear strategy based on a solid foundation and compelling 
business case we will deliver near term production growth with 
preparations to double production capacity by the end of 2016 well 
underway
in addition with our continued appraisal of the existing chinarevskoye field 
and our three additional licences we are continually transferring reserves 
to the 1p category aiming for 700m boe of proved reserves this will allow 
us to maintain production above 100000 boepd up until the end of the 
chinarevskoye licence 20312033 
we are also constantly looking at areas to make additional acquisitions that 
would further expand the reserve base these would be both within reach  
of our existing infrastructure as well as further afield in kazakhstan
strong governance 
and responsibility
we are committed to achieving 
the highest possible standard of 
corporate governance and social 
responsibility and are aiming for a 
positive and lasting contribution to 
the areas in which we operate with 
a focus on delivering shareholder 
value for a sustainable future 
experienced 
management team
we are confident in the ability of 
our experienced and dedicated 
management team who are used 
to operating in kazakhstan to 
deliver on our clear strategy strategic report
06 nostrum oil  gas plc annual report 2014
united
kingdom
ireland
france
spain
italy
sweden
norway
finland
estonia
latvia
poland
slovakia
hungary
belarus
ukraine
czech
republic
romania
bulgaria
austria
serbia
bosnia
turkey greece
macedonia
albania
georgia
azerbaijan
armenia
croatia
slovenia
netherlands
belgium
denmark
uzbekistan
kyrgyzstan
tajikistan
portugal
lithuania
germany
switzerland
russia
kazakhstan
turkmenistan
moldova
where we operate
advantageous location of assets
key
current destinations
 oilcondensate
our main operational facilities are located at 
the 274 square kilometre chinarevskoye field 
in northwest kazakhstan we now have three 
additional licenses all within a 120km radius 
of this location this advantageous location  
is core to our business case allowing us to 
leverage our existing infrastructure and 
operating and development teams
transportation dynamics and routes
crude
crude oil is transported through 
our own liquids pipeline directly from 
the field site 15 is sold domestically 
and the remainder is sold through 
our rail terminal to various destinations 
in finland and through the black sea 
ports 
condensate
condensate is transported through 
our own liquids pipeline from the 
field site and then 100 is exported by 
rail to the russian black sea port of 
taman we have a long term offtake 
agreement with trafigura for our 
condensate in place until 2016
lpg
lpg is transported on trucks from 
the field site to our rail terminal where 
it is loaded on to special trains and 
then transported to the offtaker the 
majority of our lpg is sold at black sea 
ports and distributed by traders to 
eastern europe and turkey strategic report corporate governance
annual report 2014 nostrum oil  gas plc 07
financial report regulatory information additional disclosures
chinarevskoye 
field
darjinskoye
field
rostoshinskoye
field
russia
northwest kazakhstan
uralsk
yuzhnogremyachenskoye
field
key
 border
 gas pipeline 
 nostrum oil pipeline
 nostrum gas pipeline
 oil pipeline 
  nostrum oil loading rail 
terminal at rostoshi
  gas treatment facility 
gtf  oil treatment 
facility otf
dry gas
dry gas is transported along our own 
17km pipeline which connects to the 
central asia gas pipeline – the gas is 
sold domestically at this connection 
point
expanding for the future
with the preparatory work to double 
production capacity firmly underway 
all of the related infrastructure upon 
completion of gtu3 will accommodate 
the potential increased levels of 
production 
this will again further improve our 
efficiencies and effective use of 
existing infrastructure transportation 
routes and destinations are currently 
expected to remain unchanged
as a company nostrum is continually 
evaluating the destinations to which  
we sell in order to achieve the best 
possible netbacks for the company strategic report
08 nostrum oil  gas plc annual report 2014
key performance indicators
a successful year
financial kpis 
2014 saw continued cash flow generation from our processing facilities along with significant further investments in our 
next growth phase despite a challenging oil price environment at the end of the year nostrum has ensured it is fully 
financed to continue with its process facility expansion by the end of 2016
the main contributing factor to the variance between forecast and actual results was the drop in the oil price 
by 475 during 2014
nonfinancial kpis 
nostrum’s strategic goals are spread across both financial performance and also operational and social indicators 
we believe that a focus across all these areas is necessary to ensure the company’s success in the longer term thus 
we set ourselves nonfinancial kpis to ensure that we maintain our focus in these areas
revenue
us782m
2010 2011 2012 2013 2014
000 895
737
301
178
782
126
ebitda
us495m
2010 2011 2012 2013 2014
000 551
457
188
495
99
102
eps
us079
336
2010 2011 2012 2013 2014
000 119
087
044
012
079
net income
us146m
2010 2011 2012 2013 2014
000 220
162
82
23
146
336
operating cash ﬂow
us350m
2010 2011 2012 2013 2014
000 359
292
132
99
350
25
opex per barrel 
us50
1 23
2010 2011 2012 2013 2014
000
57
53
84
99
50
production
44400 boepd
2010 2011 2012 2013 2014
000 46178
36940
13 1 58
76 7 1
44400
39
2p reserves
571m boe
2010 2011 2012 2013 2014
582
506 522
539
571
1  9
proven reserves
192m boe
2010 2011 2012 2013 2014
000 199
195
169
144
192
35
total ghg emissions
26 4  1 2 1  2 mtco
2
e
2010 2011 2012 2013 2014
21 7 479 4
257  1548
437 6039
24 1 6522
2641212
21 strategic report corporate governance
annual report 2014 nostrum oil  gas plc 09
financial report regulatory information additional disclosures
2014 milestones
strategic financial operational
february
 us400 million eurobond –  
successfully issued in february 
with a fiveyear maturity at a fixed 
coupon of 6375 per annum with 
a call option after 3 years 
february
 us400 million eurobond –  
successfully issued in february 
with a fiveyear maturity at a fixed 
coupon of 6375 per annum with 
a call option after 3 years 
july
 kss as contractor – a contract 
was entered into with jsc “ogcc 
kazstroyservice” for the 
construction of the third unit of the 
group’s gas treatment facility for 
a consideration of us150 million 
march 
hedging – equating to production 
of 7500 barrels of oil per day this 
was put in place with a zero cost 
capped collar with a floor price of 
us85 there were no upfront costs 
to the company and the option has 
a twoyear maturity settled annually
march
hedging – equating to production 
of 7500 barrels of oil per day this 
was put in place with a zero cost 
capped collar with a floor price of 
us85 there was no upfront costs 
to the company and the option has 
a twoyear maturity settled annually
september 
annual shutdown of gtu 1  2 –  
the semiannual planned shutdown 
for maintenance was completed 
within nine days 
june 
admission to the main board of 
the london stock exchange –  
the ordinary share capital of the 
company 188182958 shares was 
admitted to the premium listing 
segment of the official list of the 
financial conduct authority and 
to trading on the london stock 
exchange plc’s main market for 
listed securities under the ticker nog
april
redemption of 2015 bonds –  
nostrum exercised its right of 
optional redemption of its 
outstanding us92505000 105 
senior notes which were due in 
2015 the redemption price was 
10525 plus accrued and unpaid 
interest 
december
 gtu3 – remains fully funded and on 
time and on budget for completion 
during 2016 at a cost of no more 
than us500 million
august 
changes to the board composition 
– mr mark martin ined was 
appointed chairman of the 
remuneration committee  
sir christopher codrington ined 
was appointed chairman of the 
nomination and governance 
committee mr eike von der linden 
sined to continue to serve as 
a member of the remuneration 
committee and the nomination 
and governance committee and as 
chairman of the audit committee
may 
distribution of us035 per 
common unit – made by the 
partnership to holders of common 
units representing limited 
partnership interests this was paid 
on 6 june
other
producing wells – 18 oil wells and 
16 gas condensate wells were 
producing at the chinarevskoye 
field with four drilling rigs and 
one workover rig in operation 
at the chinarevskoye field
eight wells were drilled – at 
chinarevskoye during the 12 months 
to end2014
september
ftse 250 admission – nostrum was 
notified by the ftse group that it 
would be joining the ftse 250 index 
from 22 september
principal developments in the reporting period strategic report
first phase of development
2004201 3
total capex us 1 5 billion
2008
120km crude oil and stabilised 
condensate pipeline 
completed between the 
chinarevskoye field and the 
rail terminal near uralsk
2008
us100 million ipo  
at 10 per gdr  
and us550 million 
borrowingbased 
facility in place
201 1
gas 
treatment 
facility 
completed
2010
us450 
million 
bond 
raised  
at 105 
2012
us560 million bond
issued at 7125 to reﬁnance  
part of bond debt and for  
general corporate purposes

2008
production of
 5095  
bopd
2013
annual average  
production of 
46178  
boepd
201 1
17km dry gas 
pipeline completed
2004
zhaikmunai llp 
is acquired
2004 2008 2010 2011 2012 2013
key historical developments
successful development
10 nostrum oil  gas plc annual report 2014 second phase of development
20142018
total expected capex approximately us 1 2 billion
2018
development 
programme 
submitted for 
new fields
2014
us400 million bond 
issued at 6375 for refinancing  
and general corporate purposes

2012 2013
201 7
rampup  
of production  
from gtu3
2014 2016 2017 2015 2018
2014
completion  
of 3d seismic 
on three 
additional 
licences
2014
admission to the 
main board of the 
london stock 
exchange and 
ftse 250
2016
expansion of 
processing capacity of 
gtu3 
completed
annual report 2014 nostrum oil  gas plc 11
strategic report corporate governance financial report regulatory information additional disclosures strategic report
12 nostrum oil  gas plc annual report 2014
“ nostrum’s growth and success centres around  
the quality and commitment of our people”
chairman’s statement
delivering continued growth
our vision
nostrum’s vision is to grow production 
to over 100000 boepd and to build 
a reserve base that allows the 
company to continue to produce at 
this level far into the future our vision 
of achieving production of 100000 
boepd from our existing field in 
northwest kazakhstan is now only a 
few years away as a result we are also 
looking to further build nostrum’s 
reserve base not only with reserves 
to prolong the plateau production of 
100000 boepd but also to increase 
this through acquisitions outside 
of our current production hub 
our vision is to become one of the 
leading independent ep companies 
in the fsu
nostrum intends to realise its vision 
through a clearly defined strategy 
balancing organic development with 
opportunistic expansion through 
acquisitions its main priority remains 
as always to continue to deliver growth 
and shareholder value in a responsible 
and efficient way
our ambition and  
strong financial position
nostrum continued to perform well  
in 2014 despite the year ending with  
a challenging oil price environment 
we consistently delivered production 
of approximately 45000 boepd and 
started the appraisal programme on 
our three additional fields whilst the 
financial performance of the company 
was not as strong as in 2013 as a result 
of a falling oil price during the second 
half of the year we were still able to 
end the year with over us400 million 
of cash and cash equivalents on our 
balance sheet the combination of the 
us400m bond we placed in early 
2014 and the hedge we put in place 
from february 2014 means that we are 
well positioned to be able to sustain a 
period of prolonged low oil prices and 
still deliver on our strategy thus our 
ambitions to build the leading cis 
independent ep company remain 
as strong as ever we completed our 
premium listing on the london stock 
exchange during 2014 and we are now 
a member of the ftse 250 which 
further demonstrates the ambition we 
have to achieve the highest standards in 
everything we do i believe the current 
environment can provide opportunities 
rather than limitations for nostrum 
solid financial performance
nostrum’s financial performance was 
steady as production levels remained 
broadly similar to 2013 we started 
more meaningful investment into the 
second gas treatment facility and 
raised additional financing in early 
2014 to ensure that we were fully 
financed for this phase of infrastructure 
building at the same time we 
implemented our hedging programme 
to cover all nonscalable capex for 
2014 and 2015 we continue to 
manage our cash position prudently 
we take into account first and 
foremost the liquidity position of the 
company secondly we ensure that 
use of excess cash is carefully 
considered before deploying it and 
that we are maximising shareholder 
returns with each investment we make 
despite the falling oil price 2014 was  
a good year financially and net income 
for the year was us1464 million  
i believe we have struck the right 
balance between reinvesting in future 
growth and returning cash to our 
shareholders in the current 
environment 
i am pleased that the board is 
proposing a final dividend for 2014 
of us027 per ordinary share subject 
to shareholder approval at the agm
stable production levels
the financial performance of the 
company was built on another strong 
year of operational results production 
of 44400 boepd was extremely 
close to our target of 45000 boepd 
and nostrum is now enjoying a period 
of sustained production at levels 
around 45000 boepd this steady 
production and associated cash flow 
continues to allow nostrum to invest in 
further infrastructure to double our 
production capacity by the end of 2016 
without the need to raise more capital 
in addition to this organic growth the 
cash flows nostrum generates allows 
the company to grow reserves and 
extend production through its recently 
established ma strategy  strategic report corporate governance
annual report 2014 nostrum oil  gas plc 13
financial report regulatory information additional disclosures
multifield asset base established
nostrum has started the appraisal 
programme on the three additional 
licences acquired in 2013 we have 
adopted the same approach with our 
additional fields that we undertook 
with chinarevskoye to fully understand 
the geology and derisk the 
development programme as much 
as possible we have carried out new 
3d seismic on each field and have 
now interpreted it allowing us to have 
a much better understanding of where 
to position our first appraisal wells  
we plan to start drilling an appraisal well 
in the largest field rostochinskoye in 
2015 we look forward to developing 
these fields and to bringing them into 
production to utilise our infrastructure 
development 
governance and the board
the board understands the 
importance of providing effective 
and clear leadership and direction 
on all matters relating to corporate 
governance and places great 
significance on achieving high 
standards of governance to underpin 
the group’s good business conduct 
and strong ethical culture with this in 
mind i am very pleased with how the 
company has handled the increased 
regulatory obligations imposed as a 
result of the company’s admission to 
the premium listing segment of the 
official list of the financial conduct 
authority and to trading on the 
london stock exchange plc’s main 
market for listed securities in june 
2014 i believe the company handled 
this transition very well during 2015 
the board will continue to work closely 
with management to maintain good 
standards of corporate governance 
and to ensure the company’s 
continued compliance with the rules 
imposed by the financial conduct 
authority and associated guidance 
under the uk corporate governance 
code
our commitment  
to corporate responsibility
at nostrum we strive to be a 
responsible and transparent business 
our corporate responsibility 
approach covers the relationships  
we have with all our stakeholders 
including shareholders employees 
contractors local communities and 
host government as well as the 
environments in which we work 
nostrum’s strategy on corporate 
responsibility focuses around three 
key areas – people planet and profit 
– and includes the following initiatives
 communicate its approach to its 
various stakeholders emphasising  
its stringent corporate governance 
provisions and business ethics
 wellbeing of its employees health 
and safety measures working 
environment specifics and overall 
benefits nostrum also reports on its 
direct involvement in the community 
through programmes providing 
social infrastructure sponsoring 
activities and charitable work and
 footprint carefully and adheres fully 
to relevant legislation the company 
is also proactive in liking its 
environmental objectives to the 
highest possible standards and 
ensuring stringent compliance and 
progress monitoring
in 2014 we believe nostrum’s actions 
have deemed to have a positive impact 
on its wide range of stakeholders 
including investors business partners 
regulators employees customers 
local communities the environment 
and society more generally 
our people
we are entering a changing 
environment in relation to recruitment 
as a falling oil price will inevitably 
lead to the scaling back of costs in 
the industry nostrum’s growth and 
success revolves around the quality 
and commitment of our people and  
we believe we have an excellent team 
that can deliver our strategy even with 
a lower oil price we continued to  
grow our team during 2014 with a 6 
increase in kazakhstan our total 
global workforce now counts more 
than 1000 people we remain 
committed to developing local  
content and employed 98 local 
nationals in kazakhstan as at the end  
of 2014 we will continue to develop 
our employment practices and policies 
to ensure we can attract and retain the 
best talent at the same time we will 
continue to monitor our cost base and 
ensure we do not carry unnecessary 
excess costs into 2015
the future
2014 was a solid year for the company 
for most of the year we had a strong 
oil price environment however this 
rapidly changed in the fourth quarter 
and we need to be prudent as we  
enter 2015 to ensure we are ready for  
a sustained period of low oil prices  
in 2015 our main focus is ensuring  
the timely completion of gtu3 in 2016 
and building the feedstock to allow us 
to double production we enter this 
next investment phase with a very solid  
cash position low levels of leverage 
and healthy margins in place we 
believe we have the platform to 
execute our strategic initiatives which 
gives me confidence in our prospects 
for 2015 and beyond 
frank monstrey
chairman strategic report
14 nostrum oil  gas plc annual report 2014
“ during 2014 we have made significant steps towards 
the construction of our next gas treatment unit”
chief executive’s review
maintaining steady production
how we performed in 2014
2014 was another strong year from 
an operational perspective it saw 
the gas treatment facility continue to 
operate at full capacity with a complete 
range of hydrocarbon products being 
delivered to various destinations 
outside kazakhstan nostrum is now 
deep into its second development 
phase which will entail the engineering 
planning procurement construction 
and commissioning of a new gas plant 
as well as a scalable drilling programme 
spanning the next 45 years 
our performance against our four key 
objectives for the company in 2014 
was as follows
1 ensure construction of the next gas 
plant remained on track for 2016
 in the construction of our next gtu 
which will allow us to double our 
production capacity by the end of 
2016 we have spent over us150 
million and expect the total cost to 
be below us500 million 
2 continue to grow our proven 
reserve base through appraisal 
of chinarevskoye and our three 
new ﬁelds
 as we replaced over 60 of our 
production since august 2013 whilst 
the oil price environment is extremely 
different from the end of 2013 our 
strategy remains unchanged we 
have made some reductions to our 
drilling programme but aim to fill the 
gtu3 by the end of 2017 as to reach a 
combined together with gtu1 and 2 
production of 100000 boepd we 
are well positioned to withstand the 
low oil price environment as we have 
a healthy cash balance and low costs 
of production i am very excited 
about the future of our current asset 
base as well as the potential we 
have for further expansion over the 
coming years
3 establish a dedicated business 
development team
 development team to ensure we  
can quickly and accurately evaluate 
the opportunities in the region
4 ensure that the ﬁnancial position 
of the company remains stable
 company remains stable despite the 
challenging oil price environment
steady production levels
the chinarevskoye field is now in full 
production with both the oil treatment 
facility otf and the gas treatment 
facility gtf being operated at their 
nameplate capacities nostrum 
expects a daily total production 
average of at least 45000 boepd for 
2015 and 2016 all products – crude oil 
stabilised condensate lpg and dry 
gas – are sold at the best possible 
prices on the world markets and our 
operations are running at optimal 
levels we remain on target to meet 
our objective of doubling capacity  
by the end of 2016  strategic report corporate governance
annual report 2014 nostrum oil  gas plc 15
financial report regulatory information additional disclosures
future drilling programme 
at chinarevskoye
in 2014 we drilled eight wells and are 
fortunate to have a scalable drilling 
programme in front of us our ability 
to quickly scale drilling up or down 
allows us to react to the current oil 
price environment smoothly and 
without jeopardising our nonscalable 
capex we are required to complete 
six wells in 2015 to maintain production 
at current levels which is comfortably 
achievable we are able to maintain 
production at around 45000 boepd 
and complete the gtu3 at substantially 
lower oil prices than today any 
increase in the oil price above these 
levels allows us to drill more wells for 
the purpose of filling the gtu3 and 
to appraise the new fields 
construction of second gas plant
during 2014 we have made significant 
steps towards the construction of our 
next gas plant the rationale behind 
the plant is that it will allow faster 
monetisation of reserves by increasing 
treatment capacity by an additional 
25 bcm of raw gas per year bringing 
total capacity to 42 bcm of raw gas 
per annum over us150 million has 
already been invested in the plant and 
contracts relating to over us300 
million in total for procurement and 
construction have been entered into 
we remain on track to deliver the plant 
on time and on budget in the second 
half of 2016
building up further reserves  
beyond the chinarevskoye field
in addition to proving up reserves at 
chinarevskoye nostrum’s development 
plan also focuses on sustaining its 
long term production beyond the 
chinarevskoye field alone this target 
is the basis on which nostrum’s 
mergers  acquisitions strategy is 
formed this is exemplified by the 2013 
acquisition of the subsoil use rights 
related to three adjacent oil and gas 
fields rostoshinskoye darjinskoye 
and yuzhnogremyachenskoye in the 
near vicinity of the chinarevskoye field 
based on ryder scott’s analysis these 
fields could add up to 98m of 2p 
reserves nostrum looks forward to 
drilling its first well in rostoshinskoye 
during 2015
by virtue of its size development 
stage and production track record 
nostrum has acquired high visibility 
both locally and internationally 
as a result it regularly monitors further 
ma opportunities and its approach 
is to remain both pragmatic and 
prudent as it considers these options 
nostrum’s main focus remains on 
northwest kazakhstan where it 
knows the landscape and is already 
operating successfully however 
we will also consider opportunities 
outside of north western kazakhstan 
where we see the potential to create 
further shareholder value 
key priority tasks for 2015
in 2015 there are three key objectives 
for the company in order to continue 
to deliver on our strategy 
1  ensure that the financial position 
of the company remains stable 
2  ensure construction of the next 
gas plant remains on track for 2016
3  optimise the drilling programme 
to ensure that we can fill the gtu3  
as quickly as possible whilst not 
jeopardising the company’s 
financial position 
i believe that these objectives if 
successfully achieved will provide 
the platform to significantly enhance 
shareholder value we have 
demonstrated in the past that we can 
deliver on all these objectives and 
i am therefore confident as we enter 
2015 that we are well positioned to 
achieve our goals i believe we are well 
positioned to successfully execute the 
next phase of infrastructure whilst also 
ensuring the reserve base is not only 
maintained but added to over the 
coming years
kaiuwe kessel
chief executive officer strategic report
16 nostrum oil  gas plc annual report 2014
kazakhstan is a vast country the size of western europe 
its substantial reserves of natural resources ensure its 
enormous economic potential
market overview
the oil and gas market in kazakhstan
1 
1  this information has unless otherwise stated been 
extracted from documents websites and other 
publications released by the president of kazakhstan 
the statistics agency of kazakhstan the ministry of 
finance of kazakhstan the competent authority  
and other public sources  
 
some of the market and competitive position data has 
been obtained from us government publications and 
other thirdparty sources including publicly available 
data from the world bank the economist intelligence 
unit the annual bp statistical review of world energy 
for 2013 as well as from kazakh press reports and 
publications and edicts and resolutions of the kazakh 
government in the case of statistical information 
similar statistics may be obtainable from other  
sources although the underlying assumptions and 
methodology and consequently the resulting data  
may vary from source to source  
 
certain sources are only updated periodically this 
means that certain data for current periods cannot be 
obtained and we cannot assure you that such data has 
not been revised or will not be subsequently amended
united
kingdom
ireland
france
spain
italy
sweden
norway
finland
estonia
latvia
poland
slovakia
hungary
belarus
ukraine
czech
republic
romania
bulgaria
austria
serbia
bosnia
turkey greece
macedonia
albania
georgia
azerbaijan
armenia
croatia
slovenia
netherlands
belgium
denmark
uzbekistan
kyrgyzstan
tajikistan
portugal
lithuania
germany
switzerland
russia
kazakhstan
turkmenistan
moldova strategic report corporate governance
annual report 2014 nostrum oil  gas plc 17
financial report regulatory information additional disclosures
overview – the larger 
caspian region
to date kazakhstan and 
azerbaijan are the two significant 
crude oil producing countries in 
the caspian region it is expected 
that these countries will continue 
to lead the region in crude oil 
production in the near future 
driven by production growth from 
existing fields and the development 
of recently discovered fields 
turkmenistan and uzbekistan are 
the predominant gas producers 
in the region russia plays an 
important role in the region by 
providing a transportation corridor 
between the caspian sea and the 
black sea however this part of 
russia is not a source of substantial 
crude
economic growth 
and investment in 
kazakhstan’s oil and 
gas industry
since 2000 kazakhstan has 
experienced significant economic 
growth mainly through economic 
reform and foreign investment 
exports of crude oil have grown 
significantly and due to kazakhstan 
being landlocked most of the oil 
from kazakhstan is currently 
delivered to international markets 
using pipelines which run through 
russia to shipping points on the 
black sea 
international investment into the 
kazakh oil and gas sector has 
largely taken the form of joint 
ventures including cooperation 
with the stateowned oil and gas 
company nc kazmunaygas jsc 
“nc kmg” as well as production 
sharing agreements and direct 
grants of explorationproduction 
rights to subsoil users major 
projects in kazakhstan include 
the tengiz karachaganak and 
kashagan fields 
oil supply and 
demand
according to bp’s statistical 
review of world energy 2014 as 
at 31 december 2014 kazakhstan 
ranked 12th in the world by oil 
reserves and 20th in the world by 
gas reserves kazakhstan is the 
second largest oil producer after 
russia among the former soviet 
republics and has the caspian 
region’s largest recoverable oil 
reserves kazakhstan’s proved 
oil and gas reserves were 
39 billion tonnes and 15 trillion 
cubic metres respectively as at 
31 december 2013
the kazakh government has 
stated that it expects oil and gas 
production to increase to 
150 million tonnes per year and 
794 billion cubic metres per year 
in 2015 most of this growth is 
expected to come from the tengiz 
karachaganak and kashagan 
fields
there are three major refineries in 
kazakhstan supplying the northern 
region at pavlodar the western 
region at atyrau and the southern 
region at shymkent all three 
major refineries are either under 
the control or joint control of 
nc kmg 
oil price outlook
the oil price decline has changed 
our shortterm view on oil prices 
we believe that the new forward 
curve is the best benchmark for 
estimating shortterm oil prices 
and therefore see the shortterm 
oil price around us60 per barrel
in the longer term we also believe 
that the forward curves reflect our 
view of the market as they show 
the longerterm price of oil 
increasing from us60 per barrel 
to above us70 per barrel our 
internal assumption for longterm 
oil remains unchanged with a view 
that it will average at least us85 
over the long term  strategic report
18 nostrum oil  gas plc annual report 2014
market overview continued
the oil and gas market in kazakhstan
transportation
an important aspect of increasing 
hydrocarbon production in 
kazakhstan has been the 
development of transportation 
infrastructure as this in turn has 
raised kazakhstan’s export 
capacity
natural gas
most of the gas pipelines in western 
kazakhstan with the exception  
of makatatyrauastrakhan are 
designed to provide gas to cac 
the pipeline has two branches that 
meet in the southwestern kazakh 
city of beyneu before crossing into 
russia and connecting with the 
russian pipeline system
the construction of the 
beineubozoishymkent gas pipeline 
designed to transport gas from west 
kazakhstan for use in the southern 
regions of kazakhstan and export  
to china started in 2010
the bukhara urals gas pipeline was 
initially built to supply gas from 
uzbekistan to northeast kazakhstan 
and russia’s southeast ural’s region 
bukharatashkentbishkekalmaty  
is a transit pipeline that provides gas 
from uzbekistan to kazakhstan’s 
main southern population centre
macro economic  
and micro economic 
changes during 2014
macro economic and micro 
economic changes that occurred 
in the reporting period and their 
impact on results 
 
at us80 per tonne of crude oil 
from 11 march 2014
 against the us dollar and other 
major currencies in february 
2014 affected the company in 
two ways the company 
recognised a foreign exchange 
loss as the group had a net asset 
position of tenge denominated 
accounts around this date and 
also an increase in deferred tax 
expenses due to a significant 
decrease in the tax base for 
property plant and equipment 
which is denominated in tenge
gas supply and 
demand
increases in kazakhstan’s gas 
production are expected to come 
primarily from associated gas at 
the tengiz karachaganak and 
kashagan fields most of 
kazakhstan’s gas reserves are 
located in the west of the country 
and over half are located in the 
karachaganak field 
gas production has increased 
significantly since 2004 when the 
parliament passed a law 
prohibiting the industrial 
production of oil and gas deposits 
without the utilisation of natural 
and associated gas
crude oil
currently over 7920km of 
kazakhstan’s 20238km of pipeline 
are used in oil transportation  
the three main pipelines are the 
uzenatyrausamara “uas” 
pipeline cpc pipeline and  
the kazakhstanchina pipeline 
other pipeline routes from 
kazakhstan are being considered 
such as routes through the 
caucasus region to turkey  
and routes through iran and 
afghanistan
regulation in 
kazakhstan
regulation of the oil and gas 
sector can be divided into three 
broad areas
 use rights
 environmental health and  
safety matters
 strategic report corporate governance
annual report 2014 nostrum oil  gas plc 19
financial report regulatory information additional disclosures
major oil and gas projects in kazakhstan
tco
the tco joint venture was created 
in 1993 with the aim of developing 
the tengiz and korolev fields that 
have estimated recoverable reserves 
of between 55 billion barrels 
and 81 billion barrels of oil the 
participants in the joint venture 
are chevron overseas company 
exxonmobil nc kmg and lukarco 
karachaganak project
the karachaganak field is a  
280 square kilometre gas condensate 
field located in northwest 
kazakhstan which was discovered  
in 1979 bg group and eni are joint 
operators and each hold a 
2925 interest in the venture the 
karachaganak field is kazakhstan’s 
main gas field holding an estimated 
9 billion barrels of gas condensate 
and 48 trillion cubic feet of gas
north caspian project
the kashagan field is located off the 
northern shore of the caspian sea 
near to the city of atyrau in 1997 
a consortium of companies signed 
a 40year production sharing 
agreement covering five structures 
the structures consist of 11 offshore 
blocks over an area of 5600 square 
kilometres the north caspian 
operating company ncoc a 
consortium that includes eni spa 
exxonmobil corporation shell  
total sa inpex corporation and 
nc kmg owns the project 
benchmarking of our business  
against peers 
strengths
 access to multiple transportation 
routes
 the company complete control 
of its liquids transportation
 nostrum to produce raw gas in 
northwest kazakhstan where 
there is a shortage of processing 
capacity
 and condensate
weaknesses
 in the market prices for its 
products however we do have 
hedges in place
 in the oil and gas business
 means temperatures fluctuate 
significantly between summer 
and winter
 reduces size of skilled workforce
proven reserves 
billion barrels
 venezuela  2976
 saudi arabia 2679
 canada  1731
 iran  1546
 iraq  1414
 kuwait  1040
 uae  978
 russia  800
 libya  480
 nigeria  372
 usa  334
 kazakhstan  300
 qatar  254
 china  237
 brazil  132
 algeria  122
 angola  105
 mexico  103
source eia may 2013 strategic report
20 nostrum oil  gas plc annual report 2014
our track record of successfully building 
and financing large infrastructure while 
developing reserves into commercial 
production puts us in a unique position
our business model
a simple sustainable and successful business model
production 
development  
exploration
highest standards 
of corporate 
governance
worldclass assets
experienced team
outstanding technical  
and regional expertise
social and economic  
development
continued financial 
stability of the company
chinarevskoye 
field
darjinskoye
field
rostoshinskoye
field
russia
northwest kazakhstan
uralsk
yuzhnogremyachenskoye
field
over ½ billion boe 
2p reserves
a strong and growing 
reserve base in  
northwest kazakhstan
stateoftheart 
infrastructure
with our management team’s 
outstanding technical and regional 
expertise in both oil and gas we can use 
this platform to deliver future growth to 
our shareholders 
expand processing 
capacity by the end  
of 2016
continue to grow the 
proven reserve base 
through the appraisal  
of chinarevskoye and  
the three new fields
interpreting new  
3d seismic data of the 
three additional licences strategic report corporate governance
annual report 2014 nostrum oil  gas plc 21
financial report regulatory information additional disclosures
how we run our business is equally 
important in enabling us to successfully 
deliver our business plan and map our 
growth strategy protecting our business 
sustaining our good reputation 
access to debt and  
equity capital markets
12 billion investment  
programme in place
excellent financial  
performance
ma
fully funded
maintaining our entrepreneurial culture 
and contributing to social and economic 
development are the cornerstones on 
which we are building our business
creating  
economies of  
scale through  
the value chain
investing in strategic  
acquisitions
establishing  
a business  
development  
team in the region

shareholder  
returns strategic report
22 nostrum oil  gas plc annual report 2014
our strategy
a sustainable strategy for growth
underpinned by the strength of our business model
strategic priorities our progress in 2014 kpis aligned to our  
strategic objectives
risks associated with our strategy development plans for 20152017
delivering near term 
production growth
 chinarevskoye field and consistent 
performance from existing gas 
treatment facility 
production boepd
000
2010 2011 2012 2013 2014
46178
36940
13 1 58
76 7 1
44400
 subject to risks related to delay 
noncompletion and cost overruns 
 for completion by the end of 2016 
allowing the group to double its 
production capacity 
appraising and 
developing near term 
projects
 base through appraisal of 
chinarevskoye and three new fields
 including two appraisal wells 
proven reserves mboe
000
2010 2011 2012 2013 2014
199
195
169
144
192
 unsuccessful exploration of the 
new fields could result in the 
overstatement of the group’s oil 
and gas reserves 
 scheduled to be drilled during 
2015 in the chinarevskoye and 
rostoshinskoye fields
exploration upside 
through ma
 development team 
 look for compelling acquisitions 
2p reserves mboe
000
2010 2011 2012 2013 2014
582
506 522
539
571
 impacted by changes in the market 
price of crude oil
 growth will be evaluated on an 
ongoing and opportunistic basis
linking corporate 
responsibility to the 
growth of the company
 communities and reported on 
wellbeing of employees and 
working environment
 creation of economic growth 
number of manhours without 
loss of working hours millions 
000
2010 2011 2012 2013 2014
183
166
147
123
189
 protection and operational safety 
still being developed in kazakhstan
 
to include initiatives that go beyond 
daytoday activities such as 
contractor hse management and 
environmental reporting
focusing on delivering 
shareholder value 
 common unit in 2014 recognising 
the business’s growth and cash 
generation 
distributions per common unit us
2012 2013 2014
034
032
035
2010 2011
000 000
 chinarevskoye field are currently 
the group’s sole source of revenue
 between reinvesting in future 
growth and returning cash to our 
shareholders 
 progressively reviewed by the 
board of directors in line with the 
achievement of the group’s 
strategic milestones strategic report corporate governance
annual report 2014 nostrum oil  gas plc 23
financial report regulatory information additional disclosures
strategic 
objective
to become  
the leading 
independent  
oil and gas 
company  
in the fsu
strategic priorities our progress in 2014 kpis aligned to our  
strategic objectives
risks associated with our strategy development plans for 20152017
delivering near term 
production growth
 chinarevskoye field and consistent 
performance from existing gas 
treatment facility 
production boepd
000
2010 2011 2012 2013 2014
46178
36940
13 1 58
76 7 1
44400
 subject to risks related to delay 
noncompletion and cost overruns 
 for completion by the end of 2016 
allowing the group to double its 
production capacity 
appraising and 
developing near term 
projects
 base through appraisal of 
chinarevskoye and three new fields
 including two appraisal wells 
proven reserves mboe
000
2010 2011 2012 2013 2014
199
195
169
144
192
 unsuccessful exploration of the 
new fields could result in the 
overstatement of the group’s oil 
and gas reserves 
 scheduled to be drilled during 
2015 in the chinarevskoye and 
rostoshinskoye fields
exploration upside 
through ma
 development team 
 look for compelling acquisitions 
2p reserves mboe
000
2010 2011 2012 2013 2014
582
506 522
539
571
 impacted by changes in the market 
price of crude oil
 growth will be evaluated on an 
ongoing and opportunistic basis
linking corporate 
responsibility to the 
growth of the company
 communities and reported on 
wellbeing of employees and 
working environment
 creation of economic growth 
number of manhours without 
loss of working hours millions 
000
2010 2011 2012 2013 2014
183
166
147
123
189
 protection and operational safety 
still being developed in kazakhstan
 
to include initiatives that go beyond 
daytoday activities such as 
contractor hse management and 
environmental reporting
focusing on delivering 
shareholder value 
 common unit in 2014 recognising 
the business’s growth and cash 
generation 
distributions per common unit us
2012 2013 2014
034
032
035
2010 2011
000 000
 chinarevskoye field are currently 
the group’s sole source of revenue
 between reinvesting in future 
growth and returning cash to our 
shareholders 
 progressively reviewed by the 
board of directors in line with the 
achievement of the group’s 
strategic milestones strategic report
24 nostrum oil  gas plc annual report 2014
performance review
building a worldclass portfolio of assets
chinarevskoye ﬁeld
the 274 square kilometre chinarevskoye 
licence is located in the batys province 
of northwest kazakhstan approximately 
100 kilometres northeast of uralsk and 
near to the russian border
annual boe production – 2014
16205641
2010 2011 2012 2013 2014
2829765
4802553
13483006
16855027
16205641
lpg
oil and condensate
dry gas
2p reserves breakdown 
for chinarevskoye ﬁeld 
14
44
42 strategic report corporate governance
annual report 2014 nostrum oil  gas plc 25
financial report regulatory information additional disclosures strategic report
26 nostrum oil  gas plc annual report 2014
chinarevskoye field
performance review continued
building a worldclass portfolio of assets
stable business environment
exploration and production 
licence
we were granted an exploration 
and production licence for the 
chinarevskoye field in may 1997 
which was extended in 2008 to 
2033 for all oil and gasbearing 
reservoirs and horizons covering  
185 square kilometres of the licence 
area the licence for the northeastern 
tournaisian reservoir is valid until 2031
production sharing agreement 
psa
nostrum operates under 
a grandfathered psa with the 
government of kazakhstan 
which sets the parameters for 
the exploration and development 
of the chinarevskoye field and the 
respective royalties profit share 
and tax liabilities payable to the 
government
outlook
the licence and the psa are currently 
valid until 2031 with respect to the 
northeastern tournaisian reservoir 
and 2033 for the rest of the 
chinarevskoye field and we must 
comply with the terms of the 
exploration permit the production 
permit and the development plans 
during this period to date nostrum 
has met all of its capital investment 
obligations under the psa
geology reserves and drilling
geology
the chinarevskoye field is a 
multilayer structure with ten 
reservoirs and 44 compartments 
spread over three areas the western 
area contains 16 compartments the 
northern area has 24 compartments 
and the southern area has four 
compartments commercial 
hydrocarbons have been found in 
the lower permian bashkirian 
bobrikovski tournaisian famennian 
mulinski ardatovski and 
biskiafoninsk reservoirs 
reserves
based on the ryder scott report 
dated 31 december 2014 the 
proved and probable reserves 
for the chinarevskoye field amount 
to 473 mmboe proven reserves 
amount to 1922 mmboe and 
probable reserves to 2807 mmboe 
oil and condensate amount to 
1976 mmbbl of proven and 
probable reserves lpg to 
683 mmbbl and gas to 207 mmboe
drilling
hydrocarbons were first discovered 
in the chinarevskoye reservoirs 
during the drilling of nine wells in  
the soviet era between 20042014 
69 wells and sidetracks have been 
drilled under the psa
our drilling target in 2014 was 
1012 wells and sidetracks this was 
not met due to the declining oil price 
during the second half of the year 
with eight wells drilled in total
during 2015 we plan to complete 
a total of eight wells in line with our 
strategy to move more reserves from 
the probable to proven category
geology
multilayered
structure strategic report corporate governance
annual report 2014 nostrum oil  gas plc 27
financial report regulatory information additional disclosures
onsite facilities
location
all our facilities are close to major 
international railway lines as well as 
several major oil and gas pipelines 
this advantageous location provides 
access to flexible transportation links 
for the offtakers of our products 
our onsite facilities have grown 
substantially with our second 
us12 billion capital investment 
phase currently underway
crude oil infrastructure
our oil infrastructure consists of 
an oil treatment and gathering 
facility otf capable of processing 
400000 tonnes of crude oil per year 
a 120kilometre oil pipeline oil 
gathering and transportation lines 
an oilloading facility at the rail 
terminal oil storage facilities for up 
to 30000 cubic metres of oil and 
railway cars for the associated crude 
oil and stabilised liquid condensate
oil and stabilised condensate 
pipeline and railway loading 
terminal
our 120kilometre oil pipeline and 
railwayloading terminal at rostoshi 
near uralsk were successfully 
completed in 2008 since 2009 our 
crude oil has been transported via 
the pipeline from the chinarevskoye 
field site to the railwayloading 
terminal where it is stored and 
transported by railcar to final 
offtakers 
our stabilised liquid condensate 
is also transported through the same 
pipeline using a “pig” system which 
separates the crude oil from the 
stabilised condensate this protects 
the product’s quality from being 
reduced as it would in a multipurpose 
pipeline and ensures the ability to 
command higher export prices
our oil pipeline has a maximum 
throughput of 3 million tonnes 
per year the railloading terminal 
which receives the crude oil and 
condensate has a capacity of 
34 million tonnes per year 
our infrastructure also includes 
crude oil storage tanks on site and 
at the rail terminal condensate tanks 
on site and at the terminal and 
a loading facility at the railway 
terminal the loading terminal allows 
for 32 railcars to be loaded 
simultaneously the facility is also 
equipped with a vapour recovery 
unit – the first in kazakhstan’s history
all of our infrastructure has the 
capacity to accommodate the 
planned increase in throughput 
in line with our strategy to double 
production strategic report
28 nostrum oil  gas plc annual report 2014
performance review continued
assessing the potential of our adjacent fields
rostoshinskoye 
darjinskoye  yuzhno
gremyachenskoye  
fields
value accretive acquisitions form part of 
our strategy to grow in 2013 we acquired 
three additional fields within 120km of 
chinarevskoye to add additional reserves 
to our portfolio
601 20km
from chinarevskoye 
licence strategic report corporate governance
annual report 2014 nostrum oil  gas plc 29
financial report regulatory information additional disclosures
2p reserves of
982 
mmboe
appraisal  
programme planned
us85m strategic report
30 nostrum oil  gas plc annual report 2014
rostoshinskoye darjinskoye   
yuzhnogremyachenskoye fields
performance review continued
assessing the potential of our adjacent fields strategic report corporate governance
annual report 2014 nostrum oil  gas plc 31
financial report regulatory information additional disclosures
rostoshinskoye darjinskoye  yuzhnogremyachenskoye fields
subsoil rights acquisition 
completed
in 2013 nostrum signed an asset 
purchase agreement to acquire 
100 of the subsoil use rights 
related to three oil and gas fields  
in the precaspian basin to the 
northwest of uralsk the signing  
of the supplementary agreements  
by the ministry of oil  gas became 
effective from 1 march 2013
geology
exploration activities over the past 
decades have successfully showed 
that the three fields contain 
hydrocarbons suitable for 
commercial production in several 
reservoirs of permocarboniferous 
age more specifically the bulk 
of the hydrocarbons are located 
in the bashkirian stage of the 
carboniferous significant appraisal 
of the existing accumulations and 
exploration of deeper intervals is still 
required prior to their development 
appraisal programme
the cost of the appraisal programme 
for the next 23 years is expected to 
be approximately us85 million 
during 2014 we have processed 
and interpreted the 3d seismic 
survey of rostoshinskoye and 
completed the reprocessing and 
reinterpretation of darjinskoye 3d 
and yuzhnogremyachenskoye 3d 
seismic surveys a new reserves 
report will be prepared after drilling 
of new appraisal wells the results of 
the reserves report will determine 
the development programme as well 
as provide greater detail on reservoir 
size and fluid composition 
total combined reserves
at nostrum we have an outstanding 
track record of converting reserves 
an updated reserve report by 
ryder scott as at 31 december 
2014 has shown 5711 mmboe 
of proved and probable reserves 
for the chinarevskoye and 
additional fields
in line with our strategy we are 
continuing to grow the reserve  
base and successfully increase 
production further strategic report
32 nostrum oil  gas plc annual report 2014
performance review continued
products and processes 
stabilised
condensate
c
5
c
10
nog pipeline 120km
with pigsystem
intergas
central asia
gas pipeline
truck 
transport
nog
pipeline
17km
crude oil wells
gas condensate wells
power
generation
railway
terminal
sea port reﬁneries
connection
point
railway 
terminal
final
destination
final
destination
oil
treatment
facility
otf
crude
oil
c
5
c
25
liquid
pertroleum
gas
lpg
dry gas
associated
gas
gas
treatment
facility
gtf
exploration
production
leveraging our 
competitive advantage 
through our products 
and processes strategic report corporate governance
annual report 2014 nostrum oil  gas plc 33
financial report regulatory information additional disclosures
stabilised
condensate
c
5
c
10
nog pipeline 120km
with pigsystem
intergas
central asia
gas pipeline
truck 
transport
nog
pipeline
17km
crude oil wells
gas condensate wells
power
generation
railway
terminal
sea port reﬁneries
connection
point
railway 
terminal
final
destination
final
destination
oil
treatment
facility
otf
crude
oil
c
5
c
25
liquid
pertroleum
gas
lpg
dry gas
associated
gas
gas
treatment
facility
gtf
exploration
production strategic report
34 nostrum oil  gas plc annual report 2014
performance review continued
products and processes 
products quality sales pricing transportation
crude oil
 
0815gcm
3

 
04
 to other primary 
benchmark crude 
oils produced in 
kazakhstan
 accordance with 
the psa 15 sold 
domestically 
destinations 
include neste’s 
refinery in finland
 for exports
 50 discount
 our own 120km 
pipeline from the 
field site to our  
own rail terminal  
in uralsk from 
where it is shipped 
in railcars to 
offtakers at various 
destinations
stabilised 
condensate
 
07500790gcm
3
 02

 30000 tonnes 
per month are  
sold to trafigura 
destinations 
include the russian 
black sea port  
of taman
 the same 120km 
pipeline to the rail 
terminal in uralsk 
from where it is 
shipped in railcars 
to various 
destinations
lpg
 no olefins and low 
sulphur content
 exported 
destinations 
include the russian 
black sea ports
 mediterranean lpg 
price sonatrach  
for black sea 
deliveries or the 
brest quotation for 
eastern european 
deliveries
 lpg trucks from  
the field to the rail 
terminal in uralsk 
from here it is 
shipped in railcars 
to end consumers 
and traders
dry gas
 market 
 agreements 
negotiated 
annually with the 
offtakers in a long 
term framework 
agreement
 our own 17km 
pipeline from  
the field to the 
connection point 
with the intergas 
central asia gas 
pipeline from 
where it is 
distributed by  
the offtaker strategic report corporate governance
annual report 2014 nostrum oil  gas plc 35
financial report regulatory information additional disclosures
sales and pricing policy 
we closely monitor the production 
marketing and transportation of  
our liquids as this makes up the 
largest proportion of our revenues 
we are able to achieve a relatively 
high netback for our export 
production due to the transportation  
of our products through our own 
infrastructure and the resulting 
quality guarantees 
the commercial production of dry 
gas adds significant benefits through 
the easy offtake of dry gas volumes 
using straightforward pipeline 
logistics the generation of our own 
power supply and the partially 
sponsored supply of dry gas to 
neighbouring communities
marketing
our sales and marketing department 
employs experienced traders  
the team is constantly working 
towards negotiating new offtake 
contracts and identifying efficient 
transportation options for these  
new products
development of infrastructure
the gas treatment facility uses  
a gas utilisation concept and was 
designed to treat raw gas from gas 
condensate reservoirs and the 
associated gas coming from the otf
into 3 separate products – stabilised 
condensate lpg and dry gas 
the gtf associated infrastructure 
includes a power generation station 
an lpg storage tank farm an lpg 
loading facility at the rail terminal 
lpg railcars and a 17km dry gas 
pipeline
gtu 1  2
this included the construction of  
two gas treatment units each with 
the capacity to treat approximately 
850m cubic metres of raw gas 
the gas treatment facility is now 
producing at capacity with an 
average annual production of  
44400 boepd for 2014
gtu 3
the third unit of the gas treatment 
facility will add 25 billion cubic 
metres of processing capacity 
bringing the total to 42 billion cubic 
metres and consequently more than 
doubling production the third unit 
of the gas treatment facility is due 
to be completed during 2016
power generation plant 
the gasfired power generation 
plant is linked to the gas treatment 
facility with an output of 15 megawatts 
and provides the field site with the 
electricity it requires
gas pipeline
nostrum has its own 17km gas 
pipeline which was completed 
in 2011 and is linked to the 
orenburgnovopskov gas pipeline 
the maximum annual throughput 
of this pipeline is several billion 
cubic metres
new field camp facilities
a new employee camp was 
completed in 2012 at the field site 
providing more than 460 beds and 
modern facilities as well as a canteen 
recreational areas and a health clinic 
this ensures comfortable indoor 
living conditions throughout the year 
for our field site employees
the stable production for 2014 shows 
the facility operating in a steady manner 
and at full capacity we expect this 
to remain unchanged until gtu3 is 
completed
production
000
crude and 
condensate

production
boepd
2014 2013 2012
lpg
dry gas
42
42
43
10
9
9
48
49
49
2014 2013 2012
21280
22535
18237
4496
4259
2940
18624
19 384
157 64
crude and 
condensate
lpg
dry gas
changes in production 36 nostrum oil  gas plc annual report 2014
strategic report
our continuing development as a successful  
and sustainable ep company in kazakhstan  
has created economic growth and increased  
our presence in both the local and regional 
communities our approach to corporate social 
responsibility csr is based on our commitment 
to make a positive impact on all our stakeholders 
through our business activities 
we place public interest at the core of our 
business decisionmaking process and through 
our operations the board and management team 
have developed a thorough understanding of 
and strong commitment to kazakhstan
the sustainability of our business is made possible 
through the active management of our people 
 environment programmes and our specific focus 
on environmental issues such as greenhouse gas 
ghg emissions 
corporate social responsibility
a sustainable business strategic report corporate governance
annual report 2014 nostrum oil  gas plc 37
financial report regulatory information additional disclosures
liquidation fund contribution
 us8 1 3 40 3
social infrastructure investment
 us 7 9 4000
total workforce growth 
in kazakhstan
 6 
sponsorship of activities in social 
projects and charitable work
 us 9 7 9 000
total number of training days
 8 5 04 strategic report
38 nostrum oil  gas plc annual report 2014
corporate social responsibility continued
our people
a diverse management team
nostrum has a dedicated management team with 
specialised teams in strategic locations as well as 
operational personnel in kazakhstan
the nostrum and zhaikmunai llp management team  
has 15 members and is composed as follows
3039
4049
5059
60
age diversity 
20
27
40
13
dutch
6
british
7
belgian
20
german
40
russian
7
kazakh
20
nationality diversity 
women
men
gender diversity 
7
93
a large team of dedicated employees
one of our most significant contributions to kazakhstan is 
the wealth generated by hundreds of employees working  
in our fields and in uralsk the number of employees at our 
operations has more than doubled since 2005 making  
us one of the largest employers in the batys province
in addition to our assets and representative offices in 
kazakhstan we have offices in amsterdam london  
st petersburg and brussels 
number of fulltime equivalent employees  
as per 31 december 2014
location 2010 2011 2012 2013 2014
chinarevskoye field 500 552 631 633 686
uralsk 144 170 207 274 268
other 33 36 46 56 51
total 677 758 884 963 1005
2029
3039
4049
5059
60
age diversity 
33
21
4
17
25
women
men
gender diversity 
21
79
in 2014 the total workforce in kazakhstan grew by 6 
and the staff turnover rate was 54 strategic report corporate governance
annual report 2014 nostrum oil  gas plc 39
financial report regulatory information additional disclosures
salary package and growth rates
nostrum offers competitive remuneration packages to its 
employees and is in full compliance with all regulatory 
bodies guidelines and requirements
description 2010 2011 2012 2013 2014
average number of fulltime 
equivalent employees in 
kazakhstan 619 722 838 907 961
change in average monthly 
salary of employees  9 16 28 6 21
effective social guarantees
we offer effective social guarantees in the following areas

 training
under the terms of the psa with the government of 
kazakhstan we are required to
 development cost relating to the chinarevskoye field and
 including 2020 for purposes of training local specialists 
and educating kazakh citizens 
for 2014 the oil ministry committee approved a training 
budget of us1089 million the actual training cost for 
2014 was us2006 million
total training budget in 2014  
us2006 million
 
total number  
of training days in 2014  
8504
 
number of employees 
benefitting from 
education and training 
programmes in 2014  
832
 
well control programming and 
monitoring
four field employees were selected to follow 
specialised training in moscow this allowed the 
implementation of a fully automated control process 
from some 11 condensate wells all the way to the 
monitoring centre which can now be managed by  
one operator receiving all of the information from the 
different wells simultaneously in real time
international certificate in 
technological processes in the oil 
and gas industry opito pptc
in octobernovember 2014 consultants of the abiroy 
technical center selected candidates at zhaikmunai  
for the opito pptc training programme a total of  
60 potential candidates were selected on the basis of 
various tests and 15 were finally chosen to enter the 
10module certified training programme strategic report
40 nostrum oil  gas plc annual report 2014
corporate social responsibility continued
our people
categories and numbers of nog personnel trained
operations 
ﬁeld workers
heads of departments
engineers 
and technicans
5
31
796
training type people enrolled
 69
special skills training 27
professional training 4
 
labour relations 
we consider our relations with our employees to be strong 
and have not experienced any work stoppages strikes  
or similar actions to date relations with our employees  
are a key priority for our business
human rights policy and diversity
the nostrum code of conduct sets out certain principles 
that guide business conduct and provides a nonexhaustive 
outline of what nostrum considers permissible conduct 
by its employees violations of this code of conduct  
may result in disciplinary action including dismissal from 
employment or criminal prosecution
for further details please see our website  
wwwnogcouk strategic report corporate governance
annual report 2014 nostrum oil  gas plc 41
financial report regulatory information additional disclosures
our community
our community approach
nostrum’s approach to community relations places great 
emphasis on creating an integrated caring and secure 
community for its personnel and subcontractors 
our social infrastructure
under the terms of the psa linked to the chinarevskoye 
field as well as the subsoil agreements linked to the 
additional fields we spend us300000 and us350000 
per annum respectively to finance social infrastructure 
in addition to these psa social fund obligations nostrum 
also invested in significant social infrastructure projects in 
2014 which contribute to the quality of life of employees 
and the stability of communities
significant social infrastructure projects in 2014
project type infrastructure beneficiaries
budget 
allocated
roads  
repair and 
maintenance
inside and
 outside 
licence area
all 
stakeholders us536000
new camp
chinarevskoye
 field site
rotational 
personnel us258000
total us794000
sponsoring activities charitable work and 
participation in social projects
significant projects in 2014
project type definition beneficiaries
budget 
allocated
kazenergy membership
all 
stakeholders us445000
regional 
volleyball 
team sponsorship
staff and
 community us275000
education 
support 
programme contributions
all 
stakeholders us101000
public 
associations membership
staff and
 community us56000
other types of 
sponsorships
various 
events
staff and
 community us47000
zelenoysky 
area
assistance in
 mayor’s office
all 
stakeholders us31000
other 
sporting 
events sponsorships
staff and
 community us23000
total us978000
liquidation fund
under the terms of the psa nostrum is building up a 
liquidation fund of us12 million to provide funds for the 
removal of oil and property at the end of the psa in 2014 
the required us813403 contribution was set aside for  
this purpose strategic report
42 nostrum oil  gas plc annual report 2014
corporate social responsibility continued

our qhse approach  
and organisation
 improving the management and 
mitigation of risks relating to health 
safety and the environment and 
preventing any injury or ill health to 
employees this is achieved through 
the provision of comprehensive rules 
and guidelines based on a series of 
welldefined strategic objectives
centralised function
 throughout our organisation thanks  
to a centralised function with a flexible 
organisational structure
this organisational structure 
encompasses such activities as health 
 safety production facilities drilling 
camp and roads occupational health 
 hygiene including environmental 
and greenhouse gases monitoring 
civil defence and emergency response 
as well as overarching safety and 
engineering best practice 
implementation
qhse policy and priorities
qhse policy strategic report corporate governance
annual report 2014 nostrum oil  gas plc 43
financial report regulatory information additional disclosures
priorities for 2015
building on the progress made in 2014 the focus for 2015 
 
that go beyond our daytoday activities specifically
 health and safety
a safe working environment
health and safety at kazakh oil and gas companies is 
subject to state legislation and regulation our psa also 
requires that our operations meet applicable health and 
safety requirements
hse code of conduct
 stipulate that we must comply with all applicable laws and 
regulations as well as best practice with regard to health 
safety and environmental issues 
to ensure the wellbeing of employees the company 
frequently undertakes the following practices
 supply of personal protective equipment including 
protective clothes adapted footwear and special tools
standards reached
in 2014 standards have been established around indicators 
such as lost time injuries and total recordable injuries 
ongoing monitoring is done against these standards  
and reported monthly
number of manhours without loss of working hours 
in millions

2010 2011 2012 2013 2014
123
147
166
183
189
  number of manhours without loss of working hours total number of manhours 
worked by the company and contractors’ personnel without any injuries resulting in  
a lost working day while performing activities on company premises or noncompany 
premises subject to company management controls applied through contractual terms 
if the are executed on behalf of the company strategic report
44 nostrum oil  gas plc annual report 2014
corporate social responsibility continued
our environment
managing our environmental footprint through our 
site environmental monitoring programme 
our approach to environmental protection follows a 
structured commitment to a series of yearly environmental 
objectives these key priorities are in line with strategic 
regulatory and communication imperatives and structured 
in accordance to kazakh regulations


 and other works
in 2014 specific monitoring activities were carried out in 
these areas in order to establish benchmarks which arewill 
be integrated into our environmental targets these  
include the monitoring of the atmosphere surface water 
soil and the control of pollutant emissions sources and 
sewage works
nostrum has developed a site monitoring programme 
 monitor our environmental activities identify any potential 
operational environmental impact and enable us to take 
prompt corrective measures in case of any incident
programme aims
 decisionmaking including environment quality target 
values and information on regulatory instruments 
applicable to environmental impact of production 
processes
 legislation of the republic of kazakhstan
 environment
 use
 response
 among managers and employees
 health risks
 system and 
 finance decisions
programme methods and controls
 and measurements
 reporting
 violations of national environmental laws including the 
internal response to any violations
 employee responsibilities for carrying out site 
environmental monitoring and
 environmental monitoring
compliance with legislation
the site environmental monitoring annual report 2014
1
 
is a comprehensive document detailing the content 
methodology and results of the environmental efforts at 
nostrum it shows that the environmental monitoring 
programme activities were carried out according to the 
established scope in addition its “conclusions” section 
states the following 
“from the report it follows that in 2014 as well as previously 
the company has not exceeded the established 
environmental pollution standards for production facilities 
located in the area”
1  zhaikmunai llp 2014 site environmental monitoring annual report general director 
– heinz wendel strategic report corporate governance
annual report 2014 nostrum oil  gas plc 45
financial report regulatory information additional disclosures
industrial waste management and contaminated soil 
reclamation
nostrum complies with all current kazakh legislation with 
regard to industrial waste management and contaminated 
soil reclamation
our greenhouse gas ghg reporting 
nostrum has been monitoring and reporting its ghg 
emissions over the last several years in accordance with 
kazakh regulatory requirements starting in 2013 the 
company has also developed its ghg reporting in line 
with the new regulations amending company law 
requirements in the uk 
the data is reported from all emission sources as required 
under the companies act 2006 strategic report and 
directors’ report – regulations 2013 the period for 
which the company is reporting the information matches 
the periods in respect of which the directors’ report is 
prepared no responsibility is taken for any emission 
sources which are not included in the consolidated 
financial statements the results of the ghg emissions 
inventory are presented in the format recommended  
by the ghg protocol
direct ghg emissions scope 1
the following direct ghg emissions scope 1 sources have 
been identified flares heaters incinerators boilers gas 
turbine plants electric power stations compressors and 
fugitive emissions 2010 was chosen as the base year for 
 for 2014 pursuant to the republic of kazakhstan 
government resolution 1588 dated 13 december 2012
historically the major part of stationary combustion 
emissions was attributed to flaring of associated gas at the 
oil treatment unit out and at the gas treatment facility 
gtf the situation has changed considerably since the 
gtf was completed
total direct ghg emissions scope 1 subdivided by 
gas types and by source types are summarised in  
tables 1 and 2
table 1 scope 1 ghg emissions subdivided by gas types
ghg emissions 
mtco
2
e 2010 2011 2012 2013 2014
carbon dioxide 
co
2
 2402594 4209928 2560504 1886040 2365560
methane ch
4
 814 154197 8052 286936 274248
nitrous oxide n
2
o 13084 11884 2831 1657 1243
hydrofluorocarbons 
hfcs 30 30 161 161 161
perfluorocarbons 
pfcs – – – – –
sulphur 
hexafluoride sf
6
 – – – – –
total 2416522 4376039 2571548 2174794 2641212
table 2 scope 1 ghg emissions subdivided by source 
types
ghg emissions 
mtco
2
e 2010 2011 2012 2013 2014
stationary 
combustion 2403833 4331325 2521389 2126123 2601244
mobile combustion 11943 20867 23121 28763 21352
process sources – – – – –
fugitive sources 746 23847 27038 19908 18616
agricultural sources – – – – –
total 2416522 4376039 2571548 2174794 2641212 strategic report
46 nostrum oil  gas plc annual report 2014
corporate social responsibility continued
our environment
indirect ghg emissions scope 2
nostrum does not use purchased steam heating or 
cooling the only purchased power related to indirect 
ghg emissions is electrical power which is supplied  
to nostrum facilities via the zelenovskaya distribution 
network zapkazrek jsc through its subsidiary 
batys energoresursy llc the regional emission factor 
027086 tco 2mwh was calculated using methodological 
guidelines for the calculation of ghg emissions from 
electrical power stations and boiler houses astana 2010 
and regional net thermal efficiency of urals natural gas 
fired power plants 733
total direct and indirect ghg emissions scope 1 and 
scope 2 and total ghg emissions are summarised in  
table 3
table 3 scope 1 scope 2 and total ghg emissions
ghg emissions 
mtco
2
e 2010 2011 2012 2013 2014
direct scope 1 2416522 4376039 2571548 2174794 2641212
indirect energy 
scope 2 34640 37665 40945 40584 52786
total emissions 
mtco
2
e 2451162 4413704 2612493 2215378 2693998
total ghg emissions mtco 2 e
2010 2011 2012 2013 2014
500000
400000
300000
200000
100000
0
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 defra environmental reporting guidelines 2013 
taking into account the variety of products of nostrum oil 
 gas – crude oil stabilised condensate lpg and dry gas 
– the chosen intensity ratio is expressed in metric tonnes 
of co 2e mtco 2e per tonne of oil equivalent mmboe 
table 4 shows intensity ratios for total scope 1 and 
scope 2 emissions in the period 2011 to 2014
table 4 emissions intensity ratios for total ghg emissions 
scope 1 and scope 2 in the period 20102014
production – 
intensity ratio 2010 2011 2012 2013 2014
production toe 392000 672000 189000 2307748 2369823
mtco
2
toe 063 066 138 01 011
production mmboe 28 48 135 1648 1623
mtco
2
mmboe 8754150 9195217 1935180 1306507 1659888
emission intensity ratios mtco 2toe
07
05
06
04
03
02
01
00
2010 2011 2012 2013 2014
ghg emissions were considerably reduced after the 
gtf came into operation in 2012 further operational 
optimisation initiatives have subsequently been carried 
out in 2013 and 2014 with the aim of further lowering the 
emissions intensity ratio strategic report corporate governance
annual report 2014 nostrum oil  gas plc 47
financial report regulatory information additional disclosures
developing a ghg reduction capacity
according to its ghg emissions reduction strategy 
nostrum evaluates the potential for ghg emissions 
reductions yearly to plan for the subsequent introduction 
of energy and resource saving measures to establish this 
reduction potential we go through the following steps
 emissions enterprise management systems ghg ems
 monitoring
 facilities
 at industrial sites
 development
 finance activities and
 emissions reduction measures
to meet these ambitious targets nostrum plans to 
 
for managers and identify contractors that are able to 
provide effective assistance in improving energy efficiency 
and reducing ghg emissions strategic report
48 nostrum oil  gas plc annual report 2014
financial review
key performance indicators
net cash from operating activities 
in millions of us dollars 
2014 3491
2013 3586
2012 2918
2011 1322
net cash from operating activities is the net of all cash 
receipts and payments associated with nostrum oil  gas’s 
sales this indicator reflects the group’s ability to generate 
cash for investment and financing activities
net income 
in millions of us dollars 
2014 1464
2013 2195
2012 1620
2011 816
income for the period is the total of all the earnings it is  
of fundamental importance for a sustainable commercial 
enterprise
ebitda 
in millions of us dollars 
2014 4947
2013 5515
2012 4565
2011 187 9
ebitda is defined as profit before tax net of nonrecurring 
expenses finance costs foreign exchange lossgain esop  
depreciation interest income other income and expenses 
ebitda margin 
in percentage
2014 633
2013 616
2012 619
2011 625
ebitda margin is defined as ebitda as a percentage of 
revenue 
net cash used in investing activities 
in millions of us dollars 
2014 3045
2013 2390
2012 2697
2011 1037
net cash used in investing activities is capital investment 
capital expenditure exploration expense new equity 
and loans in equityaccounted investments and other 
adjustments less divestment proceeds
production 
in mboe
2014 162
2013 169
2012 135
2011 48
production is the sum of all average daily volumes of 
unrefined oil products crude oil and stabilised condensate 
and gas products lpg and dry gas produced for sale 
changes in production have a significant impact on the 
group’s cash flow strategic report corporate governance
annual report 2014 nostrum oil  gas plc 49
financial report regulatory information additional disclosures
proven oil and gas reserves 
in mboe
2014 1922
2013 1992
2012 1948
2011 1691
proved oil and gas reserves are the total estimated 
quantities of oil and gas that can with reasonable certainty 
be recovered in future years from known reservoirs as at 
december 31 under existing economic and operating 
conditions gas volumes are converted into barrels of oil 
equivalent boe reserves are crucial to an oil and gas 
company since they constitute the source of future 
production
opex per barrel 
in us dollars 
2014 50
2013 57
2012 53
2011 84
opex per barrel is defined as operating expenditures 
divided by the total barrel of oil equivalent production 
dividend 
in us dollars per common unit
2014 035
2013 034
2012 032
2011 –
in september 2012 the board of directors has approved 
the implementation of an ongoing distribution policy with 
the intention of making an annual distribution of not less 
than 20 per cent of the company’s consolidated net profit 
the policy will be progressively reviewed by the board of 
directors in line with the achievement of nostrum’s 
strategic milestones
the board is proposing a dividend of us027 per ordinary 
share for the year ended 31 december 2014 the dividend 
is subject to shareholder approval at the agm
return on investment 
in percentage
2014 671
2013 1287
2012 1043
2011 625
return on investment roi is defined as net income 
divided by invested capital invested capital equals total 
debt plus total equity minus nonoperating cash and 
investments
net debt 
in millions of us dollars 
2014 5447
2013 3885
2012 3752
2011 3221
net debt is defined as total debt minus cash and cash 
equivalents including current and noncurrent investments
effect of realized profit on the structure of assets 
capital liquidity and liability
profit is appropriated to strengthen the group’s financial 
position to finance investment in oil  gas assets to grow 
capital to maintain liquidity to keep net debt at defined 
levels and to pay dividends reference is made to kpis 
investing activities dividend and net debt strategic report
50 nostrum oil  gas plc annual report 2014
financial review continued
analysis of revenue expenses and results – 20142013 comparison
the table below sets forth the line items of the group’s consolidated statements of comprehensive income for the year 
ended 2014 and 2013 in us dollars and as a percentage of revenue
in thousands of us dollars 2014  of revenue 2013  of revenue
revenue 781878 1000 895014 1000
cost of sales 221921 284 286222 320
gross profit 559957 716 608792 680
general and administrative expenses 54878 70 56019 63
selling and transportation expenses 122254 156 121674 136
finance costs 61939 79 43615 49
finance costs  reorganisation 29572 38 – 00
employee share option plan fair value adjustment 3092 04 4430 05
foreign exchange loss 4235 05 636 01
gain on derivative financial instruments 60301 77 – 00
interest income 986 01 764 01
other expenses 49844 64 25593 29
other income 10086 13 4426 05
profit before income tax 311700 399 362015 404
income tax expense 165275 211 142496 159
profit for the year 146425 187 219519 245
for the year ended 31 december 2014 the “reporting period” realised profit of the group decreased by us731 million 
to us1464 million fy 2013 us2195 million the decrease in realised profit is mainly driven by a decrease in the oil 
prices during the second half year of 2014 resulting in a decrease in revenue combined with an increase in other 
operating costs and income tax expenses partially offset by a gain on derivative financial instruments
revenue
the group’s revenue decreased by 126 to us7819 million for the reporting period fy 2013 us8950 million 
the decrease in group revenue was driven primarily by a significant decrease in the overall oil prices during the second 
half of 2014
the group’s revenue breakdown by products sales volumes and the commodity price of brent crude oil for the years 
ended 31 december 2014 and 2013 is presented below
in thousands of us dollars 2014 2013 variance variance 
oil and gas condensate 620164 709107 88943 125
gas and lpg 161714 185907 24193 130
total revenue 781878 895014 1 13136 126
sales volumes boe 16205641 16854970 649329 39
average brent crude oil price on which  
nostrum oil  gas based its sales usbbl 996 1084 strategic report corporate governance
annual report 2014 nostrum oil  gas plc 51
financial report regulatory information additional disclosures
costs for government profit share decreased by 
us262 million to us46 million for the reporting period 
fy 2013 us307 million the decrease resulted from the 
adoption of a new work program for oilfield operations 
and a change in the coefficient of natural gas equivalent 
which resulted in a reversal of the government profit share 
expense from prior periods amounting to us178 million
materials and supplies expenses decreased by 109 
to us109 million for the reporting period fy 2013  
us123 million this decrease resulted from less need for 
spare parts and other materials for repairs and maintenance 
of the facilities specifically for the gas treatment facility 
and wells 
well workover costs increased by 1253 to us63 million 
for the reporting period fy 2013 us28 million the 
increase resulted from the scheduled work on several wells
management fees are absent in cost of sales for the 
reporting period fy 2013 us36 million the fees 
incurred by the group relate to the services provided 
by probel capital management nv which was acquired 
by the group on 30 december 2013 and is now being 
consolidated the related costs of this entity are included 
in general and administrative expenses for the reporting 
period as professional services related to the rendering 
of geological geophysical drilling technical and other 
consultancy services and payroll and related taxes
general and administrative expenses
general and administrative expenses decreased by 20  
to us549 million for the reporting period fy 2013  
us560 million this was primarily due to an increase  
in expenses for professional services payroll and related 
taxes which was partially offset by decreased management 
fees other taxes and training the change in the structure 
of general and administrative expenses can be explained 
by the acquisition of probel capital management nv  
on 30 december 2013 which led to the elimination of 
intercompany management fees and the recognition  
of its expenses as professional services and payroll and  
related taxes
the following table shows the group’s revenue 
breakdown by exportdomestic sales for the years 
ended 31 december 2014 and 2013 is presented below
in thousands of  
us dollars 2014 2013 variance variance 
revenue from 
export sales 676064 765029 88965 1 16
revenue from 
domestic sales 105814 129985 24171 186
total 781878 895014 1 13136 126
cost of sales
cost of sales decreased by 225 to us2219 million 
for the reporting period fy 2013 us2862 million 
the decrease is primarily explained by a decrease in 
depreciation depletion and amortisation royalties 
government profit share repair maintenance and other 
services materials and supplies expenses although this is 
partially offset by an increase in payroll and related taxes 
well workover costs and other expenses on a boe basis 
cost of sales decreased by us329 or 194 to us1369 
for the reporting period fy 2013 us1698 and cost of 
sales net of depreciation per boe decreased by us305 
or 307 to us688 fy 2013 us992
depreciation depletion and amortisation decreased by 
71 to us1105 million for the reporting period fy 2013 
us1190 million the decrease is mainly due to an increase 
in proved developed reserves starting from 31 august 
2013 which was partially offset by an increase of production 
volumes
repair maintenance and other services decreased by  
316 to us358 million for the reporting period fy 2013 
us524 million these expenses include maintenance 
expenses related to the gas treatment facility and other 
facilities of the group engineering and geophysical study 
expenses these costs fluctuate depending on the planned 
works on certain objects
royalties which are calculated on the basis of production 
and market prices for the different products decreased by 
382 to us243 million for the reporting period fy 2013 
us394 million this decrease resulted from the reversal 
of royalty expenses from prior periods amounting to  
us55 million the reversal was due to the adoption of  
a new work program for oilfield operations and a change  
in the coefficients used for converting condensate sales 
gas and lpg volumes into natural gas equivalent volumes strategic report
52 nostrum oil  gas plc annual report 2014
financial review continued
selling and transportation expenses
selling and transportation expenses increased by 05  
to us1223 million for the reporting period fy 2013 
us1217 million the significant decrease in transportation 
costs and increase in loading and storage costs is primarily 
due to transportation costs including certain loading and 
storage costs for the prior year part of the increase in 
loading and storage costs was driven by a rise in sales 
volumes for lpg and condensate
finance costs
finance costs increased by us183 million to us619 
million for the reporting period fy 2013 us436 million 
the increase in these costs was primarily driven by the 
expenses relating to the early redemption of the 2010 
notes and the amortization of the remainder of transaction 
cost incurred for the issuance of 2010 notes 
finance costs – reorganisation
the “finance costs – reorganisation” represent the costs 
associated with the introduction of nostrum oil  gas plc 
as the new holding company of the group and respective 
reorganisation
derivative financial instruments
the “gain on derivative financial instruments” represents 
the fair value of the hedge that the group entered into on 
3 march 2014 and which runs through 29 february 2016 
other
foreign exchange losses amounted to us42 million  
for the reporting period fy 2013 us06 million this  
is explained by the fact that on 11 february 2014 the  
tenge was devalued against the us dollar and other  
major currencies the exchange rates before and after 
devaluation were 155 tengeus dollar and 185 tenge 
us dollar respectively since the group had a net asset 
position of tenge denominated accounts around this date 
the devaluation of the tenge resulted in a significant foreign 
exchange loss recognised in the reporting period
other expenses increased by 948 to us498 million 
for the reporting period fy 2013 us256 million other 
expenses mainly represent export duties paid by the 
group the export duties represent custom duties for the 
export of crude oil and customs fees for services such as 
processing of declarations temporary warehousing etc 
other expenses for the reporting period also include fines 
and penalties amounting to us26 million which were the 
result of court decisions 
income tax expense increased by 160 to us1653 million 
for the reporting period fy 2013 us1425 million  
the increase in income tax expense is primarily due to an 
increased deferred tax for the reporting period this was 
driven by the tenge devaluation in february 2014 which 
led to a significant decrease in the tax base of property 
plant and equipment which is denominated in tenge
the following table shows the group’s total corporate 
income tax split between current income tax adjustments 
and deferred income tax for the years ended 31 december 
2014 and 2013 is presented below
in thousands of  
us dollars 2014 2013 variance variance 
current income 
tax 11 7 827 138883 21056 152
adjustment in 
respect of the 
current income 
tax for the prior 
periods 6785 – 6785 na
deferred income 
tax expense
benefit 54233 3613 50620 14011
total 165275 142496 22779 160 strategic report corporate governance
annual report 2014 nostrum oil  gas plc 53
financial report regulatory information additional disclosures
liquidity and capital resources – 20142013 comparison
general
during the period under review nostrum’s principal 
sources of funds were cash from operations and amounts 
raised under the 2012 notes and the 2014 notes its 
liquidity requirements primarily relate to meeting ongoing 
debt service obligations under the 2012 notes and the 
2014 notes and to funding capital expenditures and 
working capital requirements
the following table sets forth the group’s consolidated 
cash flow statement data for the years ended 31 december 
2014 and 2013
in thousands of us dollars 2014 2013
cash and equivalents at the 
beginning of the period 184914 197 730
net cash flows from operating 
activities 349636 358554
net cash used in investing activities¹ 305063 239020
net cash fromused in financing 
activities 147 462 132350
effects of exchange rate changes  
on cash and cash equivalents 1506 –
cash and equivalents  
at the end of the period 375443 184914
 excluding deposits and restricted cash
net cash flows from operating activities
net cash flow from operating activities was us3496 million 
for the reporting period fy 2013 us3586 million and 
was primarily attributable to
 us3117 million fy 2013 us3620 million adjusted 
by a noncash charge for depreciation depletion 
and amortisation of us1119 million fy 2013 
us1204 million and finance costs of us619 million 
fy 2013 us436 million
 us167 million primarily attributable to a decrease in 
trade receivables of us365 million fy 2013 an increase 
of us126 million an increase in prepayments and 
other current assets of us77 million fy 2013 an 
increase of us68 million an decrease in trade payables 
of us56 million fy 2013 a decrease of us57 million 
and an increase in other current liabilities of us03 million 
fy 2013 us88 million
 us1545 million
net cash used in investing activities
the substantial portion of cash used in investing activities  
is related to the drilling programme and the construction 
of a third unit for the gas treatment facility
net cash used in investing activities for the reporting 
period was us3051 million fy 2013 us2390 million 
due primarily to the drilling of new wells resulting in cash 
spent of approximately us1268 million fy 2013 
us1081 million costs associated with the third gas 
treatment unit of approximately us1428 million fy 2013 
us124 million and costs associated with rostoshinskoye 
darjinskoye and yuzhnogremyachinskoye fields of  
us104 million fy 2013 50 million partially offset by 
the redemption of us300 million of cash deposits 
fy 2013 redemption of us25 million and placement 
of us300 million of bank deposits
net cash used inprovided by financing activities
net cash provided from financing activities during 
the reporting period was us1475 million primarily 
attributable to the issue of the 2014 notes amounting 
to us4000 million offset by an early redemption of the 
2010 notes amounting to us925 million payment of 
us646 million in distributions and the finance costs paid 
on the group’s 2010 notes 2012 notes and 2014 notes 
net cash used in financing activities during the fy 2013 
was us1324 million which was mainly represented by 
the finance costs paid on the group’s 2010 notes and 
2012 notes  strategic report
54 nostrum oil  gas plc annual report 2014
analysis of revenue expenses and results – 20132012 comparison
the table below sets forth the line items of the group’s consolidated statements of comprehensive income for the year 
ended 2013 and 2012 in us dollars and as a percentage of revenue
in thousands of us dollars 2013  of revenue 2012  of revenue
revenue 895014 1000 737065 1000
cost of sales 286222 320 238224 323
gross profit 608792 680 498841 67 7
general and administrative expenses 56019 63 62412 85
selling and transport expenses 121674 136 103604 141
finance costs 43615 49 46785 63
employee share option plan 4430 05 2470 03
foreign exchange lossgain net 636 01 776 01
interest income 764 01 698 01
other expense 25593 29 6612 09
other income 4426 05 3940 05
profit before income tax 362015 404 282372 383
income tax expense 142496 159 120363 163
profit for the year 219519 245 162009 220
revenue increased by us1579 million or 214 to us8950 million in the year ended 31 december 2013 from  
us7371 million in the year ended 31 december 2012 primarily due to the increase in output from the gas treatment 
facility for the year ended 31 december 2013 revenue from sales to the group’s top two customers amounted to 
us2030 million and us1734 million respectively for the year ended 31 december 2012 revenue from sales to the 
group’s top three customers amounted to us2006 million us540 million and us1188 million respectively
the following table shows the group’s revenue and sales volumes for years ended 31 december 2013 and 2012
 year ended 
 31 december
in thousands of us dollars 2013 2012 
oil and gas condensate 709107 587371
gas and lpg 185907 149694
total revenue 895014 737065
sales volumes boe 16854970 13629245
the following table shows the group’s revenue breakdown by exportdomestic sales for the year ended 31 december 
2013 and 2012
 year ended 
 31 december
in thousands of us dollars 2013 2012 
revenue from export sales 765029 630412
revenue from domestic sales 129985 106653
total 895014 737065
financial review continued strategic report corporate governance
annual report 2014 nostrum oil  gas plc 55
financial report regulatory information additional disclosures
cost of sales increased by us480 million or 202 to 
us2862 million in the year ended 31 december 2013 from 
us2382 million in the year ended 31 december 2012 
primarily due to an increase in depreciation depletion and 
amortisation royalties government profit share materials 
and supply expenses and changes in stock partially offset 
by a decrease in payroll and related taxes well workover 
costs and repair and maintenance expenses the increase 
of 20 in cost of sales is in line with the increase in revenue 
in 2013 of 21 compared to 2012 on a boe basis cost 
of sales decreased marginally by us05 or 286 to 
us1698 in the year ended 31 december 2013 from 
us1748 and cost of sales net of depreciation per boe 
decreased by us012 or 120 to us992 in the year 
ended 31 december 2013 from us1004 in the year 
ended 31 december 2012
depreciation depletion and amortisation increased by 
174 or us176 million in the year ended 31 december 
2013 to us1190 million from us1014 million in the 
year ended 31 december 2012 the increase is due to an 
increase of production without a similar increase in proved 
developed reserves during the period
royalty costs are calculated on the basis of production 
and market prices for the different products royalties rose 
152 to us394 million up from us342 million in the  
year ended 31 december 2013 whereas production was  
up 25 to an average production of 46178 boepd in 2013 
up from 36940 boepd in 2012 the average brent price  
for the year was down 06 to us10841 per bbl from  
us10903 per bbl in 2012
costs for government profit share increased by 
us228 million or 2886 to us307 million in the year 
ended 31 december 2013 from us79 million in the year 
ended 31 december 2012 mainly due to the fact that the 
cost oil balance which had been carried forward from 
previous years was depleted in august 2013 causing the 
government share to substantially rise in the second half 
of 2013
materials and supply expenses taken together with repair 
maintenance and other services and well workover costs 
increased 15 to us674 million in 2013 up from 
us684 million in 2012 the increase of 132 in materials 
and supplies from us53 million in 2012 to us123 million 
in 2013 is the result of repair and maintenance works 
in 2013 being focused on the facilities specifically the 
gas treatment facility and less so on wells 
general and administrative expenses decreased by  
us44 million or 68 to us604 million in the year 
ended 31 december 2013 from us649 million in the year 
ended 31 december 2012 due primarily to a decrease in 
social programme expenditures of us215 million in the 
year ended 31 december 2013 from us218 million in the 
year 31 december 2012 this decrease was related to the 
completion in 2012 of construction of a 37 kilometre asphalt 
road accessing the field site with no similar expense 
incurred in 2013 the decrease in social costs was primarily 
offset by increased management fees and professional 
services 
selling and transportation expenses increased by  
us181 million or 175 to us1217 million in the year 
ended 31 december 2013 from us1036 million in the year 
ended 31 december 2012 this was driven primarily by an 
increase of us154 million in loading and storage costs to 
us370 million in the year ended 31 december 2013 from 
us216 million in the year ended 31 december 2012 this 
increase was primarily driven by the rise in output of lpg 
and condensate volumes
finance costs decreased by us32 million to  
us436 million in the year ended 31 december 2013 from 
us468 million in the year ended 31 december 2012  
the decrease in costs was primarily driven by the raise  
of a new bond in november 2012 with significantly lower 
interest rate with which the first bond was repaid 
foreign exchange loss amounted to us636 thousand in 
the year ended 31 december 2013 compared to a gain  
of us776 thousand in the year ended 31 december 2012
other expenses increased to us256 million in the year 
ended 31 december 2013 from us66 million in the year 
ended 31 december 2012 the increase in other expenses 
was due to the increase in export duties paid by the group 
the export duties represent custom duties for export  
of crude oil and customs fees for its services such as 
processing of declarations temporary warehousing etc 
the kazakhstan custom authorities based on their 
interpretation of cis freetrade legislation have imposed 
custom duties on oil exports from kazakhstan to ukraine 
starting from december 2012 
profit before income tax amounted to a profit of  
us3620 million in the year ended 31 december 2013 
compared to a profit of us2824 million in the year ended 
31 december 2012 the higher profitability was driven 
primarily by the increased revenue due to the increase  
in output of the gas treatment facility strategic report
56 nostrum oil  gas plc annual report 2014
financial review continued
income tax expense increased to us1425 million in 
the year ended 31 december 2013 compared to  
us1204 million in the year ended 31 december 2012  
a 184 increase the increase in income tax expense was 
primarily due to the increase in profit before income tax
net income amounted to us2195 million in the year 
ended 31 december 2013 an increase of us575 million 
from us1620 million in the year ended 31 december 
2012 this higher profitability was driven by increased 
revenue from increased production of hydrocarbons
liquidity and capital resources – 20132012 comparison 
during the periods under review nostrum’s principal 
sources of funds were cash from operations and amounts 
raised under the 2010 notes and the 2012 notes its 
liquidity requirements primarily relate to meeting ongoing 
debt service obligations under the 2010 notes and the 
2012 notes and to funding capital expenditures and 
working capital requirements
cash flows
the following table sets forth the group’s consolidated 
cash flow statement data for the years ended 31 december 
2013 and 2012
 year ended  
 31 december
in thousands of us dollars 2013 2012
net cash flows from operating 
activities 358554 291825
net cash used in investing activities¹ 239020 269674
net cash used in financing activities 132350 50390
cash and equivalents  
at the end of the year 184914 197 730
1   net cash used in investing activities includes us30 million of bank deposits that 
are not included in cash and cash equivalents due to the longterm nature of the 
deposits and includes a redemption of us25 million that is not included in cash 
and cash equivalents due to the shortterm nature of the deposits at yearended 
31 december 2013
net cash flows from operating activities
net cash flows from operating activities were  
us3586 million for the year ended 31 december 2013  
as compared to us2918 million for the year ended  
31 december 2012 and were primarily attributable to
 adjusted by a noncash charge for depreciation depletion 
and amortisation of us1204 million and finance costs  
of us436 million
 attributable to i an increase in receivables of  
us126 million ii an increase in prepayments and  
other current assets of us68 million and iii an increase 
other current liabilities of us88 million
 net cash used in investing activities
the substantial portion of cash used in investing activities  
is related to the drilling programme and the construction of 
gas treatment units one two and three during the period 
from 1 january 2010 through 31 december 2013 cash used 
in the drilling programme represented between 43 and 
70 of total cash flow from investment activities during the 
period from 1 january 2010 through 31 december 2013 
cash used in the construction of gas treatment units one 
two and three represented between 14 and 40 of total 
cash flow from investment activities together drilling and 
the construction of the gas treatment units represented 
between 57 and 92 of cash used for investment in 
property plant and equipment
net cash used in investing activities was us2390 million 
for the year ended 31 december 2013 due primarily to the 
drilling of new wells us1081 million costs associated 
with the third gas treatment unit and rostoshinskoye 
darjinskoye and yuzhnogremyachenskoye fields the 
placement of us300 million of cash deposits partially 
offset by the redemption of us250 million of shortterm 
bank deposits and the acquisition of probel for which  
a payment was made of us284 million on 30 december 
2013 nostrum oil  gas coöperatief ua signed a 
purchase agreement to acquire 100 of probel capital 
management nv see “related parties and related party 
transactions”
net cash used in investing activities was us2697 million 
for the year ended 31 december 2012 due primarily to the 
drilling of new wells us1162 million investments in the 
gas treatment facility us386 million us500 million 
shortterm bank deposits and costs associated with the first 
two units of the gas treatment facility and rostoshinskoye 
darjinskoye and yuzhnogremyachenskoye fields
net cash used inprovided by financing activities
net cash used in financing activities was us1324 million 
for the year ended 31 december 2013 primarily 
attributable to the payment of us632 million in 
distributions and the interest paid on the group’s 2010 
notes and 2012 notes
net cash provided by financing activities was  
us504 million for the year ended 31 december 2012 
primarily attributable to the receipt of proceeds of the 2012 
notes partially offset by the partial repurchase of the 2010 
notes at a premium and the payment of us595 million  
in distributions strategic report corporate governance
annual report 2014 nostrum oil  gas plc 57
financial report regulatory information additional disclosures
fiveyear summary
in millions of us dollars unless stated otherwise
2014 
audited
2013 
audited
2012
audited
2011
audited
2010
audited
revenue 7819 8950 7370 3008 1782
cost of sales 2219 2862 2382 708 539
gross profit 5600 6088 4988 2300 1243
general and administrative expenses 549 561 624 328 240
selling and transportation expenses 1223 1217 1036 354 17 0
finance costs 62 436 468 47 213
finance costs – reorganisation 296 – – – –
employee share option plan fair value adjustment 31 44 25 35 31
foreign exchange lossgain net 42 06 08 04 –
gain on derivative financial instruments 603 – – – 05
interest income 10 08 07 03 02
other expenses 498 256 66 79 11
other income 101 44 40 34 33
profit before income tax 3117 3620 2824 1490 608
income tax expense 1653 1425 1204 67 4 37 9
net income 1464 2195 1620 816 229
noncurrent assets 16986 14260 12516 11269 9650
current assets 5096 3348 3511 1793 1724
total assets 22082 17608 16027 13062 1137 6
equity 9176 8325 6951 5852 5007
noncurrent liabilities 11637 7936 7819 5997 5466
current liabilities 1269 1347 1257 1213 903
total equity and liabilities 22082 17608 16027 13062 1137 6
net cash flows from operating activities 3496 3586 2918 1322 990
net cash used in investing activities
1
3051 2390 2697 1037 1322
net cash fromused in financing activities 147 5 1324 504 47 4 397
profit margin  187 245 220 27 1 129
equityassets ratio  416 47 3 434 448 440
share price at end of period us
2
656 1300 1070 970 1230
shares outstanding ‘000s 188183 188183 188183 186762 185000
options outstanding ‘000s 2611 2912 2132 2868 2983
dividend per share us 035 034 032 – –
1 ifrs term based on indirect cash flow methodology
2  prior to 20 june 2014 the equity of the group was represented by gdrs 2014 end of period share price is calculated as 420 gbpshare x 15608 usgbp  656 usshare strategic report
58 nostrum oil  gas plc annual report 2014
risk management
identification and assessment of the group’s key risks 
the board acknowledges its responsibility for determining 
the significant risks which may potentially affect the group 
in achieving its strategic objectives a groupwide risk 
assessment is performed periodically to identify the  
nature and extent of such risks and determine respective 
mitigating actions
during 2013 the group formalised the director’s risk 
register which identified the risks and associated 
mitigating control activities and future actions these 
identified risks were aggregated and categorised into  
the following risk categories



based on this risk register and further analysis and 
discussions the executive management and the board 
periodically review previously identified significant risks 
update their likelihood of occurrence and potential impact 
and identify potential new significant risks emerging as a 
result of the changing environment these significant risks 
are discussed in more detail below in the section “principal 
risks and uncertainties”
risk assessment and management
the group has in place risk management processes and 
procedures and is currently in the process of formalising 
them into a risk management policy which will reflect the 
following interaction chart and key management principles
risk assessment and management
board
audit committee
executive management
internal audit manager
review and approval 
by the board
risks and mitigation measures validated  
with the executive management and 
presented to the audit committee for 
review there is also an ongoing review  
of the risks and controls in place to mitigate 
these risks by the audit committee
there is ongoing review  
of the risks and controls in 
place to mitigate these risks  
by the audit committee
senior management of group 
functions
senior management identify the key 
risks and develop mitigation actions
senior management of 
operating companies
local management create a register 
of their top ten risks and mitigation 
actions
as from january 2015 for the purposes of 
this internal risk procedure the company’s 
recently established executive committee 
will replace the executive management
internal audit manager who is the group’s 
risk manager consolidates the operating 
companies’ and group risks to compile the 
group’s risk register and key risks strategic report corporate governance
annual report 2014 nostrum oil  gas plc 59
financial report regulatory information additional disclosures
the risk management policy will contain a description of 
the risk management process consisting of the following 
cycle of coordinated activities
 to mitigate
 of occurrence
 developments in the reporting period
two new risks were identified to be significant in 2014
 significantly affect the value of the noncurrent assets 
of the group and its strategic objectives
 due to perceived practices in jurisdiction of operation
the following three risks assessed and disclosed in 2013 
as principal financial risks and uncertainties were removed 
from the list of significant risks in 2014 however these 
are addressed in the note “financial risk management 
objectives and policies” of the consolidated financial 
statements

the risk “gas sales price” assessed and disclosed as 
principal risks and uncertainties in 2013 was incorporated 
to another risk from the prior year “commodity price risk” 
due to their similar nature
the significant risks are presented overleaf grouped into 
the four abovementioned categories strategic report
60 nostrum oil  gas plc annual report 2014
principal risks and uncertainties
strategic risks description of risk risk management
development 
projects
the group’s planned development 
projects in particular gtu3 and well 
drilling are subject to customary risks 
related to delay noncompletion and 
cost overruns which could impact future 
production 
the group has engaged an experienced 
international project management firm to 
assist with its development of gtu3 and 
is contracting with reputable international 
equipment suppliers employing proven 
technologies for the project the timing and 
scope of the drilling programme is also 
tailored taking into account the states of the 
gtu3 project and the oil price development
commodity 
price risk
the group is exposed to the risk that 
its future earnings will be adversely 
impacted by changes in the market price 
of crude oil given that all sales prices 
of crude oil and condensate are based 
on market prices crude oil prices are 
influenced by factors such as opec 
actions political events and supply and 
demand fundamentals 
the group could also be compelled by 
governmental authorities purportedly 
acting based on kazakh legislation to sell 
its gas domestically at prices determined 
by the kazakh government which could 
be significantly lower than prices which 
the group could otherwise achieve
the group’s hedging policy is that upon 
entering into longer term nonscalable capital 
expenditure commitments it will hedge up to 
a maximum of 70 of its liquids production 
currently the hedge in place is in the order of 
30 of the liquids production the instrument 
the group has been employing is a zerocost 
cappedcollar such a contract fixes the floor 
and ceiling price at a certain predetermined 
level with the limitation of the ceiling price at 
a certain range the group intends to maintain 
the same hedging policy going forward 
in relation to the gas sales price based  
on the terms of its psa and applicable law the 
group does not believe that such legislation 
is applicable in its subsoil use of the 
chinarevskoye field and has conveyed such 
a view to the kazakh government
operational risks description of risk risk management
single revenue 
source and 
business 
interruption
the group’s activities in the chinarevskoye 
oil and gas condensate field are currently 
the group’s sole source of revenue
in 2013 the group acquired subsurface use 
rights for three oil and gas fields near the 
chinarevskoye field in 2014 the group 
developed a work programme for the initial 
drilling of one well in each of these fields 
before the end of 2015 due to the depressed 
oil price environment it is currently proposed 
to drill one of these wells in 2015 and scale 
back drilling of the other two wells the group 
also has a team of dedicated specialists who 
assess further possible acquisitions of oil 
and gas fields and assets 
estimation of  
oil and gas 
reserves
the group is subject to the risk that if 
there are inaccurate assessments and 
overstatement of the oil and gas reserves 
the group’s noncurrent assets and 
goodwill may be overstated or impaired 
this may also be a consequence of 
unsuccessful exploration of the new 
fields and may also result in inappropriate 
decisionmaking
the group has a department of highly skilled 
geologists who perform periodic assessment 
of the oil and gas reserves in accordance 
with international standards on reserve 
estimations the results of the assessments 
are audited by the group‘s independent 
reserve auditor ryder scott strategic report corporate governance
annual report 2014 nostrum oil  gas plc 61
financial report regulatory information additional disclosures
compliance risks description of risk risk management
subsoil use 
agreements
the group may have disagreements 
with the kazakh government regarding 
its subsoil operations or compliance with 
the terms of its subsoil use agreements 
the group believes that it is in full compliance 
with the terms of its subsoil use agreements 
and maintains an open dialogue with kazakh 
governmental authorities in this regard in the 
event of any noncompliance the group will 
pay any applicable penalties and fines
environmental 
compliance
the legal framework for environmental 
protection and operational safety is 
not yet fully developed in kazakhstan 
and given the changing nature of 
environmental regulations there is a 
risk that the group will not be in full 
compliance with all such regulations 
at all times 
the group has strengthened its hse 
department over the past 18 months is 
regularly developing its internal hse policies 
and has performed its first audit of supplier 
compliance with such policies the group 
also regularly commissions independent 
environmental audits to monitor its 
compliance and best practice in this area 
perceived risk of 
noncompliance 
with antibribery 
legislation
there is a risk that the group’s employees 
will unintentionally or deliberately take 
actions prohibited by antibribery 
legislation given the perceived 
heightened risk in the jurisdiction in 
which the group operates
the group has adopted an antibribery 
and corruption policy and has included 
a provision on this subject in the group’s 
code of conduct and conducted training for 
employees in relation to their obligations in 
this area
financial risks description of risk risk management
tax law 
uncertainty
the uncertainty of application including 
retroactive application of tax laws and 
the evolution of tax laws in kazakhstan 
create a risk of additional payments of 
tax from assessments which the group 
believes are inapplicable to it 
the group regularly challenges either with 
the kazakh tax authorities or through the 
kazakh courts tax assessments that it believes 
are inapplicable to it either pursuant to the 
terms of its subsoil use agreements or 
applicable law 
going concern 
and liquidity risk
the group is subject to the risk of 
encountering difficulties in raising funds 
to meet commitments associated with 
its financial liabilities and respective 
inappropriateness of going concern 
assumptions 
liquidity requirements are monitored on 
a monthly basis and management ensures 
that sufficient funds are available to meet 
any commitments as they arise the treasury 
policy requires the group to maintain a 
minimum level of cash of us50 million 
the risks listed above do not comprise all those associated with the group’s business and are not set out in any order of 
priority additional risks and uncertainties not presently known to management or currently deemed to be less material 
may also have an adverse effect on the group’s business the risks listed above are continuously monitored by the 
management team and assessed when making business decisions
this strategic report is approved by the board
kaiuwe kessel janru muller
chief executive officer chief financial officer
24 march 2015 24 march 2015  62 nostrum oil  gas plc annual report 2014
committed to 
excellence in  
our governance
corporate governance
62 nostrum oil  gas annual report 2014
corporate governance
63  chairman’s overview
64  board of directors
66  nostrum oil  gas plc management team
66  zhaikmunai llp management team
68  corporate governance approach
74  audit committee report
80   nomination and governance committee report
81  remuneration committee report
82  annual report on remuneration
87  directors’ remuneration policy
92  directors’ report strategic report corporate governance
annual report 2014 nostrum oil  gas plc 63
financial report regulatory information additional disclosures
chairman’s overview
dear shareholder
nostrum attaches a high priority to good practice in 
corporate governance the system by which the group 
is directed and managed and is committed to 
implementing good corporate governance practices 
in the interests of all of our stakeholders adopting 
and implementing good corporate governance is 
a core principle of the group’s relations with investors 
employees customers suppliers and business partners
i am pleased with the way in which the group has 
embraced and addressed the demands of the additional 
regulatory obligations made applicable to the group 
as a result of the company moving to a premium listing 
on the london stock exchange in particular as regards 
the uk corporate governance code published by the 
financial reporting council in the few areas where 
nostrum does not fully comply with the uk corporate 
governance code the company has valid reasons 
for such noncompliance which are explained in this 
section of the annual report and on the governance 
section of nostrum’s website httpwww
nostrumoilandgascomencorporategovernance
the scope of activity of our board committees has 
changed significantly over the past 12 months as they 
have worked to fulfil their obligations under their terms 
of reference and those under the relevant provisions of 
the uk corporate governance code and other regulatory 
requirements applicable to the company as a result 
of its premium listing 
in particular the nomination and governance committee 
has discussed and considered issues of succession 
planning and suitable profiles for future board candidates 
and the remuneration committee has focused a great 
deal of its attention this year on developing the 
company’s first remuneration policy which will be put 
to a shareholder vote at the agm this year in line with 
recently enacted regulations and our first remuneration 
report
the board and the group as a whole continuously take 
into account corporate governance considerations 
when making plans and setting out the group’s strategy 
and priorities
as a result of the premium listing both sir christopher 
codrington bt and mark martin joined the board on  
19 may 2014 as nonexecutive directors i am delighted  
to welcome sir christopher and mark to the board 
i am fortunate to act as chairman of a board of directors 
possessing diverse sectoral experience ages and 
geographic and ethnic backgrounds we value diversity 
on the board and we will seek to foster diversity including 
gender diversity going forward we believe that the 
directors have the appropriate mix of skills experience 
independence and knowledge to enable them to 
discharge their duties and responsibilities effectively 
we pride ourselves on taking a practical rather than 
formalistic approach to corporate governance as we 
endeavour to act in the interests of all our stakeholders  
i am pleased with the way in which the group has 
complied with the higher standards of corporate 
governance applicable to it since the premium listing  
and am looking forward to maintaining our good 
standards of corporate governance during the year ahead
frank monstrey
chairman
“ i am pleased with the way in which the group has 
embraced and addressed the demands of the 
additional regulatory obligations” corporate governance
64 nostrum oil  gas plc annual report 2014
board of directors
frank monstrey
executive chairman


chairman of nostrum’s 
predecessor entities since 2004 
appointed as director and 
chairman of nostrum oil  gas 
plc on 3 october 2013 
other current appointments
probel capital management nv 
now called nostrum services nv 
oostendse investerings 
vennootschap nv magorium 
nv tensor holding vof tensor 
property investments sarl 
expression inc septemium 
investments sa tensor capital 
partners lp tensor carry 
holdings llc tensor asset 
management bv thyler 
holdings limited claremont 
holdings limited camden 
holdings ltd secap holdings 
ltd roding investments sa 
orior trading ltd selag holdings 
sa tensor property investments 
sarl nedmac bv thyler holdings 
bv septinvest bv sepol holdings 
gmbh ruspetro plc crest 
capital management nv
 the chairman has no other 
signiﬁcant commitments
other positions
1
 executive officer of probel 
capital management nv now 
called nostrum services nv  
a private equity and asset 
management firm based in 
belgium specialising in long 
term capital management in 
emerging markets
 economics from the university 
of leuven kul belgium
board committees

kaiuwe kessel
chief executive officer


director of nostrum’s 
predecessor entities since 2004 
appointed as director of nostrum 
oil  gas plc on 3 october 2013
other current appointments
belgeras sa – director 
gervanca investments sarl –  
director cavendish 
other positions
1
 france’s north african ep 
division
 of erdas erdöl gmbh an oil and 
gas company owned by gaz de 
france and director and 
chairman of the board of 
kazgermanai
 state university of oil and gas
board committees

janru muller
chief financial officer


appointed as chief financial 
officer of nostrum’s predecessor 
entity on 16 november 2007 
and as a director of nostrum oil 
 gas plc on 3 october 2013
other current appointments
telco bv – director tenggara 
bv – director
other positions
1
 capacities at probel capital 
management nv now called 
nostrum services nv 
overseeing nostrum’s adoption 
of ifrs and the implementation 
of sap
 managing director of axio 
systems an information 
technology company
 consulting
 utrecht municipal institute of 
technology and an mba degree 
from the university of leuven 
kul
board committees

eike von der linden
senior independent 
nonexecutive director


appointed as a director of 
nostrum oil  gas group ltd  
on 16 november 2007 and as  
a director of nostrum oil  gas 
plc on 19 may 2014
other current appointments
linden advisory  consulting 
services – managing director 
appleton resources ltd – 
director member of the board 
will be terminated end 2014 
jordan energy and mining ltd 
– technical director schullermann 
und partner ag – member of 
supervisory board adveq real 
assets funds – member of expert 
advisory panel
other positions
1
 of linden advisory and 
consulting services
 adviser to financial institutions 
for equity investments and 
mezzanine and debt funding 
project finance in the field 
of natural resources
 economics from the technical 
university of clausthal
board committees


1 in chronological order strategic report corporate governance
annual report 2014 nostrum oil  gas plc 65
financial report regulatory information additional disclosures
atul gupta
independent 
nonexecutive director


appointed as a director  
of nostrum oil  gas group ltd 
on 30 november 2009 and as 
a director of nostrum oil  gas 
plc on 19 may 2014
other current appointments
seven energy international 
limited – nonexecutive director
vetra energy – nonexecutive 
director
other positions
1
 
2008 and chief operating 
officer 19992006 of burren 
energy
 international upstream oil and 
gas businesses charterhouse 
petroleum petrofina monument 
and burren energy
 engineering cambridge 
university and masters in 
petroleum engineering heriot 
watt university edinburgh
board committees

piet everaert
nonexecutive director


appointed as a director of 
nostrum oil  gas group ltd 
on 16 november 2007 and as 
a director of nostrum oil  gas 
plc on 19 may 2014
other current appointments
bvba piet everaert – director 
vwew advocaten vof – partner
other positions
1
 vwew advocaten law firm
 brussels bar active in the field 
of belgian business law
 leuven kul 1984 and from 
the college of europe bruges 
1985 belgium
board committees

pankaj jain
nonexecutive director


appointed as a director of 
nostrum oil  gas group ltd 
on 26 november 2013 and as 
a director of nostrum oil  gas 
plc on 19 may 2014
other current appointments
kazstroyservice global bv – 
chief executive officer abn 
heritage developers private 
limited – director rmg properties 
private limited – director
other positions
1
 officer of the kazstroyservice 
kss group
 experience in epc engineering 
procurement and construction 
projects in india kazakhstan 
the middle east and the far 
east
 engineering college trichy 
india beng hons in civil 
engineering major oil and gas 
infrastructure
board committees

sir christopher 
codrington bt
independent 
nonexecutive director


appointed as a director on  
19 may 2014
other current appointments
navarino services limited – 
director
other positions
1
 board and senior management 
experience in the oil and gas 
sector and the hospitality and 
other industries 
 texas developing prospects in 
various oil and gas fields for 
cog inc texas general 
resources inc texbrit 
corporation inc and whitehall 
energy limited
 – dipafm
board committees
 chairman

mark martin
independent 
nonexecutive director


appointed as a director on 
19 may 2014
other current appointments
none
other positions
1
 experience with barclays  
baring securities and ing 
where he was global head 
of equity capital markets from 
20032011
 executive officer of exillon 
energy plc in moscow
 university with a degree in 
social and political sciences
board committees

1 in chronological order corporate governance
66 nostrum oil  gas plc annual report 2014
nostrum oil  gas plc management team
thomas hartnett
general counsel and 
company secretary


appointed as group general 
counsel of the nostrum group 
on 5 september 2008 and as 
company secretary of nostrum 
oil  gas plc on 3 october 2013
other positions
 with the law firm white  case 
llp where he was a partner  
and specialised in crossborder 
corporate and ma 
transactions based in the firm’s 
new york istanbul london 
brussels and bangkok offices
 corporate counsel for 
intercontinental hotels group 
formerly bass hotels  resorts
 
degree in comparative and 
developmental politics from the 
university of pennsylvania and 
a juris doctor degree from new 
york university school of law

see biographies of executive directors frank monstrey kaiuwe kessel and janru muller on page 64
jan laga
head of ma


appointed deputy ceo of 
nostrum on 1 january 2010
other positions
 group management picanol 
berry group ackermans  van 
haaren and koramic
 electromechanical engineering 
university of leuven and an 
mba insead
tom richardson
group head of  
corporate finance


 appointed as group head 
of corporate finance on 
31 august 2011
other positions
 banking covering the emerging 
markets and has been involved 
in raising over us5 billion for 
emerging markets companies  
in the capital markets
 consultancy work across the 
emerging markets being 
involved in over us125 billion 
of financings
alexei erber
head of business 
development


 appointed as director of 
geology and reservoir 
management of zhaikmunai llp 
in october 2007
other positions
 experience with the geological 
and exploration departments of 
erdgas erdölgommern gmbh 
and gaz de france
 state university of oil and  
gas geology and geology 
engineering and the ernst 
moritz arndt university of 
greiswald mathematical 
methods in geology
heinz wendel
general director 
zhaikmunai llp


 appointed as chief operating 
officer of zhaikmunai llp in 
january 2012 and as general 
director of zhaikmunai llp  
in august 2013
other positions
 
in oil  gas exploration and 
production primarily as an  
oil and gas engineer
 and technical capacities in 
germany poland russia and 
kazakhstan with gdf suez ep 
east german erdölerdgas 
gommern eeg and others
 institute of baku azerbaijan
gudrun wykrota
chief financial officer 
zhaikmunai llp


appointed as chief financial 
officer of zhaikmunai llp in 
april 2010
other positions
 field head of asset 
management upstream 
gazprom germania gmbh 
finance and administration 
manager gaz de france 
produktion exploration 
deutschland gmbh
 engineering and economy 
from moscow geological 
exploration university and  
a certificate in international 
accounting from the german 
chamber of industry and 
commerce in berlin germany
zhaikmunai llp management team strategic report corporate governance
annual report 2014 nostrum oil  gas plc 67
financial report regulatory information additional disclosures
zhaikmunai llp management team
jörg pahl
drilling director 
zhaikmunai llp


gernot voigtländer
director of geology and 
reservoir management

 skills and experience
 geology and reservoir 
management in 2013
 exploration  production 
deutschland gmbh and gained 
experience in petroleum 
geology from 1984
 experience in the exploration 
appraisal development and 
production of hydrocarbons
 technical university of berlin 
and degree in exploration 
geology from moscow institute 
of exploration geology russia
berik brekeshev
commercial director 
zhaikmunai llp


 appointed as commercial 
director of zhaikmunai llp in 
january 2010
other positions
 experience in the oil and  
gas industry in kazakhstan
 with starleigh ltd tallahassee 
holdings limited and jsc 
nngre and commercial roles at 
nelson resources kazakhoil 
aktobe buzachi operating 
atlas global investment and 
westernsiberian drilling 
company
 marketing from the maastricht 
school of management
 appointed as zhaikmunai llp 
drilling director in 2005
other positions
 more than 10 years in various 
positions in the drilling
workover technology 
department at erdgas erdöl 
gmbh and the operation and 
production department at the 
ep division of gaz de france
 technical school for deep 
drilling techniques stralsund 
and from the technical 
university tu bergakademie 
freiberg germany drilling 
technology and fluid mining
gernot voigtländer
director of geology and 
reservoir management


appointed as director of geology 
and reservoir management 
in 2013
other positions
 exploration  production 
deutschland gmbh and gained 
experience in petroleum 
geology from 1984
 experience in the exploration 
appraisal development and 
production of hydrocarbons
 technical university of berlin 
and degree in exploration 
geology from moscow institute 
of exploration geology russia
amankeldy sanatov
acting operations 
director


appointed as acting operations 
director in 2013
other positions
 and gas fields and oil and gas 
geology from saraov 
chernyshevsky state university
 positions within the company 
including as site manager 
manager of the oil and gas 
production department and 
field superintendent for 
zhaikmunai llp
zhomart darkeev
administrative director


other positions
  gas drilling as assistant driller 
and kazakhgas state holding 
company as a leading reservoir 
engineer at zhaikmunai llp mr 
darkeev has held the positions 
of assistant general director 
chief administrative manager 
engineer manager and deputy 
general manager
graduate of furmanov 
secondary school with further 
education completed at the 
ivanofrankivsk institute of oil 
and gas with a specialisation  
in drilling of oil and gas wells
vyascheslav druzhinin
government authorities 
relations director

 other positions
 the polytechnical institute 
tomsk russia and the ussr 
ministry of geology
 training at the hughes 
christensen company 
houston texas
 various positions in the field 
development department of 
kazakhgaz state holding 
company state holding 
company “zharyk” and 
volkovgeologia kggp corporate governance
68 nostrum oil  gas plc annual report 2014
corporate governance approach
introduction
corporate governance is very important to nostrum 
and the board promotes high standards of corporate 
governance the company fully complies with all provisions 
of the uk corporate governance code the “code”  
with the exception of those matters set out on page 71 
in respect of which the reasons for the divergence from  
the code position is explained
the board considers all of its nonexecutive directors 
other than piet everaert and pankaj jain to be independent 
within the meaning of such term as defined in the code 
piet everaert and pankaj jain are not deemed to be 
independent as a result of having been nominated by 
claremont holdings cv a dutch limited partnership 
indirectly controlled by frank monstrey the chairman of 
the company and his spouse and mayfair investments bv 
respectively who are the two largest shareholders in the 
company
the code recommends that the board should appoint one 
of its independent nonexecutive directors to act in the 
capacity of senior independent director eike von der linden 
serves in such capacity as the board’s senior independent 
director
the board has appointed an audit committee a 
remuneration committee and a nomination and 
governance committee the members of these committees 
are appointed principally from among the independent 
directors and all appointments to these committees are for 
a period of one year the terms of reference of the various 
committees have been drawn up in accordance with the 
provisions of the code
each committee and each director has the authority to 
seek independent professional advice where necessary 
to discharge their respective duties in each case at the 
company’s expense in addition each director and 
committee has access to the advice of the company 
secretary thomas hartnett
governance framework
board 
nomination  
 governance 
committee
board 
remuneration 
committee
board audit 
committee
board
chief executive officer
executive committee
how the board works
the board schedules four regular meetings during the 
course of the year and in addition meets when appropriate 
to review trading performance budgets and funding set 
and monitor strategy examine acquisition opportunities 
and report to shareholders
the board has a formal schedule of matters reserved for 
its decision which cover decisions relating to

 strategic report corporate governance
annual report 2014 nostrum oil  gas plc 69
financial report regulatory information additional disclosures
the schedule is reviewed annually and is available on 
our website other specific responsibilities are delegated  
to board committees
the board is responsible for considering all important 
management and policy matters in relation to the company 
and the group and has the powers and duties set out in 
the relevant laws of england and wales and the company’s 
articles of association 
the key responsibilities of the board include
 resources are in place for the company to meet its 
objectives 
 obligations to all shareholders are understood and met
board composition
the board consist of nine directors as at 31 december 
2014 in addition to the chairman frank monstrey there 
were two executive directors and six nonexecutive 
directors
within the board the roles of chairman and chief executive 
are separate with each having distinct and clearly defined 
responsibilities the chairman frank monstrey is 
responsible for leadership of the board and for ensuring its 
effectiveness in all aspects of its role the chairman sets the 
agenda for board meetings in consultation with the chief 
executive the chief financial officer and the general counsel 
and company secretary the chairman is also responsible 
for ensuring that the directors receive accurate timely and 
clear information and that there is effective communication 
with the directors the chief executive provides leadership 
to the group which enables the successful planning and 
execution of the objectives and strategies agreed by the 
board the chief executive is also responsible for care  
of the group’s assets and jointly with the chairman 
representation of the group to third parties
eike von der linden as senior independent nonexecutive 
director provides a sounding board for the chairman and 
serves as an intermediary for the other directors when 
necessary he is available should the need arise to convey 
concerns to the board other than through the chairman  
or the chief executive
the board’s nomination committee and governance 
committee keeps the balance independence and 
succession plans of the board under review so as to 
maintain an appropriate balance of skills and experience 
within the company and on the board in accordance 
with the uk corporate governance code 
board 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 in the board the board is comprised of individuals 
with diverse sectoral experience ages and geographic 
and ethnic backgrounds
appointment and tenure
all executive directors have service agreements with the 
company and all nonexecutive directors have letters of 
appointment with the company for all executive directors 
there is no term limit on their services as the company 
proposes all executive directors for annual reelection 
at each subsequent agm of the company 
the appointment of each of the nonexecutive directors 
commenced on 19 may 2014 each appointment is for an 
initial term of three years subject to being reelected as 
a director at each subsequent agm of the company the 
letters of appointment for nonexecutive directors do not 
set a fixed time commitment as it is anticipated that the 
time required of directors may fluctuate depending on 
demands of the company’s business and other events  
it is expected that directors will allocate sufficient time to 
the company in order to discharge their duties effectively 
copies of the service agreements of the executive 
directors and the letters of appointment for the 
nonexecutive directors are available for inspection at 
the company’s registered office 
whilst there are currently no women on nostrum’s board 
gender diversity is important to us the nomination and 
governance committee will be taking this into account 
when considering succession planning and suitable 
profiles for board candidates corporate governance
70 nostrum oil  gas plc annual report 2014
corporate governance approach continued
introduction
diversity and talent
 diversity
sustainability
 practices
shareholder focus
 shareholders
 shareholders
 financials
 officer’s report
 
full year results
 business risks
 operational risks
 governance
 
and evaluation
 reports
 governance  
updates
 
membership
business strategy
 operations report
being responsible 


business performance
 
in local markets 
 board
board activities in the 2014 financial year
board activities are structured to assist the board in 
achieving its goal to support and advise executive 
management on the delivery of the group’s strategy 
within a transparent governance framework
the diagram below shows the main areas of focus  
by the board during 2014 strategic report corporate governance
annual report 2014 nostrum oil  gas plc 71
financial report regulatory information additional disclosures
board evaluation 
in line with the requirements of the code the company 
aims to review board effectiveness annually with board 
effectiveness also being reviewed through an external 
performance evaluation every three years 
in 2014 a detailed questionnaire was prepared by the 
company secretary and distributed to directors for their 
feedback regarding the board’s performance and 
effectiveness the directors were asked to provide their 
views on a range of subjects including multiple questions 
in four principal areas leadership effectiveness 
accountability and engagement
key findings and action items coming out of the 
selfevaluation include the following
 the board in board meetings had not been distributed 
sufficiently in advance of meetings and that 
communication between board meetings could be 
improved the company has entered into a contract  
with an external service provider for the creation of  
a board portal designed to improve the efficiency of  
the informationsharing process and timeliness of the 
distribution of board materials and other information 
and provide an additional platform for communication 
between directors 
 management and internal control systems function could 
be improved the company hired an internal audit 
manager in 2014 who is responsible for this function 
which includes providing the board with quarterly internal 
audit reports in addition the hiring of an internal audit 
manager at the level of the company’s principal operating 
company has been adopted as an action item for 2015 
 formally agreed goals and objectives for the review and 
monitoring of management’s performance this has  
been adopted as an action item for 2015
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 
participate in discussions with members of the board and 
representatives of major shareholders in order to obtain a 
good understanding of the challenges and opportunities 
faced by the group directors are often given the 
opportunity to discuss their training and development 
needs and to make recommendations to the chairman 
regarding topics on which they would like to receive 
training 
the company held a reservoir management workshop on 
17 february 2014 in berlin which covered topics such as 
production performance key subsurface events in 2013 
geology and reservoir engineering and the group’s drilling 
and wellwork plan for 2014 in relation to the chinarevskoye 
field in addition a training day was held for directors 
on 24 march 2014 in frankfurt germany which covered 
corporate governance topics including inside information 
and compliance with the companies act 2006 the listing 
rules and the disclosure and transparency rules 
in response to requests from directors a training day was 
also organised for 19 march 2015 and covered business 
and governance topics including but not limited to i crisis 
management ii self evaluation of director’s performance 
and iii regulatory updates
shareholder engagement
nostrum is in regular contact with its shareholders 
we regularly issue press releases we attend investor 
conferences globally and our quarterly halfyearly and 
annual results are always followed by an investor call we 
are available for shareholder meetings with management 
and welcome enquiries we are continually reacting to 
feedback to ensure our communications are in line with 
requests extensive information is available on our website 
where shareholders or those with an interest in the  
group can log their details to receive email updates all 
shareholders are encouraged to attend the agm to discuss 
the progress of the group
availability of the relevant corporate governance code
the uk corporate governance code is publicly available 
on the website of the uk financial reporting council
uk corporate governance code compliance
nostrum complied throughout 2014 with the provisions 
of the code except in the following aspects
a31 the chairman does not meet the independence 
criteria set out in b11 of the code in part given his 
executive position in the company companies owned 
and controlled by the chairman acquired the group’s 
assets outright in 2004 and the chairman has been a 
leading driver behind the successful development of the 
business since that date as such the other members of the 
board consider that the chairman’s continued involvement 
as an executive director is important for the future of the 
business given the chairman’s experience and expertise 
in the development of the group’s oil and gas assets 
in kazakhstan corporate governance
72 nostrum oil  gas plc annual report 2014
corporate governance approach continued
introduction
b12 given that the chairman fulfils an executive role 
and piet everaert and pankaj jain are not categorised as 
independent directors as a result of having been nominated 
by claremont holdings cv “claremont” and mayfair 
investments bv “mayfair” respectively five of the nine 
directors on the board are not considered independent for 
the purposes of the code mayfair whilst not considered 
independent for the purposes of the code is independent 
of the other shareholders in the company mayfair has 
no alignment with any other major shareholder and hence 
mayfair’s nominee to the board is considered to be 
independent in character and judgement with no 
relationships that directly affect his judgement and no 
single group is therefore able to exercise majority influence 
over the board as a whole 
in order to provide additional protections to the company 
in respect of these areas of noncompliance with the code 
in 2014 the company entered into relationship agreements 
with each of claremont and kazstroyservice global bv 
“kss global” on 30 january 2015 mayfair an affiliate 
of kss global acquired 48333300 ordinary shares in the 
company from kss global and pursuant to a deed of 
adherence of the same date undertook to the company 
to be bound by the terms of the relationship agreement 
previously signed between the company and kss global 
and to observe and perform all of the provisions and 
obligations of such relationship agreement in so far as 
they fall to be observed or performed on or after the date 
of the transfer
policies
the company has adopted a share dealing code which 
incorporates the model code as published in the listing 
rules and applies to the directors senior management 
and other relevant employees of the group 
bribery and corruption are significant risks in the oil and gas 
industry and as such the company operates a groupwide 
antibribery and corruption policy which applies to all 
group employees and contractor staff the policy requires 
annual bribery and corruption risk assessments riskbased 
due diligence on all parties with whom the company does 
business appropriate antibribery and corruption clauses  
in contracts and the training of personnel in antibribery 
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
in addition the company has 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
board committees
the board has a nomination and governance committee  
an audit committee and a remuneration committee further 
details on each of these committees can be found in their 
reports on pages 74 to 91 the terms of reference of each  
of these committees can be found on our website at  
httpwwwnogcomen
the committees are provided with all necessary resources 
to enable them to undertake their duties in an effective 
manner the company secretary acts as secretary to the 
committees the minutes of the committee meetings are 
circulated to all directors
meetings of the board and its committees are scheduled 
for march may august and november each year directors 
unable to attend a board meeting because of another 
engagement are provided with the briefing materials and 
can discuss issues arising in the meeting with the chairman 
or the chief executive in addition to scheduled board 
meetings there are generally other ad hoc meetings called 
to deal with specific matters as and when they arise
attendance at meetings of the board and its committees 
in the 2014 financial year
 board
 audit 
 committee
 remuneration  
 committee
 nomination
 committee
a b a b a b a b
executive directors
frank monstrey 7 7 1 1
kaiuwe kessel 7 7
janru muller 7 7
nonexecutive directors
eike von der 
linden
14
 6 6 4 4 2 2 1 1
piet everaert
4
6 6 2 2
atul gupta
4
6 4 4 2
pankaj jain
4
6 3
mark martin
24
 6 6 2 2
sir christopher 
codrington bt
34
 6 5 4 4 2 2 1 1
a  total number of meetings the director was eligible to attend
b  total number of meetings the director did attend
1  chairman of the audit committee
2  chairman of the remuneration committee
3  chairman of the nomination and governance committee
4 appointed as nonexecutive director of nostrum oil  gas plc on 19 may 2014
the corporate governance approach has been approved 
by the board
kaiuwe kessel janru muller
chief executive officer chief financial officer
24 march 2015 24 march 2015 strategic report corporate governance
annual report 2014 nostrum oil  gas plc 73
financial report regulatory information additional disclosures corporate governance
74 nostrum oil  gas plc annual report 2014
audit committee report
letter from the chairman
eike von der linden
chairman audit committee  
senior independent  
nonexecutive director
chairman’s introduction 
in 2014 the committee continued to focus on the 
appropriateness of the group’s financial reporting 
which involved reviewing the adequacy of related 
disclosures reviewing the group’s assessment and 
management of key risks reviewing the group’s 
systems of internal control establishing an internal 
audit function and overseeing the relationship with 
ernst  young llp  the group’s external auditor  
the committee has also focused on the effect that  
the significant decline in oil prices is likely to have  
on any of the committee’s key areas of focus
i would like to take this opportunity to formally 
welcome sir christopher codrington bt who joined 
the committee on 19 may 2014 and who brings with 
him a wealth of experience in the oil and gas industry
the committee has met four times during 2014 
as chairman of the committee i also meet regularly 
with our external auditor and the group’s internal audit 
manager to obtain their independent views on the 
group’s potential risk areas and to discuss any areas  
of concern identified by the committee subsequent  
to the monthly management reports discussions took 
place between the audit committee members and 
conclusions have been drawn and when considered 
necessary recommendations have been made to the 
executive management
meetings of the committee usually take place just  
prior to a board meeting to maximise the efficiency  
of the committee’s interaction with the board and  
as chairman of the committee it is my responsibility  
to report to the board on key topics discussed at 
committee meetings to ensure that all directors are 
informed of the committee’s work
i believe that the committee consists of members with  
the correct balance of skills and experience to allow the 
committee to perform its tasks effectively whilst being 
supported by management external auditor and the 
group’s internal audit manager
eike von der linden 
chairman audit committee
senior independent nonexecutive director  strategic report corporate governance
annual report 2014 nostrum oil  gas plc 75
financial report regulatory information additional disclosures
role and responsibilities of the audit committee 
the primary role of the committee is to assist the board 
in fulfilling its responsibilities in achieving the group’s 
strategic objectives and protecting stakeholder interests
the key areas of responsibility of the committee are 
categorised as follows and are described in more detail in 
the committee terms of reference available on the group’s 
website at wwwnogcouk
 financial statements as well as formal announcements 
of the financial results and other information
 and risk management systems including impairment 
testing by assessing the consistency and clarity of related 
disclosures and conducting operating and financial 
reviews 
 requirements and the group’s code of conduct
 internal audit function 
 auditor and oversee their appointment remuneration  
and terms of engagement whilst continually assessing 
their independence and objectivity and 
 effectiveness of the external audit
the members of the committee during 2014 were 
name
nostrum 
oil  gas plc
membership 
start date
eike von der linden 19 may 2014
atul gupta 19 may 2014
sir christopher codrington bt 19 may 2014
the membership of the committee has been selected 
with the aim of providing a wide range of financial and 
commercial expertise necessary to meet its responsibilities 
and all members of the committee are considered to have 
the required recent and relevant financial experience
the committee meets on a quarterly basis or additionally 
as and when required the chief financial officer and the 
internal audit manager are also invited to the meetings 
together with the external auditor 
in addition to these activities on a monthly basis the 
members of the committee are updated by management 
and the internal audit manager on key issues and 
developments including the status of the group’s strategic 
initiatives financial performance risk management and 
internal controls in the last quarter of 2014 the oil price 
impact on the financial results were assessed by the audit 
committee
activities of the audit committee during the year
below is a summary of the major activities of the committee 
during the year which include compliance with corporate 
governance standards financial reporting external audit 
internal audit internal controls and risk management 
significant issues and related actions and the committee 
review
the committee held four meetings in 2014 and three 
between the beginning of 2015 and the publication date  
of this annual report committee members were present 
in person at four of the meetings while three meetings 
were conducted by conference call
compliance with corporate governance standards 
nostrum’s approach to corporate governance is primarily 
based on the uk corporate governance code published 
by the financial reporting council frc and the listing 
rules of the uk listing authority 
as of 31 december 2014 nostrum complied with all the 
principles and provisions of the uk corporate governance 
code in relation to the work of the committee 
the chairman of the committee and external auditor 
participated in an annual reporting and accounts workshop 
organised by the finance team together with other 
departments in october 2014 as part of the workshop 
an experienced partner from ernst  young llp gave 
an overview of best practice strategic and governance 
reporting as well as changes in related standards
nostrum has also established a group whistleblowing 
policy and has appointed two compliance liaison officers 
one russian speaking compliance liaison officer based 
in kazakhstan and a further dutch and english speaking 
compliance liaison officer based in brussels to ensure 
that all group employees have access to someone who 
can provide them with support and guidance on their 
rights and obligations regarding whistleblowing the 
audit committee has close contact with the compliance 
liaison officers
financial reporting
while reviewing the draft quarterly and annual financial 
statements as well as the annual report the committee 
focused on challenging 
 disclosures made with financial reporting standards and 
relevant corporate governance requirements 
 management which are discussed in more detail in the 
section entitled “significant issues and related actions” 
below and
 balanced and understandable and provides the 
information necessary for shareholders to assess the 
group’s performance business model and strategy  corporate governance
76 nostrum oil  gas plc annual report 2014
audit committee report continued
any questions and comments arising from such review 
as well as significant issues raised by the external auditor  
were discussed with management at meetings of the 
committee subsequently based on its overall assessment 
the committee recommended that the board approve 
the financial statements 
the committee continuously provides feedback to 
management on ways to improve the effectiveness and 
clarity of the group’s corporate reporting and has 
encouraged management to support and adopt initiatives 
by regulatory bodies which would enhance the group’s 
reporting
external audit 
 
the detailed audit plan prepared by ernst  young llp uk 
which identifies the audit scope and their assessment  
of key risks the key risks monitored by the committee 
coincide with those identified and assessed by 
management and the external auditor these risks and 
remediating actions are explained in detail in the section 
entitled “significant issues and related actions” below 
all members of the committee support the application 
of professional scepticism by the group’s external auditor 
during 2014 and 2015 the members of the committee held 
several private meetings with the external auditor which 
provided a mutual opportunity for open dialogue and 
feedback without management being present topics 
covered at such meetings include the external auditor’s 
assessment of significant risks and related management 
actions confirmation that there has been no restriction in 
the scope placed on them by management the adequacy 
of the audit fees the independence of their audit and how 
they have exercised professional scepticism 
the effectiveness of the external auditor will be evaluated 
by the committee each year and takes into account the 
quality of the work and communication undertaken by  
the external auditor and the level of audit fees
the committee reviewed the 2014 h1 interim and 2014 
annual auditor’s reports giving particular consideration to 
the audit procedures and findings in the areas of significant 
judgements and estimates the committee also reviewed 
the letter of representation to be signed by management 
in respect of both the interim review and the annual  
audit lastly the committee together with the relevant 
management considered the external auditor’s 
management letter following the 2014 audit and reviewed 
the steps proposed by management in response to the 
findings 
appointment of external auditor
ernst  young llp kazakhstan was the auditor of 
the predecessor group of companies since 2007 
and continued auditing zhaikmunai llp in 2014 while 
ernst  young llp uk was appointed as an auditor of the 
group on 19 may 2014 based on the recommendation 
of the committee and upon approval by the company’s 
shareholders 
mr richard addison assumed the role of lead audit partner 
from ernst  young llp uk for the 2014 group audit in 
compliance with the requirements for the rotation of lead 
audit partners once every five years
in 2015 the group intends to adopt a policy on the group’s 
external audit which details the group’s requirements for 
amongst other things external auditor selection and 
nonaudit services the committee also considered and 
took account of the guidance contained under provision 
c37 of the uk corporate governance code that provides 
that companies should put their external audit contract 
out to tender at least once every ten years
nonaudit services
the committee monitors the external auditor to ensure that 
it does not provide nonaudit services that are prohibited 
by the uk auditing practices board apb and limits such 
services to due diligence services other assurance services 
and tax compliance and advisory services 
in 2014 nonaudit fees totalled us1089 thousand 
2013 us397 thousand including us730 thousand 
for assurance and due diligence services related to the 
premium listing 2013 us252 thousand us319 thousand 
2013 us105 thousand for quarterly reviews of the interim 
financial statements us40 thousand for tax compliance 
services notwithstanding a relatively significant amount of 
nonaudit fees the audit committee is satisfied that adequate 
safeguards to ensure ernst  young’s independence are in 
place the committee concurred with the external auditor’s 
position that the majority of nonaudit services have been 
of a oneoff nature and do not impair the external auditor’s 
independence
in 2015 the group is formalising its procedures relating to 
nonaudit services in the abovementioned policy regarding 
the group’s external audit it is expected that the policy will 
require that nonaudit services may only be provided by 
the external auditor where the external auditor maintains 
the necessary degree of independence and objectivity  
and standard supplier selection procedures are carried out 
the policy will be under review and may be amended from 
time to time as necessary strategic report corporate governance
annual report 2014 nostrum oil  gas plc 77
financial report regulatory information additional disclosures
internal audit 
the committee receives quarterly reports and monthly 
updates from the group’s chief financial officer and internal 
audit manager throughout the year the monthly report 
summarises current business performance and issues 
and the quarterly report provides information on internal 
audit findings and any action to be taken by management 
as a result
during 2014 the group developed its internal audit 
function and hired an internal audit manager in connection 
with this an internal audit charter has been adopted which 
develops a threeyear internal audit plan and sets out the 
responsibilities of the internal audit function the primary 
role of the internal audit function is to help the board and 
executive management to protect the assets reputation 
and sustainability of the organisation this is intended 
to be achieved through
 the group 
 processes so that they operate effectively and efficiently 
and reflect leading practice and
 and assurance across the group
the company’s ongoing process for identifying evaluating 
and managing the significant risks faced by the group 
accords with the frc’s ‘internal control revised guidance 
for directors on the combined code‘ formerly the 
‘turnbull guidance’ the system is designed to manage 
rather than eliminate the risk of failure to achieve business 
objectives and can only provide reasonable and not 
absolute assurance against material misstatement or loss 
the group’s aim during 2015 is to develop the internal 
audit function further by hiring additional staff and refining 
the terms of the internal audit charter in consultation with 
the committee to ensure that it is effective and meets the 
requirements of the business 
internal controls and risk management 
the committee has been focusing on the group’s risk 
assessment and management system a comprehensive 
financial procedures report dated 20 may 2014 was 
developed by the group during the process of the 
premium listing and was reviewed by the committee the 
committee adopted the director’s risk register and actively 
participates in further enhancing it the group is in the 
process of developing the internal controls manual and 
formalising the risk management policy particular attention 
is paid by the committee to the areas of risk management 
related to ensuring adequate maintenance of accounting 
records and accurate recording of transactions which 
permit the preparation of financial statements in 
accordance with ifrs in view of the oil price fluctuation 
the committee focused on the review of impairment testing 
and going concern
the committee also reviewed and challenged the group’s 
significant risks identified by the external auditor and 
reviewed the effectiveness of the group’s risk management 
framework related to such risks
the committee review 
the committee undertakes an annual evaluation of its 
performance and effectiveness 
concerns were raised in may 2014 evaluation as to 
the adequacy of the induction material therefore during 
the year suitable and detailed induction material was 
prepared and provided to sir christopher codrington bt 
as the newest member of the committee
in march 2015 the committee used a survey which 
examined governance processes such as the mix of 
experience and skills amongst members meeting content 
information training and resources areas of focus for 2015 
arising from the evaluation include monitoring the length 
of committee papers the inclusion of broader business 
topics on the agenda and suggestions for further 
committee training aside from this observation the 
committee concluded that its mandate and oversight 
performance were appropriate  corporate governance
78 nostrum oil  gas plc annual report 2014
audit committee report continued
significant issues and related actions
the following are the key risks and issues that the committee focused on during 2014
significant issues committee actions
recoverability of noncurrent assets’ carrying values 
the group performs impairment testing of goodwill on an annual basis as 
required by ifrs moreover the continuing fall in market oil prices since 
 and exploration  evaluation assets the impairment testing is subject  
to application of management judgement and various assumptions 
underlying the calculation of the value in the use of this single cash 
generating unit being the achievability of the long term business plan 
and the macroeconomic and related modelling assumptions underlying 
the valuation process
 
the committee continuously reviewed the detailed reports on impairment 
testing prepared by management and challenged the appropriateness 
of the assumptions made areas of focus were the achievability of the 
business plans as well as assumptions in relation to oil prices and 
discount rates which have been subject to volatility given the current 
macroeconomic conditions special consideration was also given to the 
sensitivity analysis in relation to these assumptions this has also been one 
of the main areas of audit focus and ernst  young llp provided detailed 
reporting on these matters to the committee
oil  gas reserves estimation and accounting
oil  gas reserves which are estimated by the group’s reserve 
engineers and audited by the independent reserve engineers are used  
to calculate the depletion of oil  gas assets and also used as input data 
for impairment testing models judgements and estimates are used when 
estimating the oil  gas reserves 
 
the committee reviewed judgemental aspects of the reserve estimation 
report as part of the group’s annual due diligence process it also 
examined the governance framework for the oil and gas reserves  
process training for staff and developments in regulations and controls
revenue recognition
the timing of revenue recognition in accordance with incoterms the 
recognition of revenue on a gross or net basis and the treatment of 
discounts are complex areas of accounting
 
the committee has reviewed the company’s policy and controls in relation 
to revenue recognition and specifically compliance with psa
related party transactions and disclosures 
this has been assessed as a significant risk area due to the inherent 
complexity of identifying related parties and the extensive disclosure 
requirements of ias 24 regarding related party disclosures as well as 
the past history of significant related party transactions carried out 
by the group
 
the committee has been monitoring the procedures in place for the 
identification of related parties and ensures that preapprovals are 
obtained before entering into contracts with them also the committee 
considered any observations made by the auditor as part of their reporting 
to the committee
gtu3 construction and well drilling
there are internal and external factors threatening the ability of the group 
to achieve its strategic objectives such as the construction of gtu3 and 
well drilling these include but are not limited to inadequate project 
management supplier delays availability of financial and other resources 
and cost overruns
 
the construction of gtu3 and the drilling programme were one of the key 
areas of focus for the committee in 2014 particularly in light of the decline 
in oil prices the committee has been reviewing monthly reports prepared 
by management and meeting regularly to discuss and identify potential 
problems and to provide advice on future steps to be taken by the group
tax contingencies and compliance with psa 
the group is subject to risks associated with uncertainties surrounding 
the application of tax laws in kazakhstan as well as the uncertainties 
and complexities of the calculation of taxes and other obligatory 
contributions under its production sharing agreement as a result 
management is required to make judgements and estimates in relation 
to provisioning for related taxes and contributions
 
the committee considered management reports setting out the results 
of assessments in relation to significant taxes and other contributions 
to the government having received input from the external auditor and 
challenging decisions made the committee agreed with management’s 
assessment of the provision to be recognised in respect of taxes and 
uncertain tax positions transfer pricing and social commitments 
and the associated disclosures
provisions and contingencies 
the recognition of provisions for the future decommissioning of oil  
gas assets at the end of their economic lives requires management’s 
judgement when estimating settlement dates the scope of work 
technology and legal requirements also the level of provisioning for 
contingent and other liabilities is an issue where management and  
legal judgements are important
 
the committee reviewed management’s reports on the group’s 
decommissioning environmental remediation and litigation provisioning 
including key assumptions used the governance framework applied 
discount rates and the movement in provisions over time strategic report corporate governance
annual report 2014 nostrum oil  gas plc 79
financial report regulatory information additional disclosures
significant issues committee actions
going concern 
the determination that the group will continue on a going concern basis 
for the foreseeable future requires management to exercise judgement
 
the committee considered the reports prepared by management and 
their assumptions and concluded that management’s recommendation 
to prepare the accounts on a going concern basis was appropriate 
the committee also discussed these reports and assumptions with 
the external auditors
derivative financial instruments 
the estimation of the fair value of derivative financial instruments involves 
the use of judgement and estimations in relation to oil price volatilities by 
both external service providers and management in addition there are 
risks associated with the complexity of accounting and disclosures related 
to derivative financial instruments
 
the committee reviewed management’s report on the valuation of 
derivative financial instruments and the respective disclosures made in 
 the notes to the financial statements the external auditor’s conclusions  
on the valuation models were also discussed at committee meetings
information security risks 
given its public nature the group needs to ensure that its environment 
is sufficiently secure to protect it against the risk of loss or corruption 
of sensitive information failure to adequately protect such information 
could have a material adverse effect on the group’s reputation and may 
lead to legal action against the group
 
at its quarterly meetings the committee pays attention to information 
security related matters and discusses with the management past and 
planned actions directed at addressing the recommendations from 
external consultants
environmental compliance 
given the changing nature of environmental regulations in kazakhstan 
there is a risk that the group will not be in full compliance with all 
regulations at all times
 
as part of the monthly management reports the committee reviewed the 
group’s activities to ensure an appropriate level of protection for health 
safety and the environment the committee has also reviewed the annual 
report prepared by the independent environmental auditor outlining the 
group’s compliance and the environmental auditor’s recommendations  
for improvement 
on behalf of the board
kaiuwe kessel janru muller
chief executive officer chief financial officer
24 march 2015 24 march 2015 corporate governance
80 nostrum oil  gas plc annual report 2014
nomination and governance committee report
letter from the chairman
sir christopher codrington bt
independent  
nonexecutive director
chairman’s introduction 
i am pleased to report on the nominations and 
governance committee which i chair 
as the nomination and governance committee was 
established in june 2014 following the premium listing  
of the company it has met once this year however  
going forward it is intended that it will meet at least  
twice a year and more frequently if required
membership
name membership status
sir christopher codrington bt
member since  
19 may 2014
frank monstrey
member since  
19 may 2014
eike von der linden
member since  
19 may 2014
role of the nomination and governance committee
the key responsibilities of the committee are to
 recommendations to the board regarding candidates 
for appointment or reappointment as directors
 board governance and corporate governance issues to 
enable the board to operate effectively and efficiently
 including skills knowledge and experience required 
of the board
 company both executive and nonexecutive with 
a view to ensuring the continued ability of the company 
to compete effectively in the marketplace and
 directors
committee meetings
only members of the committee have the right to attend 
committee meetings however other individuals such 
as the chief executive the head of human resources and 
external advisers may be invited to attend all or part of 
any meeting as and when appropriate 
main activities of the committee during the year
at its initial meeting in 2014 the committee began to 
consider the desired profile of candidates for future 
board appointments this is a topic that the committee 
considers important and on which the committee intends 
to focus its attention throughout 2015 laying down 
criteria and key attributes for potential new directors 
especially in terms of the experience and diversity of 
board members
in the year ahead the committee will continue to assess 
the performance of the board and what changes if any 
should be made to the composition of the board and  
its committees in order to maximise their effectiveness 
and will continue to monitor developments in corporate 
governance to ensure that the board is operating 
efficiently and in compliance with its obligations
sir christopher codrington bt
on behalf of the nomination and governance 
committee
24 march 2015 strategic report corporate governance
annual report 2014 nostrum oil  gas plc 81
financial report regulatory information additional disclosures
remuneration committee report 
letter from the chairman
mark martin
remuneration  
committee chair
dear shareholder
this year is nostrum’s first as a public company 
the committee has endeavoured to ensure that the 
company’s remuneration structures evolve to adopt 
aspects of good practice that are expected of a company 
with a premium listing on the london stock exchange  
as such and in compliance with large and mediumsized 
companies and groups accounts and reports 
amendment regulations 2013 the “regulations”  
this report has been divided into the following parts
 messages on remuneration for the year under review
 which proposes an overall executive remuneration 
framework that will be adopted and implemented by 
the company in 2015 and the following two financial 
years – if approved by shareholders the policy set out  
in this part of the report will become binding with  
effect from the agm and
 shareholders with details of the remuneration that was 
actually paid to the company’s directors during 2014 
and explains how the new policy referred to above will 
be applied in 2015 – this final part of the report will be 
subject to an advisory vote at the forthcoming agm
we have structured our remuneration policy in such  
a way that it
 talent capable of delivering the company’s strategic 
objectives
 managers with the interests of our shareholders
 complies with corporate governance best practice
the company’s performance and link to incentives
in 2013 the group had a record financial and operational 
year with record production levels of over 46000 boepd 
and a strong oil price the company’s performance was 
the best in its history the company also made its first 
steps into mas acquiring three licences at a cost of 
less than 20 cents a 2p barrel with this in mind the 
company paid bonuses to executive directors in 2014 
equal to between 30 and 35 of the amount of fixed 
compensation this is extremely low in comparison to 
the company’s ftse 250 peers
risk management
the committee continually reviews our incentive 
arrangements to ensure they do not encourage or 
reward excessive or inappropriate financial or operational 
risktaking the committee has reviewed the risks 
involved in the incentive schemes and is satisfied that 
they do not encourage excessive risk taking and that the 
company has in place adequate governance procedures 
to mitigate any principal risks
shareholder support and feedback
we welcome questions and feedback from all parties 
on the content and style of this report and hope that 
shareholders are supportive of the remunerationrelated 
resolutions that are to be proposed at the agm
mark martin
remuneration committee chair
24 march 2015 corporate governance
82 nostrum oil  gas plc annual report 2014
remuneration committee report continued 
annual report on remuneration
this remuneration report has been prepared in accordance 
with part 4 of the regulations and section 420 companies 
act 2006 the “act” in accordance with the regulations 
and the act our remuneration policy as detailed on pages 
8791 will be subject to a separate binding vote at the 2015 
agm and subject to shareholders’ approval it is intended 
that the remuneration policy will remain in operation for 
three years we will also seek an advisory vote on the 
remuneration report at the agm
remuneration committee 
the remuneration of the chairman the chief executive the 
chief financial officer 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 nonexecutive 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 mr martin as chairman  
of the committee the committee must always include  
at least three independent nonexecutive directors who 
comprise a majority of the committee the members  
of the committee during 2014 were
name
membership
since status
mark martin 19 may 2014
eike von der linden 19 may 2014
piet everaert 19 may 2014
sir christopher codrington bt 19 may 2014
none of the committee members have daytoday 
involvement with the business their biographies are given 
on pages 6465 the company secretary acts as secretary  
to the committee
the primary responsibilities of the committee are set out 
in its terms of reference which are reviewed and updated 
annually and which are available for download on the 
company’s website alternatively copies can be obtained 
on request from the company secretary
in summary the committee’s key responsibilities include
 overall framework for remuneration and its cost and 
in consultation with the chairman and chief executive 
determining the remuneration packages of each of the 
executive directors 
 remuneration and the terms of their service or 
employment contracts including share based schemes 
other employee incentive schemes adopted by the 
company from time to time and pension contributions
 
that the remuneration of the executive directors of the 
company and other senior members of executive 
management of the company and its subsidiaries is set 
by a committee of the board whose members have no 
personal interest in the outcomes of the decisions of the 
committee and who will have due regard to the interests 
of the shareholders and
 relevant provisions of the company’s remuneration policy
the committee held two meetings in 2014 the principal 
agenda items at the formal meetings were as follows
meeting agenda item
august 2014 
of the committee
 compensation and bonuses
 
of the committee
 november 2014 remuneration policy
with the exception of the chairman of the board no other 
executive directors participated in the committee meetings 
during 2014
during the year the committee received advice internally 
from frank monstrey chairman of the board kaiuwe 
kessel chief executive and thomas hartnett company 
secretary the chairman and the chief executive were 
consulted on the remuneration of the other executive 
directors and senior members of executive management 
and on matters relating to the performance of the company 
and the company secretary was consulted on regulatory 
requirements none of the chairman of the board the 
chief executive nor the company secretary participated 
in decisions on their own remuneration members of the 
group’s human resources team may attend relevant 
portions of committee meetings to ensure appropriate 
input on matters related to senior members of the executive 
management team below board level
during 2014 the company did not engage any external 
advisers to advise on remuneration
statement of 2015 remuneration policy 
implementation
the proposed directors’ remuneration policy as outlined  
on pages 8791 is the company’s first remuneration policy 
and will subject to shareholder approval apply from the 
day after the company’s 2015 agm strategic report corporate governance
annual report 2014 nostrum oil  gas plc 83
financial report regulatory information additional disclosures
single total figure of remuneration for executive directors
the table below shows the single total figure of remuneration for each of the executive directors
director
1
amounts in usd
2
period
salary 
and fees
benefits
in kind
annual 
bonus4
option
 exercise 
audited
total
frank monstrey chairman 2014 904483 – 314213 – 1218696
 2013 931500 – – – 931500
kaiuwe kessel chief executive officer 2014 937884 6803 337320 1750008
3
3032015
 2013 927987 6525 292608 – 1227 120
janru muller chief financial officer 2014 574709 – 166822 – 741531
 2013 557106 – 182861 – 739967
1  mr monstrey mr kessel and mr muller are remunerated for their services as group executives through management fees payable under a technical assistance agreement with 
probel capital management nv now named nostrum services nv 
2 the executive directors are remunerated in eur the eur amounts are converted to usd using the 2014 and 2013 average eurusd exchange rate respectively 133 and 138
3  proceeds from exercise of the share options are converted to usd using eurusd exchange rate as at 10 september 2014 161082 
4 bonus figures relate to bonus paid in 2014 and 2013 in respect of the prior year performance period
single total figure of remuneration for nonexecutive directors
the table below shows the single total figure of remuneration for each of the nonexecutive directors
director
amounts in usd period fees
audited
total
eike von der linden
1
2014 115000 115000
 2013 100000 100000
piet everaert 2014 100000 100000
 2013 100000 100000
sir christopher codrington bt
2
2014 55000 55000
 2013 – –
mark martin
3
2014 55000 55000
 2013 – –
pankaj jain 2014 100000 100000
 2013 100000 100000
atul gupta 2014 100000 100000
 2013 100000 100000
1 mr von der linden receives an additional fee being both the senior independent director and the chairman of the audit committee
2  sir christopher codrington bt receives an additional fee being the chairman of the nominations and governance committee
3  mr martin receives an additional fee being the chairman of the remuneration committee corporate governance
84 nostrum oil  gas plc annual report 2014
notes on the single total figure remuneration table
base salaries 
salaries are reviewed annually in july of each year in july 2014 salaries were increased by 15 for the chairman of the 
board the chief executive and the chief financial officer effective as of august 2014
the committee intends to review salaries in july 2015 in making salary determinations the committee will consider  
the provisions of the remuneration policy
annual bonus
in the last financial year all executive directors were eligible for a bonus prior to the premium listing of the company 
annual bonuses were determined on the basis of the group’s performance going forward and in accordance with the 
company’s remuneration policy the annual bonus opportunity absent extraordinary circumstances will be 40 of base 
compensation and will be assessed against financial and operational objectives refer to page 88 of the remuneration 
policy for more information in relation to the bonus policy going forward
long term incentive awards
in 2014 the company did not operate a performance based long term incentive scheme 
pension entitlements
the company does not operate a pension scheme and accordingly no element of remuneration is pensionable
payments to past directors
no payments were made to past directors of the company during the year ended 31 december 2014
payments for loss of office
no payments were made in respect of loss of office during the year ended 31 december 2014
nonexecutive director fees
the annual fees for nonexecutive directors for 2015 will remain the same as those for 2014 being 100000 per annum 
fees for nonexecutive directors were reviewed prior to the premium listing of the company and in determining their 
levels the board took account of fees paid by other premium listed companies in addition in august 2014 it was agreed 
that in order to bring the company into line with other premium listed ftse 250 companies i eike von der linden’s  
fees would be increased by 20000 to reflect his additional responsibilities as senior independent director and  
ii eike von der linden mark martin and sir christopher codrington bt would each receive an additional 10000 to 
reflect their roles as chairmen of the audit remuneration and nomination and governance committees respectively
directors’ shareholdings
at present and in accordance with the company’s remuneration policy the directors are not subject to any minimum 
shareholding requirements 
the beneficial interests of the directors in the share capital of the company as at 31 december 2014 is as follows
director
audited
total
frank monstrey 51190476
kaiuwe kessel 10000
janru muller –
eike von der linden 13160
atul gupta –
sir christopher codrington bt 3312
mark martin –
piet everaert 22000
pankaj jain 11 9 700
between the end of the 2014 financial year and the date of this annual report there was no change to the above table 
of beneficial interests of directors in the share capital of the company
remuneration committee report continued 
annual report on remuneration strategic report corporate governance
annual report 2014 nostrum oil  gas plc 85
financial report regulatory information additional disclosures
phantom share option plan
the company currently operates one nonperformance related share option plan the “plan” as at 31 december 2014 
the following executive directors held the following options over ordinary shares of the company generally vesting over  
a fiveyear period exercisable at either us400 or us1000 per ordinary share and expiring ten years from the date  
of grant pursuant to the plan
audited
director
date 
of grant
number 
of options
face value 
in usd
options
 exercised
 during 
the financial 
year
2014
options
 lapsed
 during 
the financial 
year
2014
options 
held at 
31 december
 2014
option
 exercise 
price 
us per
 option
expiry 
date
frank monstrey – – – – – – – –
kaiuwe kessel 27 0308 900974 –¹ 200000
4
– 700974 40 260318
260313 200000 18000² – – 200000 100 250323
janru muller
3
27 0308 120130 –¹ – – 120130 40 260318
260313 70000 6300² – – 70000 100 250323
1 the options do not have a face value at the date of the grant since the grant date was before the gdr listing on the london stock exchange on 1 april 2008
2  calculated by multiplying the market value of the options at the date of grant usd1009 less 1000 by the number of options granted
3  such options are held by a company associated with mr muller tenggara bv
4  proceeds received by mr kessel from the option exercise are shown in the single total figure of remuneration for executive directors table on page 83
there have been no changes in the interests in the phantom share option plan between the end of the financial year 2014 
and the date of this annual report
remuneration statistics and comparisons
historical tsr performance
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 to the ftse 350 ep index the committee selected the ftse 350 ep index 
as the most appropriate comparator as it feels that it is a broadbased index which includes many of the company’s 
competitors
share price performance 
jan 14 feb 14 mar 14 apr 14 may 14 jun 14 jul 14 aug 14 sep 14 oct 14 nov 14 dec 14
120
110
90
100
80
70
60
40
50
nog share price post listing
capitalisationweighted index of ftse 350 ep
history of ceo remuneration
the total remuneration figures compared with a respective maximum opportunity for the chief executive during each of the last  
five financial years are shown in the table below kaiuwe kessel was in the position for all five years shown 
year
total ceo
 remuneration
annual bonus as 
 of maximum
 opportunity5
2010 743215 100
2011 958501 100
2012 1019398 100
2013 1227 120 100
2014 30320156 100
5  for the period 2010 until 2014 the bonus scenarios were either 0 or 100 for the bonus scenarios as of 2015 refer to the remuneration policy on pages 87 to 88 
6 total ceo remuneration of 2014 includes the remuneration from the exercise of share options corporate governance
86 nostrum oil  gas plc annual report 2014
remuneration committee report continued 
annual report on remuneration
percentage change in ceo remuneration
the table below compares kaiuwe kessel’s 2013 and 2014 
remuneration in his role as chief executive with that of  
a comparative group the comparator group comprises  
the group’s european based employee population  
the committee has chosen this comparator group as it feels 
it is employed on more readily comparable terms 
chief executive
 officer
comparator
 group
salaries
1
15 15
annual bonus
2
00 00
1 the salary increases are determined and awarded in the course of the calendar year
2 there was no change in bonus overall bonus is linked to salary
relative importance of spend on pay
the table below shows the company’s actual spend on  
pay for all employees relative to distributions
key expenditure areas  
in thousands of us dollars 2014 2013

 change
remuneration paid  
to all employees
1
 40358  28451 419²
distributions to  
shareholders total 64615 85344 243

3
 64615 63179 23
 0 22165 1000
1  total remuneration reflects overall payroll and related taxes refer to the consolidated 
financial statements for further information
2  the increase in payroll and administrative expenses is mainly is driven by the 
acquisition of probel capital management nv now named nostrum services nv  
on 30 december 2013 which led to the elimination of the initial management fees  
and recognition of its expenses as payroll and related taxes
3  these distributions were paid before the reorganisation when the company was  
an lp and so we refer to them as “distributions”
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 contracts and 
the nonexecutive directors’ letters of appointment can 
be found in the company’s remuneration policy on page 88 
of this annual report all directors are subject to annual 
reappointment and accordingly all executive and 
nonexecutive directors will stand for reelection at the agm
approval of the directors’ remuneration report
the directors’ remuneration report including both the 
remuneration policy and the annual report on remuneration 
was approved by the board on 24 march 2015
on behalf of the board
kaiuwe kessel janru muller
chief executive officer chief financial officer
24 march 2015 24 march 2015 strategic report corporate governance
annual report 2014 nostrum oil  gas plc 87
financial report regulatory information additional disclosures
directors’ remuneration policy
this sets out the remuneration policy the “policy” for  
the board which if approved by shareholders at the agm 
will take effect from the date of that meeting and will be 
effective until the company’s 2018 agm unless a further 
policy is proposed by the company and approved by 
shareholders in the meantime
policy coverage
this policy applies automatically to the following 1 all 
executive directors of the company and the company 
secretary 2 any other senior members of the executive 
management of the group 3 any other member of the 
executive management of the group as may be required 
by the board and 4 any grant of shares options or similar 
securities or rights relating to more than 10000 company 
shares 
policy objectives
this policy is designed to
 retains high calibre directors managers and employees 
capable of delivering the company’s strategic objectives
 
in a manner that is consistent with best practice and 
aligned with the interests of the company’s shareholders
 managers with the interests of the company’s 
shareholders and ensure that rewards are justified  
by performance
 members of the executive management takes into 
account i pay and conditions throughout the company 
and ii corporate governance best practice including 
health  safety environmental social and governance 
risks
peer group
for the purposes of benchmarking appropriate 
compensation the committee currently regards the 
following companies as the most relevant peer group  
for nostrum

 for scarce skills within the industry
 which compete for expatriate and local staff
risk management
the committee will review incentive arrangements regularly 
to ensure that they comply with the risk management 
systems and that controls are operating effectively the 
committee also ensures that inappropriate operational or 
financial risktaking 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 
the remuneration policy table
the table on page 88 sets out the key components of the 
reward package for executive directors corporate governance
88 nostrum oil  gas plc annual report 2014
executive directors’ remuneration policy table
element of pay purpose and 
link to strategy
maximum 
opportunity
operation performance 
criteria
base pay
 market
competitive base 
salaries 
 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
 fixed for 12 months

benefits
 practice and 
provided in 
line with peer 
companies
 value of such 
benefits should  
not constitute  
a significant 
proportion of  
any employee’s 
compensation

 – medical
 – life insurance
  –  permanent health insurance long 
term disability or income protection 
insurance 
 –  a company car is provided to the ceo 

annual 
bonus
 may be eligible  
for an annual cash 
bonus for good 
performance 
as determined  
at the board’s 
discretion
 maximum 
opportunity  
of 40 of  
base salary 
compensation
 will be set based 
on specific 
medium term 
objectives that 
have been agreed 
in advance by the 
committee
 
by reference to performance in the  
prior calendar year
 in cash in august of each year
 
at the board’s discretion in exercising 
its discretion to determine whether 
there has been good performance by 
executive directors the board shall have 
regard primarily to the extent to which 
the performance target set by the board 
for such executive directors have been 
achieved 
 individuals can personally contribute by 
strong performance and not based on 
macro variables such as market cap  
oil prices etc that are not within the 
control of individuals
phantom 
share option 
plan 
 great importance 
on minimising 
dilution of existing 
shareholders  
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
 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
 administers the plan and is responsible 
for granting rights under the plan
 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
 are eligible to participate in the plan at 
the discretion of the board 
 
in the notes opposite
 at every committee meeting to ensure 
that they are appropriate relevant and 
rigorous
 reduced at any time prior to vesting  
at the discretion of the committee 
following events such as but not 
restricted to a material misstatement  
of results failure of risk management 
breach of health and safety regulations 
or serious reputational damage to the 
company
pensions
 provided

shareholding
 
of executive 
directors with 
those of 
shareholders
 are encouraged to 
maintain a holding 
in the company to 
align their interests 
with shareholders
 of executive directors
remuneration committee report continued
directors’ remuneration policy strategic report corporate governance
annual report 2014 nostrum oil  gas plc 89
financial report regulatory information additional disclosures
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
 option is granted from the first anniversary of the date 
of grant
 which an option is granted from the second anniversary 
of the date of grant
 which an option is granted from the third anniversary 
of the date of grant
 which an option is granted from the fourth anniversary 
of the date of grant and
 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 award and iii the size of the award
treatment of existing arrangement
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 2015 three 
scenarios are presented for each executive director  
i “minimum” remuneration reflecting no bonus award  
ii “on target” remuneration where the board’s 
expectations for the executive director’s performance have 
been met and a bonus of 25 of base salary is awarded 
and iii “maximum” remuneration where the board’s 
expectations for good performance by the executive 
director have been exceeded and a bonus of 40 of base 
salary is awarded at present the executive directors do 
not receive any pension or any long term compensation 
according to the policy of the boards benefits are not 
expected to be a significant component of remuneration 
in 2015 only mr kessel is expected to receive benefit 
payments directly benefits are not paid to mr monstrey and 
mr muller instead mr monstrey and mr muller are paid 
a base salary out of which they may arrange any benefits 
themselves 
the bar charts below do not include any amounts in relation 
to the phantom share option plan because i as at the time 
of this annual report the board is not able to determine 
whether any options will be issued under the phantom 
share option plan in 2015 as described in the executive 
directors’ remuneration policy option awards will only be 
made on the basis of achieving concrete long term 
objectives defined in advance by the committee and will 
vest over several years and
ii as at the date of this annual report any options vesting in 
2015 in respect of awards made from prior years would not 
generate proceeds to the executive directors at the current 
share price 
salary bonus beneﬁts
kaiuwe kessel chief executive officer
amounts in usd thousand
0
1600
1400
1200
1000
800
600
400
200
minimum on target maximum
99
1
968
1
1207
1
1350
79
20
71 
28
salary bonus
0
1600
1400
1200
1000
800
600
400
200
frank monstrey chairman of the board
amounts in usd thousand
minimum on target maximum
100
91 1
80
1 1 38
1275
20
71 
29
janru muller chief financial officer
amounts in usd thousand
salary bonus
0
1600
1400
1200
1000
800
600
400
200
minimum on target maximum
100 80
564
705
790
71 
20
29 corporate governance
90 nostrum oil  gas plc annual report 2014
remuneration committee report continued
directors’ remuneration policy
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
 highest calibre directors in a manner that is consistent 
with best practice and aligned with the interests of the 
company’s shareholders
 will be determined within the framework of the 
remuneration policy table on page 88 
 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 salary 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 
 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 
 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 company to offer forms of signon remuneration 
the necessity and level of which will depend on 
circumstances 
 role the company may provide certain oneoff 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 
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
service agreements
summary details of each director’s service agreement are 
as follows
service
 agreement 
date
salary as at 
1 january 
2015 us
1
frank monstrey 19 may 2014 911216
kaiuwe kessel 19 may 2014 955996
janru muller 19 may 2014 564409
1  the executive directors are remunerated in eur the eur amounts are converted to 
usd using eurusd exchange rate 133
the appointment of each of the executive directors 
continues until the company’s agm and their ongoing 
appointment is subject to being reelected as a director  
at each subsequent agm 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
 
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 executive directors are subject to certain 
restrictive covenants in their service agreements relating 
to share dealings and noncompetition and nonsolicitation 
covenants in relation to relevant group companies for 
six months from the date of termination of the relevant 
executive’s service contract
copies of the executive directors’ service agreements 
and the nonexecutive directors’ letters of appointment 
are available for inspection at the company’s registered 
office during normal business hours strategic report corporate governance
annual report 2014 nostrum oil  gas plc 91
financial report regulatory information additional disclosures
payments for departing executive directors
provision policy
notice period and 
compensation for loss of 
office in service contracts

 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
 treatment of unvested  
share option awards
 date of voluntary cessation of employment and any portion that remains outstanding but 
unexercised after 12 months following such cessation will lapse
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
nonexecutive directors’ remuneration policy table
fee structure approach to setting fees other remuneration
 receive a fixed annual fee 
for their directorship
 
are payable to any director 
who serves as senior 
independent director or as a 
board committee chairman
 and the executive directors 
determine the remuneration 
of all nonexecutive 
directors including 
members of 
the committees
 performance of a nonexecutive director’s duties will 
be reimbursed by the company such expenses could 
include travel between the home and office or 
between the home and the location of a board  
or committee meeting
 in the plan
nonexecutive directors
the chairman and executive directors set the remuneration 
package for nonexecutive directors in line with the 
nonexecutive directors’ remuneration policy table above 
and subject to the company’s articles of association 
the “articles”
nonexecutive director appointment letters
all nonexecutive directors of the company were appointed 
on 19 may 2014 the company intends to comply with 
provision b71 of the uk corporate governance code and 
accordingly all directors will stand for reelection by 
shareholders at future agms until the board determines 
otherwise 
each appointment is for an initial term of three years 
subject to being reelected at each annual general 
meeting save that a nonexecutive director or the 
company may terminate the appointment at any time upon 
one month’s written notice or that a nonexecutive 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 nonexecutive directors is entitled to an annual 
fee paid quarterly and to reimbursement of reasonable 
expenses there is no entitlement for nonexecutive 
directors to participate in the plan
the nonexecutive 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 is 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 
nonexecutive director’s gross misconduct material breach 
of the terms of the appointment act of fraud or dishonesty 
or wilful neglect of the nonexecutive director’s duties the 
nonexecutive director will 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 nonexecutive 
directors are entitled to any damages for loss of office and 
no fee shall be payable in respect of any unexpired portion 
of the term of the appointment
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 
meets with shareholders and solicits their views on the 
company’s policies in relation to director and executive 
remuneration and takes such views into account when 
formulating remuneration policies and remuneration 
levels in specific cases corporate governance
92 nostrum oil  gas plc annual report 2014
directors’ report
the directors submit their report and the consolidated 
audited financial statements of the group and the 
audited parent company financial statements of the 
company for the year ended 31 december 2014
this report has been prepared in accordance with 
the large and mediumsized companies and groups 
accounts and reports regulations 2008 certain 
information that fulfils the requirements of the directors’ 
report can be found elsewhere in this document and is 
referred to below this information is incorporated into 
this directors’ report by reference
directors and their interests
full biographical details of the individuals who were 
directors of the company during the financial year ended 
31 december 2014 is set out on pages 64 and 65 of this 
annual report 
details of each director’s interests in the company’s 
ordinary shares and options held over ordinary shares 
are set out in full in the directors’ remuneration report 
on pages 84 and 85 respectively
dividends
1
details of the distribution paid during the year are disclosed 
in the notes to the consolidated audited financial 
statements for the year ended 31 december 2014 
in addition the board is proposing a final dividend 
of us027 per ordinary share for the year ended 
31 december 2014 subject to shareholder approval 
at the agm
auditor
each director in office at the date of this directors’ report 
confirms that a so far as he is aware there is no relevant 
audit information of which the company’s auditor is 
unaware and b he has taken all the steps that he ought 
to have taken as a director to make himself aware of 
any relevant audit information and to establish that 
the company’s auditor is aware of that information
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 in respect of 
a liability incurred by any director due to the 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 of association the “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 agm
political donations
the group has made no political donations during the  
year 2014
contributions to noneu political parties
no contributions to noneu political parties were made 
during the year 2014
financial risk management objectives and policies
disclosures relating to financial risk management objectives 
and policies including our policy for hedging are set out 
in the principal risks and uncertainties table on page 60
important events since the end of the financial year
the major events after 31 december 2014 are disclosed 
in note 36 to the consolidated audited financial statements 
future developments within the group
the strategic report on pages 261 contains details of likely 
future developments within the group
branches
the company is registered in england and wales but has 
its place of effective management and tax residence in 
the netherlands the company has no branches but 
has subsidiaries in kazakhstan the united kingdom the 
netherlands belgium russia and the bvi 
share capital
as of 31 december 2014 the company’s issued share 
capital was £188182958 divided into 188182958 ordinary 
shares each having a nominal value of £001 all of which 
are in free circulation
2
 all of the company’s issued ordinary 
shares are fully paid up and rank equally in all respects 
the rights attached to them in addition to those conferred 
on their holders by law are set out in the articles the 
elian employee benefit trustee limited holds shares in 
the company in trust the “trust” for the purposes of the 
company’s phantom share option plan and the rights 
attaching to them are exercised by independent trustees 
as at 31 december 2014 the trust held 3354139 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 company by 
ordinary resolution or if the company passes a resolution 
the directors
voting rights
there are no restrictions on voting rights or transfers 
of shares in the articles and at a general meeting every 
member present in person or by proxy has one vote for 
every share held by him no member 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 to the company in respect of that share remains 
unpaid
1  these were paid before the reorganisation when the company was an lp and 
so we refer to them as “distributions”
2  there is no longer any concept of authorised share capital in english law  strategic report corporate governance
annual report 2014 nostrum oil  gas plc 93
financial report regulatory information additional disclosures
transfer of shares
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
directors articles and purchase of shares
the articles were adopted on 19 may 2014 and may only 
be amended by special resolution at a general meeting 
of the shareholders
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 agm in accordance with 
the uk corporate governance code retiring directors 
may be eligible for annual reelection
the company did not repurchase any shares during 2014 
the board has the power conferred on it by shareholders 
to purchase its own shares and will seek a renewal of that 
power at the forthcoming agm within the limits set out 
in the notice of the meeting
employment policies and equal opportunities
the group is an inclusive and equal opportunity 
employer and complies with all applicable laws governing 
employment practices the group has also adopted and 
implemented policies and procedures which cover the 
recruitment selection training and development and 
promotion and retirement of its employees
nostrum aims to create a workplace that has an open 
atmosphere of trust honesty and respect harassment or 
discrimination of any kind based on race religion national 
origin age gender disability sexual orientation or political 
opinion or any other similarly protected characteristic 
is not tolerated this principle applies to all aspects of 
employment from recruitment and promotion through 
to termination and all other terms and conditions of 
employment
it is the group’s aim that all employment policies are fair 
and equitable and consistent with the skills and abilities 
of the employee and the needs of the business employees 
are free to join a trade union or participate in collective 
bargaining arrangements 
further details are included in “our people” on  
pages 38 to 40
in accordance with the group’s code of conduct the 
company’s policy is to fully comply with the uk equality 
act 2010 which imposes a duty on employers to make 
reasonable adjustments to help disabled job applicants 
employees and former employees in certain circumstances 
and prohibits direct disability discrimination discrimination 
arising from disability indirect disability discrimination 
harassment relating to disability and victimisation 
where the duty to make reasonable adjustments arises 
the company’s policy is to effectively treat the disabled 
person more favourably than others in an attempt to reduce 
or remove that individual’s disadvantage 
the company’s policy is to give full and fair consideration 
to applications for employment made by disabled people 
disabled job applicants and employees are encouraged 
to tell the company about their condition so that the 
company can support them as appropriate employees 
experiencing difficulties at work because of a disability 
may contact their supervisor or the human resources 
department to discuss any reasonable adjustments that 
would help overcome or minimise the difficulty their line 
manager or the human resources department may consult 
with the disabled person and his or her medical adviser 
about possible adjustments the company will consider 
the matter carefully and try to accommodate the disabled 
person’s needs within reason support provided by the 
company to disabled employees may include training and 
career development support if the company considers 
a particular adjustment would not be reasonable it will 
explain its reasons and try to find an alternative solution 
where possible
the company will monitor the physical features of its 
premises to consider whether they might place anyone with 
a disability at a substantial disadvantage where necessary 
it will take reasonable steps to improve access
employee communications and involvement
the group has processes in place for communicating 
with all its employees employee communications include 
information about the performance of the group on major 
matters affecting their work employment or workplace 
the group has also developed an intranet which assists 
in communicating with employees across borders and 
provides key information to all group employees
the company also operates an employee share option 
plan further details of which can be found in the directors’ 
remuneration policy on page 88 and the notes to the 
consolidated audited financial statements for the year 
ended 31 december 2014  corporate governance
94 nostrum oil  gas plc annual report 2014
directors’ report continued
substantial shareholders
as of 31 december 2014 the following significant holdings 
of voting rights in the share capital of the company had 
been disclosed to the company under disclosure and 
transparency rule 5 or otherwise
name
number of 
ordinary shares
 of issued 
ordinary shares
claremont holdings cv 51190476 27 2
kazstroyservice global bv 50000000 266
baring vostok  
capital partners 29050054 154
mg investment 
management limited 17 532045 93
jp morgan asset 
management korea 
company ltd 7672 181 41
there were no major transactions in the share capital of the company or any change  
in the structure of shareholders holding 5 or more per cent of the ordinary shares in 
the reporting period
apart from as disclosed in the section ‘deed of adherence 
with mayfair investments bv’ there have been no changes 
in the interests disclosed to the company in respect of 
substantial shareholders in the period between the end 
of the financial year 2014 and the date of this annual report
related party transactions
refer to note 32 of the consolidated financial statements 
for a description of related party transactions in the 
reporting period 
significant contractual arrangements
on 19 may 2014 the company entered into relationship 
agreements with claremont holdings cv “claremont” 
the “claremont relationship agreement” and 
kazstroyservice global bv “kss global” the “kss global 
relationship agreement and together with the claremont 
relationship agreement the “relationship agreements” 
to regulate in part the degree of influence that claremont 
and kss global and their affiliates may exercise over the 
management of the company the principal purposes 
of the relationship agreements are to ensure that the 
company is capable at all times of carrying on its business 
independently of claremont and kss global and their 
affiliates and that all of the company’s transactions and 
relationships with claremont and kss global and its 
affiliates are at arm’s length and on normal commercial 
terms
pursuant to its terms each of the relationship agreements 
will continue until the earlier of a the ordinary shares 
ceasing to be admitted to the official list of the financial 
conduct authority and to trading on the london stock 
exchange or b claremont andor kss global together 
with any of their affiliates ceasing to be entitled to exercise 
or to control the exercise of 10 or more of the rights 
to vote at the company’s general meetings
terms of the claremont relationship agreement
under the claremont relationship agreement claremont 
has agreed that a it will and will procure its affiliates to 
allow the business and affairs of the company and the 
group to be operated in the best interests of the 
shareholders as a whole b it will and will procure its 
affiliates will allow the company and its affiliates at all times 
to carry on its business independently of claremont and 
its affiliates c it will not and will procure its affiliates will 
not act in any way which shall prejudice the ability of 
the company and its affiliates to carry on its business 
independently of claremont or its affiliates d it will and will 
procure its affiliates to allow the company to be managed 
in accordance with the corporate governance code to the 
extent and on such terms as may be determined by the 
board and to comply with any further amendments or 
supplements to the corporate governance code as may  
be adopted by the board and it acknowledges its 
obligations under and agrees to comply with and will 
procure its affiliates comply with the disclosure and 
transparency rules in respect of its interests in the ordinary 
shares e it will not and will procure its affiliates will not 
take any action or omit to take any action to prejudice the 
company’s status as a listed company or its suitability for 
listing under the listing rules after admission has occurred 
or the company’s ongoing compliance with the listing 
rules and the disclosure and transparency rules or have 
the effect of preventing the company from complying with 
its obligations under the listing rules provided that this 
shall not prevent claremont or any other person from 
i accepting a takeover offer for the company made in 
accordance with the city code a “takeover offer ” in 
relation to their respective interests in the company or 
where such takeover offer is made by way of a scheme 
of arrangement under part 26 of the companies act 
a “ca2006 scheme” voting in favour of such ca2006 
scheme at the court and related shareholder meetings 
or otherwise agreeing to sell their ordinary shares in 
connection with a takeover offer or ii making a takeover 
offer by way of a general offer for all the outstanding 
ordinary shares or by way of a ca2006 scheme and 
delisting the company after such takeover offer has 
become wholly unconditional or in the case of a ca2006 
scheme after it has become effective f it will not and will 
procure that its affiliates will not influence the daytoday 
running of the company at an operational level or hold or 
acquire a material shareholding in one or more significant 
subsidiaries of the company and g it will exercise its 
voting rights in such a manner as to procure to the extent 
possible i at least half of the board comprises 
independent directors excluding the chairman of the 
board ii the audit committee shall comprise entirely 
independent directors and the remuneration committee 
shall comprise not less than three independent directors 
and iii the nomination committee and any other 
committee of the board to which significant powers 
authorities or discretions are delegated shall at all times 
consist of a majority of independent directors strategic report corporate governance
annual report 2014 nostrum oil  gas plc 95
financial report regulatory information additional disclosures
terms of the kss global relationship agreement
under the kss global relationship agreement kss global 
has agreed that a it will and will procure its affiliates will 
allow the company and its affiliates at all times to carry on 
its business independently of kss global and its affiliates 
b it will not and will procure its affiliates will not act in 
any way which shall prejudice the ability of the company 
and its affiliates to carry on its business independently of 
kss global or its affiliates c it will comply with and will 
procure its affiliates comply with the disclosure and 
transparency rules in respect of its interests in the ordinary 
shares d it will not and will procure its affiliates will not 
take any action or omit to take any action to prejudice the 
company’s status as a listed company or its suitability for 
listing under the listing rules after admission has occurred 
or the company’s ongoing compliance with the listing 
rules and the disclosure and transparency rules or have 
the effect of preventing the company from complying with 
its obligations under the listing rules provided that this 
shall not prevent kss global or any other person from 
i accepting a takeover offer for the company in relation 
to their respective interests in the company or where such 
takeover offer is made by way of a ca2006 scheme voting 
in favour of such ca2006 scheme at the court and related 
shareholder meetings or otherwise agreeing to sell their 
ordinary shares in connection with a takeover offer 
or ii making a takeover offer by way of a general offer for 
all the outstanding ordinary shares or by way of a ca2006 
scheme and delisting the company after such takeover 
offer has become wholly unconditional or in the case of 
a ca2006 scheme after it has become effective e it will 
not and will procure that its affiliates will not influence the 
daytoday running of the company at an operational level 
or hold or acquire a material shareholding in one or more 
significant subsidiaries of the company and f it will 
exercise its voting rights in such a manner as to procure to 
the extent possible i at least half of the board comprises 
independent directors excluding the chairman of the 
board ii the audit committee shall comprise entirely 
independent directors and the remuneration committee 
shall comprise not less than three independent directors 
and iii the nomination and governance committee and any 
other committee of the board to which significant powers 
authorities or discretions are delegated shall at all times 
consist of a majority of independent directors
deed of adherence with mayfair investments bv
on 30 january 2015 kss global transferred its 50 million 
ordinary shares in the company as follows a 48333300 
shares to mayfair investments bv “mayfair” a company 
indirectly owned by kss global’s three principal 
shareholders on the date of the transfer and b 1666700 
shares to kss global’s other shareholder on such date
 
in connection with such transfer mayfair entered into 
a deed of adherence with nostrum pursuant to which 
mayfair has undertaken to nostrum to be bound by the  
kss global relationship agreement in all respects and to 
observe and perform all of the provisions and obligations  
of such relationship agreement previously applicable to or 
binding on kss global in so far as they fall to be observed 
or performed on or after the date of the transfer
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
 under the company’s employee share option plan shall 
be deemed to have vested and the board shall direct 
elian 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 tenth 
anniversary of the date of grant any options that have 
not been exercised will lapse at the end of this period
 of control provisions if a change of control occurs the 
company will be required to offer to repurchase the 2019 
bonds and the new 2019 bonds at 101 of their principal 
amount plus accrued and unpaid interest to the date 
of purchase
sustainability
information about the company’s approach to sustainability 
risks and opportunities is set out on pages 36 to 47 also 
included on these pages are details of our greenhouse 
gas emissions
corporate governance statement
pursuant to disclosure 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
going concern
the financial position and performance of the company 
and the group and its cash flows are set out in the financial 
review section of this annual report on pages 4857 
the going concern statement required by the listing rules 
and the uk corporate governance code is set out in the 
notes to the consolidated audited financial statements and 
the notes to the parent company financial statements for 
the year ended 31 december 2014  corporate governance
96 nostrum oil  gas plc annual report 2014
directors’ report continued
requirements of the listing rules
the following table provides references to where the information required by listing rule 984r is disclosed
listing rule requirement
a statement of the amount of interest capitalised by the 
group during the period under review with an indication 
of the amount and treatment of any related tax relief
please refer to note 8 in the financial statements
any information required by lr 9218r publication of 
unaudited financial information
not applicable
details of any long term incentive schemes as required  
by lr 943r
not applicable 
details of any arrangements under which a director of the 
company has waived or agreed to waive any emoluments 
from the company or any subsidiary undertaking where  
a director has agreed to waive future emoluments details 
of such waiver together with those relating to emoluments 
which were waived during the period under review
no such waivers
details required in the cash of any allotment for cash of 
equity securities made during the period under review 
otherwise than to the holders of the company’s equity 
shares in proportion to their holdings of such equity shares 
and which has not been specifically authorised by the 
company’s shareholders
no such share allotments
where a listed company has listed shares in issue and  
is a subsidiary undertaking of another company details  
of the participation by the parent undertaking in any 
placing made during the period under review
not applicable
details of any contract of significance subsisting during  
the period under review
a  to which the listed company or one of its subsidiary 
undertakings is a party and in which a director of the 
listed company is or was materially interested and
b  between the listed company or one of its subsidiary 
undertakings and a controlling shareholder
please refer to the directors’ report
details of contracts for the provision of services to the 
company or any of its subsidiary undertakings by the 
controlling shareholder
not applicable
details of any arrangement under which a shareholder  
has waived or agreed to waive any dividends where a 
shareholder has agreed to waive future dividends details 
of such waiver together with those relating to dividends 
which are payable during the period under review
under the trust deed relating to the phantom share 
option plan the trustee has agreed to waive any dividends 
or shares held under the phantom share option plan 
board statement in respect of relationship agreement  
with the controlling shareholder
not applicable as the company does not have a 
“controlling shareholder” within the definition under 
the listing rules however please refer to the directors’ 
report for details of relationship agreements the 
company has entered into with certain shareholders strategic report corporate governance
annual report 2014 nostrum oil  gas plc 97
financial report regulatory information additional disclosures
important events affecting the company since yearend
on 30 january 2015 kss global transferred its 50 million 
ordinary shares in nostrum as follows a 48333300 shares 
to mayfair investments bv “mayfair” a company 
indirectly owned by kss global’s three principal 
shareholders on the date of the transfer and b 1666700 
shares to kss global’s other shareholder on such date
in connection with such transfer mayfair entered into 
a deed of adherence with nostrum pursuant to which 
mayfair has undertaken to nostrum to be bound by the  
kss global relationship agreement in all respects and to 
observe and perform all of the provisions and obligations  
of such relationship agreement previously applicable to or 
binding on kss global in so far as they fall to be observed 
or performed on or after the date of the transfer
responsibility statement
the directors are responsible for preparing the annual 
report and the financial statements in accordance with 
applicable law and regulations 
the directors are required by the companies act 2006 to 
prepare accounts for each financial year and with regards 
to group accounts in accordance with article 4 of the ias 
regulation the directors have prepared individual 
accounts in accordance with ifrs as adopted by the eu 
the accounts are required by law and ifrs to present fairly 
the financial position of the company and the group and 
the performance for that period the directors must not 
approve such accounts unless they are satisfied that they 
give a true and fair view  
of the state of affairs of the company and the consolidated 
group
the directors consider that the group has used appropriate 
accounting policies supported by reasonable judgments 
and estimates in preparing the financial statements and 
that all accounting standards which they consider to be 
applicable have been followed
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 performance 
business model and strategy
the directors’ have responsibility for
 accounting records which disclose with reasonable 
accuracy the financial position of the company and 
the group and which enable them to ensure that the 
accounts comply with the companies act 2006
 to safeguard the assets of the group and to prevent 
and detect fraud and other irregularities and
 and financial information on the company’s website
1
to the best of the directors’ knowledge
a  the financial statements prepared in accordance with 
the applicable set of accounting standards give a true 
and fair view of the assets liabilities financial position 
and profit or loss of the issuer and the undertakings 
included in the consolidation taken as a whole and
b  the management report includes a fair review of the 
development and performance of the business and 
the position of the issuer and the undertakings included 
in the consolidation taken as a whole together with 
a description of the principal risks and uncertainties 
that they face
by order of the board
kaiuwe kessel janru muller
chief executive officer chief financial officer
24 march 2015 24 march 2015
1  legislation in the uk governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions consolidated 
group ﬁnancial 
statements
98 nostrum oil  gas plc annual report 2014 strategic report corporate governance financial report additional disclosures regulatory information
99 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 contents 
page 
independent auditors’ report to the members of nostrum oil  gas plc  100 consolidated statement of financial position  107 consolidated statement of comprehensive income  108 consolidated statement of cash flows  109 consolidated statement of changes in equity  110 notes to the consolidated financial statements  111 1 general  111 2 basis of preparation and consolidation  113 3 changes in accounting policies and disclosures  114 4 summary of significant accounting policies  118 5 business combinations  127 6 goodwill  129 7 exploration and evaluation assets  130 8 property plant and equipment  131 9 advances for noncurrent assets  133 10 inventories  133 11 trade receivables  133 12 prepayments and other current assets  134 13 current and noncurrent investments 134 14 cash and cash equivalents  134 15 share capital and reserves  134 16 earnings per share  136 17 borrowings  137 18 abandonment and site restoration provision  140 19 due to government of kazakhstan  140 20 trade payables  141 21 other current liabilities  141 22 revenue  141 23 cost of sales 142 24 general and administrative expenses 142 25 selling and transportation expenses  143 26 finance costs  143 27 finance costs – reorganisation  143 28 employees’ remuneration  143 29 derivative financial instruments  146 30 other expenses  146 31 income tax  147 32 related party transactions  148 33 audit and nonaudit fees  150 34 contingent liabilities and commitments  150 35 financial risk management objectives and policies  152 36 events after the reporting period  156 100 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 independent auditors’ report to the members of nostrum oil  gas plc 
 
dear members 
we present our audit report on the group and parent company financial statements of nostrum oil  gas 
plc the ‘financial statements’ which comprise the group and parent primary statements and related 
notes 
this report is made solely to the 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 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 
company and the company’s members as a body for our audit work for this report or for the opinions we 
have formed   
opinion on 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 2014 and of the group’s profit for the year then ended; 
 the group financial statements have been properly prepared in accordance with ifrss as adopted by 
the european union; and 
 the parent company financial statements have been prepared in accordance with the requirements of 
the companies act 2006 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 and as regards the group financial statements article 4 of the ias regulation 
 
the financial statements comprise the group and parent company statements of financial position the 
group statement of comprehensive income the group and parent company statements of cash flows 
the group and parent company statements of changes in equity and the related group notes 1 to 36 and 
parent company notes 1 to 14  the financial reporting framework that has been applied in their 
preparation is applicable law and international financial reporting standards ifrss as adopted by the 
european union 
opinion on other matters prescribed by the companies act 2006 
in our opinion  
 the part of the directors’ remuneration report to be audited has been properly prepared in 
accordance with the companies act 2006; and 
 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 
 
  strategic report corporate governance financial report additional disclosures regulatory information
101 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 our application of materiality  
materiality is a key part of planning and executing our audit strategy for the purposes of determining 
whether the financial statements are free from material misstatement we define materiality as the 
magnitude of an omission or misstatement that individually or in the aggregate in light of the surrounding 
circumstances could reasonably be expected to influence the economic decisions of the users of the 
financial statements as we develop our audit strategy we determine materiality at the overall financial 
statement level and at the individual account level performance materiality is the application of materiality 
at the individual account level in assessing whether errors are material either individually or in aggregate 
we consider qualitative as well as quantitative factors 
planning materiality 
when establishing our overall audit strategy we determined a magnitude of uncorrected and undetected 
misstatements that we judged would be material for the financial statements as a whole we determined 
materiality for the group to be us 170 million 2013 us 184 million which is approximately 5 2013 
5 of adjusted pretax profit which is explained below we believe this provides us with a consistent year 
on year basis for determining planning materiality and the most relevant performance measure for the 
stakeholders of the group  in 2014 profit before tax was adjusted by us29 million mainly relating to the 
costs associated with the reorganisation of the group that we concluded are nonrecurring and therefore 
added back when calculating materiality this provided a basis for determining the nature timing and 
extent of risk assessment procedures identifying and assessing the risk of material misstatement and 
determining the nature timing and extent of further audit procedures 
performance materiality 
on the basis of our risk assessments together with our assessment of the group’s overall control 
environment our judgement was that overall performance materiality ie our tolerance for misstatement 
in an individual account or balance for the group was 50 201350 of planning materiality namely 
us 85 million 2013 us 92 million our objective in adopting this approach was to ensure that the 
total uncorrected and undetected audit differences did not exceed our planning materiality of us17 
million for the financial statements as a whole 
reporting threshold 
we agreed with the audit committee that we would report to the committee all audit differences in excess 
of us 085 million 2013 us 092 million which is set at 5 of planning materiality we report all 
corrected audit differences that in our view warrant reporting on qualitative grounds or where the corrected 
difference exceeds performance materiality we evaluate any uncorrected misstatements against both the 
quantitative measures of materiality discussed above and in light of other relevant qualitative 
considerations 
scope of the audit of the financial statements 
an audit involves obtaining evidence about the amounts and disclosures in the financial statements 
sufficient to give reasonable assurance that the financial statements are free from material misstatement 
whether caused by fraud or error this includes an assessment of whether the accountings policies are 
appropriate to the group’s and parent company’s circumstances and have been consistently applied and 
adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and 
the overall presentation of the financial statements in addition we read all the financial and nonfinancial 
information in the annual report to identify material inconsistencies with the audited financial statements 
and to identify any information that is apparently materially incorrect based on or materially inconsistent 
with the knowledge acquired by us in the course of performing the audit if we become aware of any 
apparent material misstatements or inconsistencies we consider the implications for our report  102 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 an overview of the scope of our audit  
for the parent company – our assessment of audit risk and our evaluation of materiality determines our 
audit scope for the parent company financial statements this helps us to form an opinion on the company 
financial statements under the international standards on auditing uk and ireland 
for the group  our assessment of audit risk our evaluation of materiality and our allocation of that 
materiality determine our audit scope for each entity within the group which when taken together enable 
us to form an opinion on the consolidated financial statements under international standards on auditing 
uk and ireland we take into account the size risk profile changes in the business environment and 
other factors when assessing the level of work to be performed at each entity the range of performance 
materiality allocated to components in 2014 was us 17 million to us 64 million 
in establishing our overall approach to the group audit we determined the type of work that needed to be 
undertaken at each of the components by us as the group engagement team or by component auditors 
from another ey global network firm operating under our instructions  the group engagement team 
performed the audit of the consolidation in amsterdam in assessing the risk of material misstatement to 
the group financial statements our group audit scope focused on the group’s main operating locations 
we selected five components covering entities within the netherlands belgium and kazakhstan which 
represent the principal business units within the group and account for 99 of the group’s profit before 
tax two of these components were subject to a full scope audit whereas the remaining three were 
subject to audit procedures on specific accounts based on our risk assessment the two full scope 
components account for 97 of the group net assets 99 of the group’s revenue and 99 of the 
group’s profit before tax the specific scope locations do not have operating activities and we audited 
cash payroll the employee share option plan other current liabilities and the costs associated with the 
reorganisation of the group 
we are satisfied that the components selected have provided an appropriate basis for undertaking audit 
work to address the risks of material misstatement identified below the audit work performed at the five 
components was executed based on levels of materiality applicable to each individual entity these 
materiality thresholds were lower than group materiality for the remaining components we assessed 
group wide controls and performed analytical reviews and enquiry procedures to address the residual risk 
of material misstatement 
the group audit team followed a programme of planned site visits that was designed to ensure that a 
senior member of the team visited each of the three audit locations at least once a year in 2014 the 
group audit team including the senior statutory auditor who leads the audit visited kazakhstan where 
the operations of the group take place  these visits involved discussing the audit approach and any 
issues arising from the work with the component team  the group audit team interacted regularly with the 
component team during various stages of the audit reviewed key working papers and were responsible 
for the scope and the direction of the audit process  this together with the additional procedures 
performed at group level in amsterdam gave us appropriate audit evidence for our opinion on the group 
financial statements 
our assessment of risks of material misstatement 
we designed our audit by determining materiality and assessing the risks of material misstatement in the 
financial statements in particular we looked at where the directors made subjective judgements for 
example in respect of significant accounting estimates that involved making assumptions and considered 
future events that are inherently uncertain as in all our audits we also addressed the risk of management 
override of internal controls including evaluating whether there is evidence of bias by the directors that 
may represent a risk of material misstatement due to fraud   strategic report corporate governance financial report additional disclosures regulatory information
103 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 we have identified the risks of material misstatement which had the greatest effect on the audit strategy 
and directed the efforts and resources of the engagement team to 
 impairment of exploration licenses and goodwill 
 estimation of oil and gas reserves and its impact of the estimation of dda expense 
 revenue recognition 
 completeness of related party transactions and the related disclosures 
 risk of management override 
our responses to the risk of material misstatement identified 
 impairment of exploration licenses and goodwill 
refer to the group audit committee report on page 78 the estimates and judgments on page 123 and the disclosures  
in note 6 of the group financial statements 
the potential impairment of goodwill and 
exploration licenses is a key area of audit focus 
due to their value further management are 
required to make a number of significant 
judgements in determining the recognition of 
and the carrying value of these assets and in 
determining whether there are any indicators of 
impairment the fall in oil prices will impact 
financial performance as well as increase the risk 
of uncommercial exploration activities and 
potential nonrenewal of exploration licenses 
we focused on this area as it involves complex and 
subjective judgements about forecasts in evaluating 
whether any impairment was necessary to the remaining 
carrying value of goodwill and other assets our audit 
work involved obtaining evidence regarding their 
recoverable amount  we utilised our valuation 
specialists and challenged management’s impairment 
assessment by evaluating  the  following key 
assumptions 
 forecast cash flows by comparing the assumptions 
used within the impairment model to the approved 
budgets business plans and other evidence of 
future intentions 
 forecast oil prices  were compared to independent 
external sources and 
 the discount rate was benchmarked to the risks 
faced by the group 
 
we assessed the historical accuracy of management’s 
budgets and forecasts by comparing them to actual 
performance we evaluated management’s sensitivity 
analysis of goodwill impairment testing in order to 
assess the potential impact of a range of reasonably 
possible outcomes we evaluated the financial 
statement disclosures for compliance with the 
requirements of accounting standards 
estimation of oil and gas reserves and its impact of the estimation of depreciation depletion 
and amortisation “dda” expense 
refer to the group audit committee report on page 78 the estimates and judgments on page 122 and the disclosures 
in note 8 of the group financial statements 
this was considered to be a significant risk due 
to the subjective nature of reserves estimates and 
we gained an understanding of the group’s internal 
process for reserves estimation and challenged  104 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 their impact on the financial statements through 
impairment and dda calculations management 
has engaged a third party expert in connection 
with the estimation of reserves 
management’s assumptions including commercial 
assumptions to ensure that they are based on 
supportable evidence  in doing so we have 
 met with management’s  third party expert during 
the planning and execution of the audit and 
assessed their competence as well as that of 
internal specialists involved in due diligence 
procedures over oil and gas reserves 
 reviewed the final oil and gas reserves estimation 
report prepared by management’s third party 
expert in light of our understanding of the business 
and agreed key financial inputs to corroborative 
evidence and 
 assessed the reasonableness of  key assumptions 
such as oil price gas and lpg price opex and 
capex per barrel by comparing them to external 
data 
revenue recognition 
refer to the group audit committee report on page 78and the disclosures of revenue in note 22 of the group 
financial statements 
the risk of recognising revenue in the wrong 
period is heightened due to the complexity of the 
production sharing agreement “the psa” and 
the point at which title passes to the customer 
and therefore revenue can be recognised 
 
we identified and tested controls over the sales process 
made enquiries of management and analysed contracts 
to evaluate whether revenue was recognised in 
accordance with the terms we specifically 
 audited sales agreements to understand the 
contractual terms and checked compliance with 
the psa and appropriate revenue recognition 
 performed analytical procedures test of details 
cutoff testing on customer delivery notes around  
period end and tested a sample of journals relating 
to revenue and  
 ensured that the financial statement disclosures 
were in accordance with accounting standards 
 
completeness of related party transactions “rpt” and the related disclosures 
refer to the group audit committee report on page 78 and the disclosures of related party transactions in note 32 of 
the group financial statements 
as part of the premium listing on the lse the 
group undertook restructuring activities and has 
entered into material contracts with related 
parties therefore rpts and the related 
disclosures are considered to be a significant 
risk 
 
in order to obtain evidence over the completeness of 
related party transactions and the related disclosures 
we have 
 
 obtained an understanding of the process that 
management has established to identify account 
for and disclose rpts and  authorise and approve 
significant rpts and arrangements outside the 
normal course of business 
 inspected bank and legal confirmations minutes of 
meetings and significant agreements with new 
counterparties 
 obtained sufficient evidence that rpts were 
conducted on terms equivalent to an arm’s length 
transaction 
 obtained an updated list of all related parties to the  strategic report corporate governance financial report additional disclosures regulatory information
105 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 group and reviewed the general ledger against 
this list to ensure completeness of transactions 
 investigated any unusual or high value 
transactions 
 made enquiries of management in order to identify 
if any related party transactions outside the normal 
course of business have taken place and 
 verified the completeness of disclosures in the 
financial statements 
 
risk of management override 
we consider the likelihood of management 
override occurring we base our consideration 
on our understanding of the nature and risk of 
both management’s opportunity and incentive to 
manipulate earnings or financial ratios or to 
misappropriate assets 
 
specifically we considered the heightened 
expectations following the premium listing of the 
group on the lse and the sizable shareholdings 
of senior executives 
 
we considered whether there was evidence of bias by 
the directors in significant accounting estimates and 
judgements  we tested journal entries and also 
assessed the control environment and interviewed 
internal audit 
 
respective responsibilities of directors and auditor 
as explained more fully in the directors’ responsibilities statement set out on page 97 the directors are 
responsible for the preparation of the group and parent financial statements and for being satisfied that 
they give a true and fair view our responsibility is to audit and express an opinion on the group and parent 
financial statements in accordance with applicable law and international standards on auditing uk and 
ireland those standards require us to comply with the auditing practices board’s ethical standards for 
auditors 
matters on which we are required to report by exception 
we have nothing to report in respect of the following  
under the isas uk and ireland we are required to report to you if in our opinion information in the 
annual report is  
 materially inconsistent with the information in the audited financial statements; or  
 apparently materially incorrect based on or materially inconsistent with our knowledge of the group 
acquired in the course of performing our audit; or  
 is otherwise misleading  
in particular we are required to consider whether we have identified any inconsistencies between our 
knowledge acquired during the audit and the directors’ statement that they consider the annual report is 
fair balanced and understandable and whether the annual report appropriately discloses those matters 
that we communicated to the audit committee which we consider should have been disclosed  
under the companies act 2006 we are required to report to you if in our opinion  106 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 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 and the part of the directors’ remuneration report to be 
audited 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 
under the listing rules we are required to review  
 the directors’ statement set out on page 95 in relation to going concern; and  
 the part of the corporate governance statement relating to the company’s compliance with the nine 
provisions of the uk corporate governance code specified for our review 
 
richard addison senior statutory auditor 
for and on behalf of ernst  young llp statutory auditor 
london 
24 march 2015  strategic report corporate governance financial report additional disclosures regulatory information
107 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
the accounting policies and explanatory notes on pages 111 through 157 are an integral part of these consolidated 
financial statements 
consolidated statement of financial position 
as at 31 december 2014 
in thousands of us dollars  notes 31 december 2014  31 december 2013  
    
assets    
noncurrent assets    
exploration and evaluation assets 7 24380 20434 
goodwill 6 32425 30386 
property plant and equipment 8 1442157 1330903 
restricted cash 14 5024 4217 
advances for noncurrent assets 9 134355 10037 
derivative financial instruments 29 60301 – 
noncurrent investments 13 – 30000 
  1698642 1425977 
    
current assets    
inventories 10 25443 22085 
trade receivables 11 30110 66565 
prepayments and other current assets 12 39642 31192 
income tax prepayment  13925 5042 
current investments 13 25000 25000 
cash and cash equivalents 14 375443 184914 
  509563 334798 
    
total assets  2208205 1760775 
    
equity and liabilities    
share capital and reserves 15   
share capital  3203 – 
treasury capital  1888 30751 
partnership capital  – 380874 
additional paidin capital  – 8126 
retained earnings and reserves  916365 474202 
  917680 832451 
    
noncurrent liabilities    
longterm borrowings 17 930090 621160 
abandonment and site restoration provision 18 20877 13874 
due to government of kazakhstan 19 5906 6021 
deferred tax liability 31 206784 152545 
  1163657 793600 
    
current liabilities    
current portion of longterm borrowings 17 15024 7263 
employee share option plan liability 28 6449 12016 
trade payables 20 49619 58518 
advances received  2670 36 
income tax payable  1459 1232 
current portion of due to government of kazakhstan 19 1031 1031 
other current liabilities 21 50616 54628 
  126868 134724 
    
total equity and liabilities  2208205 1760775 
the consolidated financial statements of nostrum oil  gas plc registered number 8717287 were approved by the 
board of directors signed on behalf of the board 
 
      
kaiuwe kessel     janru muller 
chief executive officer    chief financial officer  108 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
the accounting policies and explanatory notes on pages 111 through 157 are an integral part of these consolidated 
financial statements 
consolidated statement of comprehensive income 
for the year ended 31 december 2014 
 
in thousands of us dollars  notes 2014  2013  
    
revenue    
revenue from export sales  676064 765029 
revenue from domestic sales  105814 129985 
 22 781878 895014 
    
cost of sales 23 221921 286222 
gross profit  559957 608792 
    
general and administrative expenses 24 54878 56019 
selling and transportation expenses  25 122254 121674 
finance costs 26 61939 43615 
finance costs  reorganisation 27 29572 – 
employee share option plan fair value adjustment  3092 4430 
foreign exchange loss  4235 636 
gain on derivative financial instruments 29 60301 – 
interest income  986 764 
other expenses 30 49844 25593 
other income  10086 4426 
profit before income tax  311700 362015 
    
income tax expense 31 165275 142496 
profit for the year  146425 219519 
    
total comprehensive income for the year  146425 219519 
    
    
profit for the year attributable to the holders of common 
unitsshares in thousands of us dollars  146425 219519 
weighted average number of common unitsshares  184678352 185289560 
basic and diluted earnings per common unitshare in us 
dollars  079 118 
    
 all items in the above statement are derived from continuous operations  strategic report corporate governance financial report additional disclosures regulatory information
109 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
the accounting policies and explanatory notes on pages 111 through 157 are an integral part of these consolidated 
financial statements 
consolidated statement of cash flows 
for the year ended 31 december 2014 
   
in thousands of us dollars  notes 2014  2013  
    
cash flow from operating activities    
profit before income tax  311700 362015 
adjustments for    
depreciation depletion and amortisation 2324 111869 120370 
finance costs  reorganisation 27 29572 – 
finance costs 26 61939 43615 
employee share option plan fair value adjustment  3093 4430 
interest income  986 764 
foreign exchange gainloss on investing and financing activities  574 48 
gain on derivative financial instruments 29 60301 – 
accrued liabilities  2296 – 
operating profit before working capital changes  447830 529714 
changes in working capital    
change in inventories  3358 2879 
change in trade receivables  36455 12561 
change in prepayments and other current assets  7714 6823 
change in trade payables  5633 5747 
change in advances received  2921 23 
change in due to government of kazakhstan  1032 1031 
change in other current liabilities  341 8803 
payments under employee share option plan  2475 2202 
cash generated from operations  467335 513009 
income tax paid  118213 154455 
net cash flows from operating activities  349122 358554 
    
cash flow from investing activities    
interest received  986 764 
purchase of property plant and equipment  325462 201306 
purchase of exploration and evaluation assets 7 10445 5045 
acquisition of subsidiaries  372 28433 
placement of bank deposits  25000 30000 
redemption of bank deposits  55000 25000 
net cash used in investing activities  304549 239020 
    
cash flow from financing activities    
finance costs paid  62229 49613 
issue of notes 17 400000 – 
expenses paid on arrangement of notes  6525 – 
repayment of notes  92505 – 
transfer to restricted cash  807 565 
treasury shares soldpurchased  3715 18993 
distributions paid 15 64615 63179 
funds borrowed  reorganisation 27 2350405 – 
funds repaid  reorganisation  2350405 – 
finance costs  reorganisation  29572 – 
net cash from  used in financing activities  147462 132350 
    
effects of exchange rate changes on cash and cash equivalents  1506 – 
    
net increasedecrease in cash and cash equivalents  190529 12816 
cash and cash equivalents at the beginning of the year 14 184914 197730 
cash and cash equivalents at the end of the year 14 375443 184914 
during the year ended 31 december 2014 noncash transactions included offset of tax liabilities in the amount of 
us9426 thousand including corporate income tax liabilities in the amount of us2480 thousand with value added 
tax receivables 110 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
the accounting policies and explanatory notes on pages 111 through 157 are an integral part of these consolidated financial statements 
consolidated statement of changes in equity 
for the year ended 31 december 2014 
in thousands of us dollars  notes 
share 
capital 
share 
premium 
partnership 
capital 
treasury 
capital 
additional 
paidin 
capital 
other 
reserves 
retained 
earnings total 
          
as at 1 january 2013   – – 380874 9727 6095 3437 314425 695104 
          
profit for the year  – – – – – – 219519 219519 
total comprehensive income for the year  – – – – – – 219519 219519 
          
buyback of gdrs  – – – 22165 – – – 22165 
sale of treasury capital   – – – 1141 2031 – – 3172 
profit distribution   – – – – – – 63179 63179 
as at 31 december 2013   – – 380874 30751 8126 3437 470765 832451 
          
profit for the year  – – – – – – 146425 146425 
total comprehensive income for the year  – – – – – – 146425 146425 
          
sale of treasury capital  – – – 440 769 – – 1209 
profit distribution  15 – – – – – – 64615 64615 
group reorganisation         – 
replacement of gdrs  – – 380874 30311 8895 255459 – 103999 
issue of share capital  3203 102797 – 2001 – – – 103999 
effect of the group reorganisation 15 3203 102797 380874 28310 8895 255459 – – 
transfer to distributable reserves  – 102797 – – – – 102797 – 
sale of treasury capital  – – – 113 – 2393 – 2506 
transaction costs   – – – – – – 296 296 
as at 31 december 2014  3203 – – 1888 – 261289 655076 917680 
110 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
the accounting policies and explanatory notes on pages 111 through 157 are an integral part of these consolidated financial statements 
consolidated statement of changes in equity 
for the year ended 31 december 2014 
in thousands of us dollars  notes 
share 
capital 
share 
premium 
partnership 
capital 
treasury 
capital 
additional 
paidin 
capital 
other 
reserves 
retained 
earnings total 
          
as at 1 january 2013   – – 380874 9727 6095 3437 314425 695104 
          
profit for the year  – – – – – – 219519 219519 
total comprehensive income for the year  – – – – – – 219519 219519 
          
buyback of gdrs  – – – 22165 – – – 22165 
sale of treasury capital   – – – 1141 2031 – – 3172 
profit distribution   – – – – – – 63179 63179 
as at 31 december 2013   – – 380874 30751 8126 3437 470765 832451 
          
profit for the year  – – – – – – 146425 146425 
total comprehensive income for the year  – – – – – – 146425 146425 
          
sale of treasury capital  – – – 440 769 – – 1209 
profit distribution  15 – – – – – – 64615 64615 
group reorganisation         – 
replacement of gdrs  – – 380874 30311 8895 255459 – 103999 
issue of share capital  3203 102797 – 2001 – – – 103999 
effect of the group reorganisation 15 3203 102797 380874 28310 8895 255459 – – 
transfer to distributable reserves  – 102797 – – – – 102797 – 
sale of treasury capital  – – – 113 – 2393 – 2506 
transaction costs   – – – – – – 296 296 
as at 31 december 2014  3203 – – 1888 – 261289 655076 917680  strategic report corporate governance financial report additional disclosures regulatory information
111 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 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 4th floor 5354 grosvenor street london uk w1k 3hu 
the parent became the holding company of the remainder of the group via its subsidiary nostrum oil coöperatief 
ua on 18 june 2014 and was listed on the london stock exchange “lse” on 20 june 2014 note 15 on the 
same date the former parent of the group nostrum oil  gas lp was delisted from the lse in addition to the 
subsidiaries of nostrum oil  gas lp nostrum oil coöperatief ua acquired substantially all of the assets and 
liabilities of nostrum oil  gas lp on 18 june 2014 the parent does not have an ultimate controlling party 
these consolidated financial statements include the financial position and the results of the operations of nostrum 
oil  gas plc and its following wholly owned subsidiaries  
company 
country of registration or 
incorporation form of capital ownership  
    
claydon industrial limited british virgin islands ordinary shares 100 
condensate holding llp republic of kazakhstan participatory interests 100 
grandstil llc russian federation participatory interests 100 
investprofi llc russian federation participatory interests 100 
jubilata investments limited british virgin islands ordinary shares 100 
nostrum oil  gas finance bv netherlands ordinary shares 100 
nostrum oil  gas uk ltd england and wales ordinary shares 100 
nostrum oil bv netherlands ordinary shares 100 
nostrum oil coöperatief ua netherlands members interests 100 
probel capital management nv belgium ordinary shares 100 
prolag bvba belgium ordinary shares 100 
zhaikmunai llp republic of kazakhstan participatory interests 100 
zhaikmunai netherlands bv netherlands ordinary shares 100 
 nostrum oil  gas plc its whollyowned subsidiaries and amersham oil llp are hereinafter referred to as “the 
group” the group’s operations comprise of a single operating segment with three exploration concessions and are 
primarily conducted through its oil and gas producing entity zhaikmunai llp located in kazakhstan  
as at 31 december 2014 the group employed 1005 employees 
sale and purchase agreements for the acquisition of amersham oil llp “amersham” and prolag bvba “prolag” 
were entered into on 19 may 2014 by nostrum oil coöperatief ua under the terms of the sale and purchase 
agreements the group controls the entities and has the economic risk and benefit in the entities since 19 may 2014 
subsoil use rights terms 
zhaikmunai llp carries out its activities in accordance with the contract for additional exploration production and 
productionsharing 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 
on 17 august 2012 zhaikmunai llp signed asset purchase agreements to acquire 100 of the subsoil use rights 
related to three oil and gas fields – rostoshinskoye darjinskoye and yuzhnogremyachinskoye – all located in the 
western kazakhstan region on 1 march 2013 zhaikmunai llp has acquired the subsoil use rights related to these  112 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 three oil and gas fields in kazakhstan following the signing of the respective supplementary agreements related 
thereto by the ministry of oil and gas the “mog” of the republic of kazakhstan 
the term of the chinarevskoye subsoil use rights originally included a 5year exploration period and a 25year 
production period the exploration period was initially extended for additional 4 years and then for further 2 years 
according to the supplements to the contract dated 12 january 2004 and 23 june 2005 respectively in accordance 
with the supplement dated 5 june 2008 tournaisian north reservoir entered into production period as at 1 january 
2007 following additional commercial discoveries during 2008 the exploration period under the chinarevskoye 
subsoil use rights other than for the tournaisian horizons was extended for an additional 3year period which 
expired on 26 may 2011 a further extension to 26 may 2014 was made under the supplement dated 28 october 
2013 the extensions to the exploration periods have not changed the chinarevskoye subsoil use rights term which 
expires in 2031 zhaikmunai llp applied to the mog for another extension of the exploration period 
the contract for exploration and production of hydrocarbons from rostoshinskoye field dated 8 february 2008 
originally included a 3year exploration period and a 12year production period on 27 april 2009 the exploration 
period was extended so as to have a total duration of 6 years in january 2012 the mog made the decision to extend 
the exploration period until 8 february 2015 and the corresponding supplementary agreement between mog and 
zhaikmunai llp was signed on 9 august 2013 note 36 
the contract for exploration and production of hydrocarbons from darjinskoye field dated 28 july 2006 originally 
included a 6year exploration period and a 19year production period on 21 october 2008 the exploration period 
was extended for 6 months so as to expire on 28 january 2013 on 27 april 2009 the exploration period was 
extended until 28 january 2015 on 23 january 2014 the exploration period was further extended until 31 december 
2015 
the contract for exploration and production of hydrocarbons from yuzhnogremyachinskoye field dated 28 july 
2006 originally included a 5year exploration period and a 20year production period on 27 april 2009 the 
exploration period was extended until 28 july 2012 on 8 july 2011 the exploration period was further extended until 
28 july 2014 on 23 january 2014 the exploration period was further extended until 31 december 2015 
royalty payments 
zhaikmunai llp is required to make monthly royalty payments throughout the entire 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 of its “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 
change in estimates 
the volumes of hydrocarbons extracted and the sales prices of the products form the basis of the royalty and 
government profit share calculations during the year ended 31 december 2014 zhaikmunai llp changed the 
calculation of the coefficient of natural gas equivalent from density ratio used in the prior periods to compression 
ratio based on newly received researches on the conversion coefficient conducted by independent consultants 
as a result zhaikmunai llp revised the calculations of the royalty and government profit share for the prior periods 
this change in estimate was applied prospectively since updated information on composition of the natural gas 
became available only in 2014 also during the year ended 31 december 2014 zhaikmunai llp reassessed the  strategic report corporate governance financial report additional disclosures regulatory information
113 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 government profit share for 2013 following the revision of the work program for the chinarevskoye oil and gas 
condensate field operations 
this change in estimate was applied prospectively since updated information on composition of the natural gas 
became available only in 2014 
2 basis of preparation and consolidation 
basis of preparation 
these consolidated financial statements for the year ended 31 december 2014 have been prepared in accordance 
with international financial reporting standards “ifrs” issued by international accounting standards board 
“iasb” as adopted by the european union and the requirements of the disclosure and transparency rules 
“dtr” of the financial conduct authority “fca” in the united kingdom as applicable to annual financial 
statements  
the consolidated financial statements have been prepared based on a historical cost basis except for certain financial 
instruments which are carried at fair value as stated in the accounting policies note 4 the consolidated financial 
statements are presented in us dollars and all values are rounded to the nearest thousands 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 
groups 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 
basis of consolidation 
the consolidated financial statements comprise the financial statements of the parent and its subsidiaries as at 31 
december 2014 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 ie 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 result 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 reassesses 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  114 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 group reorganisation 
the group has been formed through a reorganisation in which nostrum oil  gas plc became a new parent entity of 
the group note 15 the reorganisation is not a business combination and does not result in any change of economic 
substance of the group accordingly the consolidated financial statements of nostrum oil  gas plc are a 
continuation of the existing group nostrum oil  gas lp and its subsidiaries the consolidated financial 
statements reflect the difference in share capital as an adjustment to equity other reserves that is not subject to 
reclassification to income statement in the future periods 
going concern 
these consolidated financial statements have been prepared on a going concern basis the directors are satisfied that 
the group 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 the 
consolidated financial statements 
3 changes in accounting policies and disclosures 
new standards interpretations and amendments thereof adopted by the group  
the accounting policies adopted are consistent with those of the previous financial year except for the following 
amendments to ifrs effective as at 1 january 2014 
amendments to ifrs 10 ifrs12 and ias 27 – investment entities 
these amendments provide an exception to the consolidation requirement for entities that meet the definition of an 
investment entity under ifrs 10 consolidated financial statements and must be applied retrospectively subject to 
certain transition relief the exception to consolidation requires investment entities to account for subsidiaries at fair 
value through profit or loss these amendments have no impact on the group since none of the entities in the group 
qualifies to be an investment entity under ifrs 10 
ias 32 offsetting financial assets and financial liabilities – amendments to ias 32 
these amendments clarify the meaning of currently has a legally enforceable right to setoff and the criteria for non
simultaneous settlement mechanisms of clearing houses to qualify for offsetting and is applied retrospectively these 
amendments have no impact on the group since none of the entities in the group has any offsetting arrangements  
amendments to ias 36 – disclosures on recoverable amount for nonfinancial assets 
these amendments eliminate unintended consequences of ifrs 13 fair value measurement in part of information 
disclosure according to ias 36 asset impairment besides these amendments require disclosing the recoverable 
amount of assets or cash generation unit “cgu” on which the impairment loss was recognized or recovered during 
the reporting period these amendments had no impact on the consolidated financial statements of the group 
amendment to ias 39 novation of derivatives and continuation of hedge accounting 
these amendments provide relief from discontinuing hedge accounting when novation of a derivative designated as a 
hedging instrument meets certain criteria and retrospective application is required these amendments have no 
impact on the group as the group has not novated its derivatives during the current or prior periods 
ifric 21 levies 
ifric 21 clarifies that an entity recognises a liability for a levy when the activity that triggers payment as identified 
by the relevant legislation occurs for a levy that is triggered upon reaching a minimum threshold the interpretation 
clarifies that no liability should be anticipated before the specified minimum threshold is reached retrospective 
application is required for ifric 21 this interpretation has no impact on the group as it has applied the recognition  strategic report corporate governance financial report additional disclosures regulatory information
115 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 principles under ias 37 provisions contingent liabilities and contingent assets consistent with the requirements of 
ifric 21 in prior years 
standards issued but not yet effective 
the standards and interpretations that are issued but not yet effective up to the date of issuance of the group’s 
consolidated financial statements are disclosed below the group intends to adopt these standards if applicable 
when they become effective 
ifrs 9 financial instruments 
in july 2014 the iasb issued the final version of ifrs 9 financial instruments which reflects all phases of the 
financial instruments project and replaces ias 39 financial instruments recognition and measurement and all 
previous versions of ifrs 9 the standard introduces new requirements for classification and measurement 
impairment and hedge accounting ifrs 9 is effective for annual periods beginning on or after 1 january 2018 with 
early application permitted retrospective application is required but comparative information is not compulsory 
early application of previous versions of ifrs 9 2009 2010 and 2013 is permitted if the date of initial application 
is before 1 february 2015 the adoption of ifrs 9 is not expected to have an effect on the classification and 
measurement of the group’s financial assets and the group’s financial liabilities 
ifrs 14 regulatory deferral accounts 
ifrs 14 is an optional standard that allows an entity whose activities are subject to rateregulation to continue 
applying most of its existing accounting policies for regulatory deferral account balances upon its firsttime adoption 
of ifrs entities that adopt ifrs 14 must present the regulatory deferral accounts as separate line items on the 
statement of financial position and present movements in these account balances as separate line items in the 
statement of profit or loss and other comprehensive income the standard requires disclosures on the nature of and 
risks associated with the entity’s rateregulation and the effects of that rateregulation on its financial statements 
ifrs 14 is effective for annual periods beginning on or after 1 january 2016 since the group is an existing ifrs 
preparer this standard does not apply 
amendments to ias 19 defined benefit plans employee contributions 
ias 19 requires an entity to consider contributions from employees or third parties when accounting for defined 
benefit plans where the contributions are linked to service they should be attributed to periods of service as a 
negative benefit these amendments clarify that if the amount of the contributions is independent of the number of 
years of service an entity is permitted to recognise such contributions as a reduction in the service cost in the period 
in which the service is rendered instead of allocating the contributions to the periods of service this amendment is 
effective for annual periods beginning on or after 1 july 2014 it is not expected that this amendment would be 
relevant to the group since none of the entities within the group have defined benefit plans with contributions from 
employees or third parties 
annual improvements 20102012 cycle 
these improvements are effective from 1 july 2014 and are not expected to have a material impact on the group 
they include 
ifrs 2 sharebased payment 
this improvement is applied prospectively and clarifies various issues relating to the definitions of performance and 
service conditions which are vesting conditions including  
 a performance condition must contain a service condition  
 a performance target must be met while the counterparty is rendering service 
 a performance target may relate to the operations or activities of an entity or to those of another entity 
in the same group  116 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 a performance condition may be a market or nonmarket condition 
 if the counterparty regardless of the reason ceases to provide service during the vesting period the 
service condition is not satisfied 
it is not expected that this amendment would have impact on the group’s future consolidated financial statements 
ifrs 3 business combinations 
the amendment is applied prospectively and clarifies that all contingent consideration arrangements classified as 
liabilities or assets arising from a business combination should be subsequently measured at fair value through 
profit or loss whether or not they fall within the scope of ifrs 9 or ias 39 as applicable it is not expected that 
this amendment would have any impact on the group’s future consolidated financial statements 
ifrs 8 operating segments 
the amendments are applied retrospectively and clarify that 
 an entity must disclose the judgements made by management in applying the aggregation criteria in 
paragraph 12 of ifrs 8 including a brief description of operating segments that have been aggregated and 
the economic characteristics eg sales and gross margins used to assess whether the segments are 
‘similar’ 
 the reconciliation of segment assets to total assets is only required to be disclosed if the reconciliation is 
reported to the chief operating decision maker similar to the required disclosure for segment liabilities 
these amendments are not expected to have any impact on the group’s financial position or performance  
ias 16 property plant and equipment and ias 38 intangible assets 
the amendment is applied retrospectively and clarifies in ias 16 and ias 38 that the asset may be revalued by 
reference to observable data on either the gross or the net carrying amount in addition the accumulated depreciation 
or amortisation is the difference between the gross and carrying amounts of the asset these amendments are not 
expected to have any impact on the group’s future consolidated financial statements considering that the groups 
property plant and equipment are stated at historical cost 
ias 24 related party disclosures  
the amendment is applied retrospectively and clarifies that a management entity an entity that provides key 
management personnel services is a related party subject to the related party disclosures in addition an entity that 
uses a management entity is required to disclose the expenses incurred for management services these amendments 
are not expected to have effect on the group’s future consolidated financial statements since the group always 
disclosed the companies providing management services as related parties 
annual improvements 20112013 cycle 
these improvements are effective from 1 july 2014 and are not expected to have a material impact on the group 
they include 
ifrs 3 business combinations 
the amendment is applied prospectively and clarifies for the scope exceptions within ifrs 3 that 
 joint arrangements not just joint ventures are outside the scope of ifrs 3 
 this scope exception applies only to the accounting in the financial statements of the joint arrangement 
itself  
these amendments are not expected to have impact on the group’s future consolidated financial statements since the 
group has no joint arrangements   strategic report corporate governance financial report additional disclosures regulatory information
117 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 ifrs 13 fair value measurement 
the amendment is applied prospectively and clarifies that the portfolio exception in ifrs 13 can be applied not only 
to financial assets and financial liabilities but also to other contracts within the scope of ifrs 9 or ias 39 as 
applicable it is not expected that the amendment will have material effect on the group’s financial position or 
performance 
ias 40 investment property  
the description of ancillary services in ias 40 differentiates between investment property and owneroccupied 
property ie property plant and equipment the amendment is applied prospectively and clarifies that ifrs 3 and 
not the description of ancillary services in ias 40 is used to determine if the transaction is the purchase of an asset 
or business combination 
these amendments are not expected to have any impact on the group 
ifrs 15 revenue from contracts with customers 
ifrs 15 was issued in may 2014 and establishes a new fivestep model that will apply to revenue arising from 
contracts with customers under ifrs 15 revenue is recognised at an amount that reflects the consideration to which 
an entity expects to be entitled in exchange for transferring goods or services to a customer 
the principles in ifrs 15 provide a more structured approach to measuring and recognising revenue the new 
revenue standard is applicable to all entities and will supersede all current revenue recognition requirements under 
ifrs either a full or modified retrospective application is required for annual periods beginning on or after 1 
january 2017 with early adoption permitted the group is currently assessing the impact of ifrs 15 and plans to 
adopt the new standard on the required effective date 
amendments to ifrs 11 joint arrangements accounting for acquisitions of interests 
the amendments to ifrs 11 require that a joint operator accounting for the acquisition of an interest in a joint 
operation in which the activity of the joint operation constitutes a business must apply the relevant ifrs 3 principles 
for business combinations accounting the amendments also clarify that a previously held interest in a joint operation 
is not remeasured on the acquisition of an additional interest in the same joint operation while joint control is 
retained in addition a scope exclusion has been added to ifrs 11 to specify that the amendments do not apply when 
the parties sharing joint control including the reporting entity are under common control of the same ultimate 
controlling party 
the amendments apply to both the acquisition of the initial interest in a joint operation and the acquisition of any 
additional interests in the same joint operation and are prospectively effective for annual periods beginning on or 
after 1 january 2016 with early adoption permitted these amendments are not expected to have any impact to the 
group 
amendments to ias 16 and ias 38 clarification of acceptable methods of depreciation and amortisation 
the amendments clarify the principle in ias 16 and ias 38 that revenue reflects a pattern of economic benefits that 
are generated from operating a business of which the asset is part rather than the economic benefits that are 
consumed through use of the asset as a result a revenuebased method cannot be used to depreciate property plant 
and equipment and may only be used in very limited circumstances to amortise intangible assets 
the amendments are effective prospectively for annual periods beginning on or after 1 january 2016 with early 
adoption permitted these amendments are not expected to have any impact on the group given that the group has 
not used a revenuebased method to depreciate its noncurrent assets 
amendments to ias 27 equity method in separate financial statements 
the amendments will allow entities to use the equity method to account for investments in subsidiaries joint 
ventures and associates in their separate financial statements entities already applying ifrs and electing to change  118 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 to the equity method in its separate financial statements will have to apply that change retrospectively for firsttime 
adopters of ifrs electing to use the equity method in their separate financial statements they will be required to 
apply this method from the date of transition to ifrs the amendments are effective for annual periods beginning on 
or after 1 january 2016 with early adoption permitted these amendments are not expected to have any impact on 
the group’s consolidated financial statements  
4 summary of significant accounting policies 
significant accounting judgments estimates and assumptions 
the key assumptions concerning the future and other key sources of estimation uncertainty at the statement of 
financial position date that have a significant risk of causing a material change to the carrying amounts of assets and 
liabilities are discussed below 
oil and gas reserves 
oil and gas reserves are a material factor in the group’s computation of depreciation depletion and amortization 
the “dda” the group estimates its reserves of oil and gas in accordance with the methodology of the society of 
petroleum engineers the “spe” in estimating its reserves under spe methodology the group uses longterm 
planning prices which are also used by management to make investment decisions about development of a field 
using planning prices for estimating proved reserves removes the impact of the volatility inherent in using yearend 
spot prices management believes that longterm planning price assumptions note 6 are more consistent with the 
longterm nature of the upstream business and provide the most appropriate basis for estimating oil and gas reserves 
all reserve estimates involve some degree of uncertainty the uncertainty depends mainly on the amount of reliable 
geological and engineering data available at the time of the estimate and the interpretation of this data  
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 subclassified as developed and undeveloped to denote progressively increasing uncertainty in their 
recoverability estimates are reviewed and revised annually  
revisions occur due to the evaluation or reevaluation 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 proved developed 
reserves are used to calculate the unit of production rates for dda the estimates of economically recoverable oil 
and gas reserves and related future net cash flows also impact the impairment assessment of the group 
fair value of financial instruments 
where the fair value of financial assets and financial liabilities recorded in the statement of financial position cannot 
be derived from active markets they are determined using valuation techniques including the discounted cash flows 
model the inputs to these models are taken from observable markets where possible but where this is not feasible a 
degree of judgment is required in establishing fair values the judgments include considerations of inputs such as 
liquidity risk credit risk and volatility changes in assumptions about these factors could affect the reported fair 
value of financial instruments 
abandonment and site restoration provision 
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 adjusted for expected inflation and discounted at applicable rate the group reviews site restoration 
provisions at each date of financial position and adjusts it to reflect the current best estimate in accordance with  strategic report corporate governance financial report additional disclosures regulatory information
119 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 ifric 1 changes in existing decommissioning restoration and similar liabilities estimating the future closure 
costs involves significant estimates and judgments by management significant judgments in making such estimates 
include estimate of discount rate and timing of cash flow the management made its estimate based on the 
assumption that cash flow will take place at the expected end of the subsoil use rights  
management of the group believes that the long term interest rates on the eurobonds issued by the ministry of 
finance of the republic of kazakhstan shall provide best estimates of applicable risk uncorrected discount rate the 
discount rate shall be applied to the nominal risk adjusted amounts the management expects to spend on site 
restoration in the future the group estimates future well abandonment cost using current year prices and the average 
longterm inflation rate 
due to fact that cash outflows related to abandonment and site restoration cost are mainly denominated in usd 
during the year ended 31 december 2014 the group revisited the assumptions used including abandonment cost 
us inflation rate and discount rates all these changes resulted in increase of abandonment and site restoration 
provision and respective asset in the amount of us 4306 thousand these changes were accounted for 
prospectively 
the long term inflation and discount rates used to determine the balance sheet obligation at 31 december 2014 were 
375 and 488 respectively movements in the provision for decommissioning liability are disclosed in note 18 
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 longterm 
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 
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 
currency of the group’s subsidiaries is the us dollar except for condensate functional currency of which is 
kazakhstani tenge the “tenge” 
transactions and balances denominated in foreign currencies 
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 
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 nonmonetary 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 nonmonetary items 
measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is 
determined  120 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 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 for which fair values cannot be reliably 
measured are not recognised separately but instead are subsumed in goodwill  
if the business combination is achieved in stages any previously held equity interest is remeasured at its acquisition 
date fair value and any resulting gain or loss is recognised in the statement of profit or loss and other comprehensive 
income it is then considered in the determination of goodwill any contingent consideration to be transferred by the 
acquirer will be recognised at fair value at the acquisition date all contingent consideration arrangements classified 
as liabilities or assets arising from a business combination are subsequently measured at fair value through profit or 
loss whether or not they fall within the scope of ifrs 9 or ias 39 as applicable 
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 
property plant and equipment 
exploration expenditure 
geological and geophysical exploration costs are charged to profit or loss as incurred costs directly associated with 
exploration wells are capitalised within exploration and evaluation assets until the drilling of the well is complete and 
the results have been evaluated these costs include employee remuneration and materials and fuel used rig costs 
and payments made to contractors and asset retirement obligation fees if hydrocarbons are found and subject to 
further appraisal activity eg the drilling of additional wells it is probable that they can be commercially 
developed the costs continue to be carried as an asset while sufficientcontinued 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 when this is no longer the case the  strategic report corporate governance financial report additional disclosures regulatory information
121 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 costs are written off the exploration expenditure expensed to profit or loss during 2014 amounted to nil 2013 us 
3810 thousand 
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 has 
expired the carrying value of the subsoil use rights acquisition costs is written off through profit or loss upon 
recognition of proved reserves and internal approval for development the relevant expenditure is transferred to oil 
and gas properties 
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 its purchase price or construction cost any costs directly attributable 
to bringing the asset into operation and the initial estimate of decommissioning obligation 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 
constructiondevelopment 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 
all capitalised costs of oil and gas properties are amortised using the unitofproduction method based on estimated 
proved developed reserves of the field except the group depreciates its oil pipeline and oil loading terminal on a 
straight line basis over the life of the relevant subsoil use rights in the case of assets that have a useful life shorter 
than the lifetime of the field the straight line method is applied 
oil and gas reserves 
proved oil and gas reserves are estimated quantities of commercially viable hydrocarbons which existing geological 
geophysical and engineering data show to be recoverable in future years from known reservoirs 
the group uses the reserve estimates provided by an independent appraiser on an annual basis to assess the oil and 
gas reserves of its oil and gas fields these reserve quantities are used for calculating the unit of production 
depreciation rate as it reflects the expected pattern of consumption of future economic benefits by the group 
advances for noncurrent assets 
advances paid for capital investmentsacquisition of noncurrent assets shall be qualified as advances for noncurrent 
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 noncurrent assets are recognised by the group as noncurrent assets and are not 
discounted 
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 assets carrying amount or recognized 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 straightline basis over the estimated useful lives of the assets as follows  122 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 years 
  
buildings and constructions 715 
vehicles 8 
machinery and equipment 313 
other 310 
impairment of nonfinancial assets 
the group assesses assets or groups of assets for impairment whenever events or changes in circumstances indicate 
that the carrying value of an asset may not be recoverable individual assets are grouped for impairment assessment 
purposes at the lowest level at which there are identifiable cash inflows that are largely independent of the cash flows 
of other groups of assets if any such indication of impairment exists or when annual impairment testing for an asset 
group is required the group makes an estimate of its recoverable amount an asset group’s recoverable amount is 
the higher of its fair value less costs of disposal and its value in use where the carrying amount of an asset group 
exceeds its recoverable amount the asset group is considered impaired and is written down to its recoverable 
amount in assessing value in use the estimated future cash flows are adjusted for the risks specific to the asset group 
and are discounted to their present value using a pretax discount rate that reflects current market assessments of the 
time value of money 
in determining fair value less costs of disposal recent market transactions are taken into account if no such 
transactions can be identified an appropriate valuation model is used these calculations are corroborated by 
valuation multiples quoted share prices for publicly traded companies or other available fair value indicators 
an assessment is made at each reporting date as to whether there is any indication that previously recognized 
impairment losses may no longer exist or may have decreased if such indication exists the recoverable amount is 
estimated a previously recognized impairment loss is reversed only if there has been a change in the estimates used 
to determine the asset’s recoverable amount since the last impairment loss was recognized if that is the case the 
carrying amount of the asset is increased to its recoverable amount that increased amount cannot exceed the 
carrying amount that would have been determined net of depreciation had no impairment loss been recognized for 
the asset in prior years such reversal is recognized in the profit or loss  
after such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying 
amount less any residual value on a systematic basis over its remaining useful life 
impairment losses of continuing operations including impairment of inventories are recognised in profit or loss in 
those expense categories consistent with the function of the impaired asset 
goodwill 
goodwill is tested for impairment annually as at 31 december and when circumstances indicate that the carrying 
value may be impaired impairment is determined for goodwill by assessing the recoverable amount of each cgu or 
group of cgus to which the goodwill relates when the recoverable amount of the cgu is less than its carrying 
amount an impairment loss is recognised impairment losses relating to goodwill cannot be reversed in future 
periods 
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 amortized 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  strategic report corporate governance financial report additional disclosures regulatory information
123 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 borrowings that are outstanding during the period all other borrowing costs are recognised in the consolidated 
statement of comprehensive income in the period in which they are incurred 
inventories 
inventories are stated at the lower of cost or net realizable value “nrv” cost of oil gas condensate and liquefied 
petroleum gas “lpg” is determined on the weightedaverage method based on the production cost including the 
relevant expenses on depreciation depletion and impairment and overhead costs based on production volume net 
realizable value is the estimated selling price in the ordinary course of business less selling expenses 
provisions 
provisions are recognized 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 
abandonment and site restoration decommissioning 
provision for decommissioning is recognized in full on a discounted cash flow basis when the group has an 
obligation to dismantle and remove a facility or an item of plant and to restore the site on which it is located and 
when a reasonable estimate of that provision can be made the amount of the obligation is the present value of the 
estimated expenditures expected to be required to settle the obligation adjusted for expected inflation and discounted 
at applicable rate the unwinding of the discount related to the obligation is recorded in finance costs a 
corresponding amount equivalent to the provision is also recognized 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 unitof
production basis  
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 
a 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 recognized immediately in the profit or loss and 
b 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 
financial assets 
initial recognition and measurement 
financial assets within the scope of ias 39 are classified as financial assets at fair value through profit or loss loans 
and receivables heldtomaturity investments availableforsale financial assets or as derivatives designated as 
hedging instruments in an effective hedge as appropriate the group determines the classification of its financial 
assets at initial recognition 
all financial assets are recognised initially at fair value plus in the case of investments not at fair value through 
profit or loss directly attributable transaction costs 
purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or 
convention in the marketplace regular way trades are recognised on the trade date ie the date that the group 
commits to purchase or sell the asset  
the group’s financial assets include cash longterm and shortterm deposits trade and other receivables  124 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 loans and receivables 
loans and receivables are nonderivative financial assets with fixed or determinable payments that are not quoted in 
an active market after initial measurement such financial assets are subsequently measured at amortised cost using 
the effective interest rate method “eir” less impairment amortised cost is calculated by taking into account any 
discount or premium on acquisition and fee or costs that are an integral part of the eir 
the eir amortisation is included in finance income in the statement of comprehensive income the losses arising 
from impairment are recognised in the statement of comprehensive income in finance costs 
accounts receivable 
accounts receivables are recognized and carried at original invoice amount less an allowance for any uncollectible 
amounts an estimate for uncollectible amounts is made when collection of the full amount is no longer probable 
these estimates are reviewed periodically and as adjustments become necessary they are reported as expense 
credit in the period in which they become known 
derecognition 
a financial asset or where applicable a part of a financial asset or part of a group of similar financial assets is 
derecognized when 
 the rights to receive cash flows from the asset have expired 
 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 ‘passthrough’ 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 passthrough 
arrangement and has neither transferred nor retained substantially all the risks and rewards of the asset nor 
transferred control of the asset the asset is recognized to the extent of the group’s continuing involvement in the 
asset 
in that case the group also recognizes 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 
continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the 
original carrying amount of the asset and the maximum amount of consideration that the group could be required to 
repay 
impairment of financial assets 
the group assesses at each reporting date whether there is any objective evidence that a financial asset or a group of 
financial assets is impaired a financial asset or a group of financial assets is deemed to be impaired if and only if 
there is objective evidence of impairment as a result of one or more events that has occurred after the initial 
recognition of the asset an incurred ‘loss event’ and that loss event has an impact on the estimated future cash flows 
of the financial asset or the group of financial assets that can be reliably estimated  
evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant 
financial difficulty default or delinquency in interest or principal payments the probability that they will enter 
bankruptcy or other financial reorganization and where observable data indicate that there is a measurable decrease in 
the estimated future cash flows such as changes in arrears or economic conditions that correlate with defaults  strategic report corporate governance financial report additional disclosures regulatory information
125 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 financial assets carried at amortized cost 
for financial assets carried at amortized cost the group first assesses individually whether objective evidence of 
impairment exists individually for financial assets that are individually significant or collectively for financial assets 
that are not individually significant if the group determines that no objective evidence of impairment exists for an 
individually assessed financial asset whether significant or not it includes the asset in a group of financial assets 
with similar credit risk characteristics and collectively assesses them for impairment assets that are individually 
assessed for impairment and for which an impairment loss is or continues to be recognized are not included in a 
collective assessment of impairment 
if there is objective evidence that an impairment loss has incurred the amount of the loss is measured as the 
difference between the asset’s carrying amount and the present value of estimated future cash flows excluding future 
expected credit losses that have not yet been incurred the present value of the estimated future cash flows is 
discounted at the financial assets original effective interest rate if a loan has a variable interest rate the discount rate 
for measuring any impairment loss is the current effective interest rate 
the carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is 
recognized in the profit or loss interest income continues to be accrued on the reduced carrying amount and is 
accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment 
loss the interest income is recorded as part of finance income in the profit or loss loans together with the 
associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been 
realized or has been transferred to the group if in a subsequent year the amount of the estimated impairment loss 
increases or decreases because of an event occurring after the impairment was recognized the previously recognized 
impairment loss is increased or reduced by adjusting the allowance account if a future writeoff is later recovered 
the recovery is credited to finance costs in the profit or loss 
financial liabilities 
initial recognition and measurement 
financial liabilities within the scope of ias 39 are classified as financial liabilities at fair value through profit or loss 
loans and borrowings or as derivatives designated as hedging instruments in an effective hedge as appropriate the 
group determines the classification of its financial liabilities at initial recognition all financial liabilities are 
recognized initially at fair value and in the case of loans and borrowings net of directly attributable transaction costs 
the group’s financial liabilities include trade and other payables and borrowings 
subsequent measurement 
after initial recognition interest bearing borrowings are subsequently measured at amortized cost using the eir 
gains and losses are recognized in the profit or loss when the liabilities are derecognized as well as through the eir 
amortization process 
amortized cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are 
an integral part of the eir the eir amortization is included in finance cost in the profit or loss 
derecognition 
a financial liability is derecognized 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 a 
derecognition of the original liability and the recognition of a new liability and the difference in the respective 
carrying amounts is recognized in the profit or loss  126 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 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 recognized amounts and there is an intention to 
settle on a net basis or to realize the assets and settle the liabilities simultaneously 
fair value of financial instruments 
the fair value of financial instruments that are traded in active markets at each reporting date is determined by 
reference to quoted market prices or dealer price quotations bid price for long positions and ask price for short 
positions without any deduction for transaction costs 
for financial instruments not traded in an active market the fair value is determined using appropriate valuation 
techniques such techniques may include using recent arm’s length market transactions reference to the current fair 
value of another instrument that is substantially the same discounted cash flow analysis or other valuation models 
an analysis of fair values of financial instruments and further details as to how they are measured are provided in 
note 35 
derivative financial instruments and hedging 
the group uses hedging contracts for oil export sales to cover part of its risks associated with oil price fluctuations 
such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract 
is entered into and are subsequently remeasured at fair value derivatives are carried as assets when the fair value is 
positive and as liabilities when the fair value is negative 
any gains or losses arising from changes in fair value of derivatives during the year that do not qualify for hedge 
accounting are taken directly to profit or loss 
the fair value of financial instruments  is determined by reference to market values for similar instruments  
cash and shortterm deposits 
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 but exclude any restricted cash which is not available for 
use by the group and therefore is not considered highly liquid – for example cash set aside to cover 
decommissioning obligations 
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 
taxation 
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 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  strategic report corporate governance financial report additional disclosures regulatory information
127 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 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 utilized deferred tax assets and liabilities are measured at tax rates that 
are expected to apply to the period when the asset is realized 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 and associates 
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 
revenue recognition  
the group sells crude oil gas condensate and lpg under agreements priced by reference to platt’s andor argus’ 
index quotations and adjusted for freight insurance and quality differentials where applicable the group sells gas 
under agreements at fixed prices 
revenue from the sale of crude oil gas condensate gas and lpg is recognized when delivery has taken place and 
risks and rewards of ownership have passed to the customer 
revenue is recognized when it is probable that the economic benefits associated with the transaction will flow to the 
group and the amount of revenue can be reliably measured 
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 other 
reserves 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 are satisfied with treasury shares 
sharebased payments 
the group measures the cost of cashsettled transactions with employees by reference to the fair value of the equity 
instruments at the date at which they are granted estimating fair value for sharebased 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 sharebased payment transactions are disclosed in note 28 
5 business combinations 
on 19 may 2014 the group agreed to acquire 100 of the share capital of prolag bvba prolag and amersham oil 
llp amersham companies providing management and consulting services to the group from related parties of 
the group in connection with the premium listing on the london stock exchange of the group’s listed entity so as 
to comply with certain exchange requirements that listed companies be managed by persons employed by entities 
within the listed company’s group 
a cash consideration consisting of initial purchase price of us1 and a price adjustment of us212 thousand was 
agreed and paid with respect to the acquisition of prolag historically prolag provided consulting services to the 
group on certain marketing transportation and logistics matters  128 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 it was agreed that amersham be acquired in exchange for a cash consideration consisting of initial purchase price of 
us1915 thousand subject to a price adjustment based on accounts of amersham at 31 december 2014 the 
amount of the price adjustment with respect to the acquisition of amersham has not yet been agreed or paid as at the 
date of the authorisation of the financial statements for issue but it is estimated at us487 thousand respective 
liability for this amount has been recognised within other current liabilities note 21 as at 31 december 2014 
certain managers of the group historically provided services to the group pursuant to a service agreement between 
amersham and the group 
the goodwill arising on acquisition represents the savings of the group on management fees and is not expected to 
be deductible for tax purposes  
there were no significant revenues or profitslosses of the acquired subsidiaries since the respective acquisition dates 
included in the consolidated statements of comprehensive income for the years ended 31 december 2014 and 2013 
the provisional fair values of the identifiable assets and liabilities of amersham and prolag as at the date of 
acquisition were 
in thousands of us dollars  
prolag 
bvba 
amersham 
oil total 
assets    
property plant and equipment 15 2 17 
advances for noncurrent assets 287 – 287 
prepayments and other current assets 721 15 736 
cash and cash equivalents 219 365 584 
 1242 382 1624 
liabilities    
trade payables 496 7 503 
other current liabilities 427 12 439 
 923 19 942 
total identifiable net assets at fair value 319 363 682 
goodwill arising on acquisition  2039 2039 
gain arising on acquisition 106  106 
total purchase consideration 212 2402 2615 
the purchase consideration comprised of 
in thousands of us dollars   
  
consideration satisfied by cash 212 
working capital adjustment 2402 
total purchase consideration 2615 
  
consideration satisfied by cash 212 
cash and cash equivalents acquired 584 
  
purchase of subsidiaries per the cash flow statement 372 
on 30 december 2013 the group has acquired 100 of the share capital of probel capital management nv 
“probel” a company providing management and consulting services to the group from group’s related parties in 
exchange for a cash consideration consisting of initial purchase price of us28836 thousand and a price adjustment 
of us4598 thousand estimated as at the acquisition date based on accounts of probel at 30 december 2013 the 
actual amount of price adjustment agreed was us3631 thousand and paid on 18 june 2014  strategic report corporate governance financial report additional disclosures regulatory information
129 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 historically certain senior managers of the group have provided their services to the group pursuant to a service 
agreement between probel and the group the probel acquisition was agreed upon in connection with the premium 
listing on the london stock exchange of the group’s listed entity so as to comply with certain exchange 
requirements that listed companies be managed by persons employed by entities within the listed company’s group 
the goodwill arising on acquisition represents the savings of the group on management fees 
the provisional fair values of the identifiable assets and liabilities of probel as at the date of acquisition were 
in thousands of us dollars  
probel capital 
management nv 
assets  
property plant and equipment 32 
prepayments and other current assets 2554 
cash and cash equivalents 1953 
 4539 
liabilities  
trade payables 1021 
other current liabilities 470 
 1491 
total identifiable net assets at fair value 3048 
goodwill arising on acquisition 30386 
total purchase consideration 33434 
the purchase consideration comprised of 
in thousands of us dollars   
  
consideration satisfied by cash 28836 
working capital adjustment 4598 
total purchase consideration 33434 
  
consideration satisfied by cash 28836 
cash and cash equivalents acquired 1953 
  
purchase of subsidiaries per the cash flow statement 26883 
6 goodwill 
as at 31 december 2014 and 2013 goodwill comprised the following due to business combinations 
 
in thousands of us dollars  31 december 2014  31 december 2013  
   
balance at the beginning of the period 30386 – 
goodwill addition 2039 30386 
balance at the end of the period 32425 30386 
 
  130 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 impairment testing 
the goodwill arising from the purchase of probel and amersham relates to a single cashgenerating unit 
respectively goodwill is tested for impairment by comparing the recoverable amount against the carrying value of 
the underlying cash generating unit 
the management has determined a single cashgenerating unit within the group’s noncurrent assets consisting of all 
group’s assets related to its chinarevskoye and exploration fields and gas treatment facility impairment testing is 
performed by comparing the recoverable amount against the carrying value of the cash generating unit the 
recoverable amount is determined by calculation of the valueinuse based on discounted cash flow model as no 
recent third party transactions exist on which a reliable marketbased fair value can be established the valueinuse 
calculation model which formally approved by the management takes into consideration cashflows which are 
expected to arise until 2032 ie during the license term of the chinarevskoye field the period exceeding five years 
is believed to be appropriate based on the proved and probable reserves audited by independent engineers and 
respective past history of the group’s ability to transfer probable reserves into proved 
the key assumptions used in the group’s discounted cash flow models reflect past experience and take account of 
external factors these assumptions are 
 oil prices for 20152022 are based on the forward curve of the ice brent oil futures and for 20232032 
are kept constant at the level applied for 2022 
 proved and probable hydrocarbon reserves confirmed by independent reserve engineers 
 production profiles based on group’s internal estimates confirmed by independent reserve engineers; 
 all cashflows are projected on the basis of stable prices ie inflationgrowth rates are ignored 
 cost profiles for the development of the fields and subsequent operating costs consistent with reserves 
estimates and production profiles and 
 pretax discount rate of 14 
none of the reasonably possible changes in key assumptions causes the cash generating unit’s carrying amount to 
exceed its recoverable amount 
7 exploration and evaluation assets 
in thousands of us dollars  31 december 2014  31 december 2013  
subsoil use rights 15835 15835 
expenditures on geological and geophysical studies 8545 4599 
 24380 20434 
during the year ended 31 december 2014 the group had additions to exploration and evaluation assets of us3946 
thousand which includes capitalised expenditures on geological and geophysical studies 2013 us20434 thousand 
mainly represented by capitalised consideration under the acquisition agreements for the darjinskoye 
rostoshinskoye and yuzhnogremyachinskoye oilfields interest was not capitalised in exploration and evaluation 
assets during the year ended 31 december 2014 the group repaid capitalised contingent consideration under the 
acquisition agreements for the darjinskoye and yuzhnogremyachinskoye oil and gas fields in the amount of us 
5300 thousand  strategic report corporate governance financial report additional disclosures regulatory information
131 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 8 property plant and equipment 
as at 31 december 2014 and 2013 property plant and equipment comprised the following 
 
in thousands of us dollars  31 december 2014  31 december 2013  
oil and gas properties 1401847 1292073 
other property plant and equipment 40310 38830 
 1442157 1330903 
oil and gas properties 
the category “oil and gas properties” represents mainly 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 2014 and 2013 was as 
follows 
in thousands of us dollars  
working 
assets 
construction 
in progress total 
    
balance at 1 january 2013 net of accumulated depreciation and 
depletion 1002602 189446 1192048 
additions 5108 210076 215184 
transfers 197271 197271 – 
depreciation and depletion charge 115159 – 115159 
balance at 31 december 2013 net of accumulated depreciation 
and depletion 1089822 202251 1292073 
additions 9730 205153 214883 
transfers 38640 38445 195 
disposals 666 – 666 
disposals depreciation 214 – 214 
depreciation and depletion charge 104852 – 104852 
balance at 31 december 2014 net of accumulated depreciation 
and depletion 1032888 368959 1401847 
    
as at 31 december 2012    
cost 1209373 189446 1398819 
accumulated depreciation 206771 – 206771 
balance net of accumulated depreciation and depletion 1002602 189446 1192048 
    
as at 31 december 2013     
cost 1411752 202251 1614003 
accumulated depreciation 321930 – 321930 
balance net of accumulated depreciation and depletion 1089822 202251 1292073 
    
as at 31 december 2014     
cost 1459457 368959 1828416 
accumulated depreciation 426569 – 426569 
balance net of accumulated depreciation and depletion 1032888 368959 1401847  132 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 the category oil and gas properties represents mainly wells oil and gas treatment facilities oil transportation and 
other related assets the subcategory “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 depletion rate for oil and gas working assets was 1002 and 1214 in 2014 and 2013 respectively  
the group incurred borrowing costs including amortisation of arrangement fees capitalisation rate and capitalised 
borrowing costs were as follows as at 31 december 2014 and 2013 
 
in thousands of us dollars  31 december 2014  31 december 2013  
   
borrowing costs including amortisation of arrangement fee 77959 56023 
capitalisation rate 728 895 
capitalised borrowing costs 17134 14609 
other property plant and equipment 
in thousands of us dollars  buildings 
machinery 
 
equipment vehicles others 
construction 
in progress total 
       
balance at 1 january 2013 net of 
accumulated depreciation 5607 6496 1170 4002 13342 30617 
additions 562 2410 560 1217 8654 13403 
transfers 21799 – – 150 21949 – 
disposals 35 102 50 44 – 231 
disposals depreciation 16 52 49 30 – 147 
depreciation 1653 2378 334 741 – 5106 
balance at 31 december 2013 net 
of accumulated depreciation 26296 6478 1395 4614 47 38830 
additions 585 1501 324 6279 258 8947 
transfers 24 309 412 940 – 195 
disposals 6 24 159 244 – 433 
disposals depreciation 5 16 157 193 – 371 
depreciation 3136 2430 484 1160 – 7210 
balance at 31 december 2014 net 
of accumulated depreciation 23768 5850 1645 8742 305 40310 
       
as at 31 december 2012       
cost 8561 10977 3003 5853 13342 41736 
accumulated depreciation 2954 4481 1833 1851 – 11119 
balance net of accumulated 
depreciation 5607 6496 1170 4002 13342 30617 
       
as at 31 december 2013        
cost 30887 13285 3513 7166 47 54898 
accumulated depreciation 4591 6807 2118 2552 – 16068 
balance net of accumulated 
depreciation 26296 6478 1395 4614 47 38830 
        strategic report corporate governance financial report additional disclosures regulatory information
133 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 as at 31 december 2014        
cost 31497 15068 4167 12270 305 63307 
accumulated depreciation 7729 9218 2522 3528 – 22997 
balance net of accumulated 
depreciation 23768 5850 1645 8742 305 40310 
9 advances for noncurrent assets 
as at 31 december 2014 and 2013 advances for noncurrent assets comprised the following 
 
in thousands of us dollars  31 december 2014  31 december 2013  
advances for pipes and construction materials  67465 6241 
advances for construction services  66884 3796 
advances for purchase of software licenses 6 – 
 134355 10037 
during the year ended 31 december 2014 the group made significant advances for construction services and related 
materials for the construction of the third unit of the group’s gas treatment facility 
10 inventories 
as at 31 december 2014 and 2013 inventories comprised the following 
 
in thousands of us dollars  31 december 2014  31 december 2013  
materials and supplies 20472 16739 
gas condensate 3383 2986 
crude oil 1262 1754 
lpg 326 606 
 25443 22085 
as at 31 december 2014 and 2013 inventories are carried at cost 
11 trade receivables 
as at 31 december 2014 and 2013 trade receivables were not interest bearing and were mainly denominated in us 
dollars their average collection period is 30 days  
as at 31 december 2014 and 2013 the ageing analysis of trade receivables is as follows 
   past due but not impaired 
in thousands of us 
dollars  total 
neither past 
due nor 
impaired 30 days 6090 days 90120 days 120 days 
       
31 december 2014  30110 30110 – – – – 
31 december 2013  66565 66561 – – – 4  134 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 12 prepayments and other current assets 
as at 31 december 2014 and 2013 prepayments and other current assets comprised the following 
 
in thousands of us dollars  31 december 2014  31 december 2013  
vat receivable 28502 17192 
advances paid 9184 7817 
other 1956 6183 
 39642 31192 
advances paid consist primarily of prepayments made to service providers 
13 current and noncurrent investments 
current investments as at 31 december 2014 were represented by an interest bearing deposit placed on 30 september 
2014 for a sixmonth period with an interest rate of 024 per annum as at 31 december 2014 no noncurrent 
investments were placed by the group 
current investments as at 31 december 2013 were represented by an interest bearing shortterm deposit placed on 30 
september 2013 for a sixmonth period with interest rate of 031 per annum noncurrent investments as at 31 
december 2013 were represented by an interest bearing deposit placed on 30 september 2013 for a period of more 
than one year and an interest bearing deposit placed on 4 march 2013 for a twoyear period which was terminated on 
23 april 2014  
14 cash and cash equivalents 
in thousands of us dollars  31 december 2014  31 december 2013  
current accounts in us dollars 356316 150931 
current accounts in tenge 8709 5485 
current accounts in other currencies 10413 3492 
petty cash 5 6 
bank deposits with maturity less than three months – 25000 
 375443 184914 
the group has restricted cash accounts as liquidation fund deposit in the amount of us5023 thousand with 
kazkommertsbank jsc and sberbank in kazakhstan 31 december 2013 us4217 thousand which is kept as 
required by the subsoil use rights for abandonment and site restoration liability of the group 
bank deposits with maturity of less than three months as at 31 december 2013 represent an interest bearing short
term deposit placed on 30 december 2013  
15 share capital and reserves 
partnership capital of nostrum oil  gas lp before the reorganisation 
other reserves include foreign currency translation reserve accumulated before 2009 when the functional currency 
of the group was kazakhstani tenge  strategic report corporate governance financial report additional disclosures regulatory information
135 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 prior to the reorganization the partnership capital of the group comprised of the partnership capital of nostrum oil  
gas lp 
distributions 
during the year ended 31 december 2014 nostrum oil  gas lp made a distribution of us035 per common unit 
2013 us034 per common unit to the holders of common units representing limited partnership interests which 
amounted to a total of us64615 thousand and was paid in full on 6 june 2014 2013 a distribution of us63179 
thousand was announced which was paid in full on 19 july 2013 
reorganisation 
on 17 june 2014 the limited partners of nostrum oil  gas lp duly passed all proposed resolutions at the special 
general meeting of limited partners 
the resolutions passed by the limited partners included a resolution to approve the new corporate structure the 
“scheme” whereby nostrum oil  gas plc was to become the new holding company for the business of nostrum 
oil  gas lp  
furthermore the limited partners approved special resolutions to approve the amendment to the limited partnership 
agreement to permit implementation of the scheme and the dissolution of nostrum oil  gas lp which was 
completed on 27 august 2014 
on 18 june 2014 following the decision of the board of directors nostrum oil  gas lp commenced the group’s 
reorganization this was implemented by means of an exchange offer made by the company to the gdr holders of 
nostrum oil  gas lp which were entitled to receive 1 share of nostrum oil  gas plc for each gdr of nostrum 
oil  gas lp 
the gdr facility was cancelled on 22 september 2014 
the difference between the partnership capital treasury capital and additional paidin capital of nostrum oil  gas 
lp and the share capital of nostrum oil  gas plc as at the date of the transaction amounting to us255459 has 
been included in the other reserves of the group  
on 17 september 2014 us102797484 were transferred from the share premium account to distributable reserves 
based on a special resolution passed at a general meeting of the parent which was confirmed by an order of the 
high court of justice 
the following table represents the movement of gdrsshares 
number of gdrsshares in circulation 
treasury 
capital total 
    
as at 1 january 2013  186051235 2131723 188182958 
buyback of gdrs 1808726 1808726 – 
share options exercised 285375 285375 – 
as at 31 december 2013  184527884 3655074 188182958 
share options exercised 100935 100935 – 
replacement of gdrs 184628819 3554139 188182958 
shares issued 184628819 3554139 188182958 
share options exercised 200000 200000 – 
as at 31 december 2014 184828819 3354139 188182958 
please refer to note 27 for information on the costs related to the reorganisation 
 
  136 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 share capital of nostrum oil  gas plc 
as at 31 december 2014 the ownership interests in the parent consist of issued and fully paid ordinary shares which 
are listed on the london stock exchange as at 31 december 2013 the parent had subscriber shares and redeemable 
preference shares all of which were cancelled on 7 august 2014 
after the reorganisation the share capital of the group comprised of the share capital of nostrum oil  gas plc 
 31 december 2014  
number of shares 
subscriber and 
redeemable 
preference shares ordinary shares 
   
balance at the beginning of the period 410002  
share capital – 188182958 
cancellation of shares 410002 – 
balance at the end of the period – 188182958 
the subscriber and redeemable preference shares had a nominal value of gb£ 1 and the ordinary shares have a 
nominal value of gb£ 001 
kazakhstan stock exchange disclosure requirement 
the kazakhstan stock exchange has enacted on 11 october 2010 as amended on 18 april 2014 a requirement for 
disclosure of “the book value per share” total assets less intangible assets total liabilities and preferred stock divided 
by the number of outstanding shares as at the reporting date as at 31 december 2014 the book value per share 
amounted to us470 31 december 2013 us426 
16 earnings per share 
basic eps amounts are calculated by dividing the profit for the period by the weighted average number of common 
units shares outstanding during the period 
the basic and diluted eps are the same as there are no instruments that have a dilutive effect on earnings  
there have been no transactions involving ordinary shares or potential ordinary shares between the reporting date 
and the date of authorization of these financial statements 
 2014 2013 
profit for the year attributable to the holders of common 
unitsshares in thousands of us dollars 146425 219519 
weighted average number of common unitsshares 184678352 185289560 
basic and diluted earnings per common unitshare in us 
dollars 079 118  strategic report corporate governance financial report additional disclosures regulatory information
137 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 17 borrowings 
borrowings comprise the following as at 31 december 2014 and 2013 
in thousands of us dollars  31 december 2014  31 december 2013  
notes issued in 2012 and maturing in 2019 540793 536301 
notes issued in 2014 and maturing in 2019 404321 – 
notes issued in 2010 and maturing in 2015 – 92122 
 945114 628423 
less amounts due within 12 months 15024 7263 
amounts due after 12 months 930090 621160 
 2010 notes 
on 19 october 2010 zhaikmunai finance bv the “2010 initial issuer” issued us 450000 thousand notes the 
“2010 notes” 
on 28 february 2011 zhaikmunai llp the “2010 issuer” replaced the 2010 initial issuer of the 2010 notes 
whereupon it assumed all of the obligations of the 2010 initial issuer under the 2010 notes 
the 2010 notes bore interest at the rate of 1050 per year interest on the 2010 notes was payable on 19 april and 
19 october of each year beginning on 19 april 2011 prior to 19 october 2013 the 2010 issuer could at its option 
on any one or more occasions redeem up to 35 of the aggregate principal amount of the 2010 notes with the net 
cash proceeds of one or more equity offerings at a redemption price of 11050 of the principal amount thereof plus 
accrued and unpaid interest if any to the redemption date subject to the right of holders of record on the relevant 
record date to receive interest due on the relevant interest payment date provided that 1 at least 65 of the 
original principal amount of the 2010 notes including additional notes as defined in the indenture relating to the 
2010 notes remains outstanding after each such redemption and 2 the redemption occurs within 90 days after the 
closing of the related equity offering 
in addition the 2010 notes could have been redeemed in whole or in part at any time prior to 19 october 2013 at 
the option of the 2010 issuer upon not less than 30 nor more than 60 days prior notice mailed by firstclass mail to 
each holder of 2010 notes at its registered address at a redemption price equal to 100 of the principal amount of 
the 2010 notes redeemed plus the applicable premium as defined below as of and accrued and unpaid interest to 
the applicable redemption date subject to the right of holders of record on the relevant record date to receive interest 
due on the relevant interest payment date applicable premium means with respect to any 2010 note on any 
applicable redemption date the greater of 1 10 of the principal amount of such 2010 note and 2 the excess if 
any of a the present value at such redemption date of i the redemption price of such 2010 note at 19 october 
2013 plus ii all required interest payments excluding accrued and unpaid interest to such redemption date due on 
such 2010 note through 19 october 2013 computed using a discount rate equal to the united states treasury rate as 
of such redemption date plus 50 basis points over b the principal amount of such 2010 note 
the 2010 notes were jointly and severally guaranteed the “2010 guarantees” on a senior basis by nostrum oil  
gas lp and all of its subsidiaries other than the 2010 issuer the “2010 guarantors” the 2010 notes were the 2010 
issuers and the 2010 guarantors senior obligations and rank equally with all of the 2010 issuers and the 2010 
guarantors other senior indebtedness the 2010 notes and the 2010 guarantees had the benefit of first priority 
pledges over the shares of zhaikmunai finance bv and zhaikmunai netherlands bv 
on 19 october 2012 zhaikmunai international bv commenced a cash tender offer the “tender offer” to 
purchase any and all of the 2010 notes us 347604 thousand aggregate principal amount of the 2010 notes had 
been tendered into the tender offer representing approximately 77 of the outstanding 2010 notes by the time the 
tender offer for 2010 notes expired on 19 november 2012 the holders of us 200732 thousand 2010 notes that 
accepted the tender offer have subscribed to the 2012 notes of the same amount   138 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 on 14 march 2014 the group submitted a notice of early redemption on 14 april 2014 of the principal amount of the 
2010 notes plus accrued interest and premium as at that date the outstanding principal amount of us 92505 
thousand was reclassified to the current portion of longterm borrowings and the related unamortised transaction 
costs were expensed to profit and loss the group has also accrued related early redemption premium in the amount 
of us 4857 thousand on 14 april 2014 zhaikmunai llp repaid the outstanding 2010 notes including interest and 
premium 
2012 notes 
on 13 november 2012 zhaikmunai international bv the “2012 initial issuer” issued us 560000 thousand notes 
the “2012 notes” 
on 24 april 2013 zhaikmunai llp the “2012 issuer” replaced the 2012 initial issuer of the 2012 notes whereupon 
it assumed all of the obligations of the 2012 initial issuer under the 2012 notes 
the 2012 notes bear interest at the rate of 7125 per year interest on the 2012 notes is payable on 14 may and 13 
november of each year beginning on 14 may 2013 prior to 13 november 2016 the 2012 issuer may at its option 
on any one or more occasions redeem up to 35 of the aggregate principal amount of the 2012 notes with the net 
cash proceeds of one or more equity offerings at a redemption price of 107125 of the principal amount thereof 
plus accrued and unpaid interest if any to the redemption date subject to the right of holders of record on the 
relevant record date to receive interest due on the relevant interest payment date provided that 1 at least 65 of 
the original principal amount of the 2012 notes including additional notes as defined in the indenture relating to 
the 2012 notes remains outstanding after each such redemption and 2 the redemption occurs within 90 days after 
the closing of the related equity offering 
in addition the 2012 notes may be redeemed in whole or in part at any time prior to 13 november 2016 at the 
option of the 2012 issuer upon not less than 30 nor more than 60 days prior notice mailed by firstclass mail to each 
holder of 2012 notes at its registered address at a redemption price equal to 100 of the principal amount of the 
2012 notes redeemed plus the applicable premium as defined below as of and accrued and unpaid interest to the 
applicable redemption date subject to the right of holders of record on the relevant record date to receive interest due 
on the relevant interest payment date applicable premium means with respect to any 2012 note on any applicable 
redemption date the greater of 1 10 of the principal amount of such 2012 note and 2 the excess if any of a 
the present value at such redemption date of i the redemption price of such 2012 note at 13 november 2016 plus 
ii all required interest payments excluding accrued and unpaid interest to such redemption date due on such 2012 
note through 13 november 2016 computed using a discount rate equal to the united states treasury rate as of such 
redemption date plus 50 basis points over b the principal amount of such 2012 note 
the 2012 notes are jointly and severally guaranteed the “2012 guarantees” on a senior basis by nostrum oil  
gas plc and all of its subsidiaries other than the 2012 issuer the “2012 guarantors” the 2012 notes are the 2012 
issuer’s and the 2012 guarantors’ senior obligations and rank equally with all of the 2012 issuer’s and the 2012 
guarantors’ other senior indebtedness the 2012 notes and the 2012 guarantees do not have the benefit of first 
priority pledges over the shares of zhaikmunai finance bv and zhaikmunai netherlands bv 
2014 notes 
on 14 february 2014 nostrum oil  gas finance bv the “2014 initial issuer” issued us 400000 thousand 
notes the “2014 notes”  
on 6 may 2014 zhaikmunai llp the “2014 issuer” replaced nostrum oil  gas finance bv as issuer of the 
2014 notes whereupon it assumed all of the obligations of the 2014 initial issuer under the 2014 notes 
the 2014 notes bear interest at the rate of 6375 per annum interest on the 2014 notes is payable on 14 february 
and 14 august of each year beginning on 14 august 2014 prior to 14 february 2017 the 2014 issuer may at its 
option on any one or more occasions redeem up to 35 of the aggregate principal amount of the 2014 notes with 
the net cash proceeds of one or more equity offerings at a redemption price of 106375 of the principal amount  strategic report corporate governance financial report additional disclosures regulatory information
139 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 thereof plus accrued and unpaid interest if any to the redemption date subject to the right of holders of record on 
the relevant record date to receive interest due on the relevant interest payment date provided that 1 at least 65 
of the original principal amount of the 2014 notes including additional notes as defined in the indenture relating to 
the 2014 notes remains outstanding after each such redemption and 2 the redemption occurs within 90 days after 
the closing of the related equity offering 
in addition the 2014 notes may be redeemed in whole or in part at any time prior to 14 february 2017 at the option 
of the 2014 issuer upon not less than 30 nor more than 60 days’ prior notice mailed by firstclass mail to each holder 
of 2014 notes at its registered address at a redemption price equal to 100 of the principal amount of the 2014 
notes redeemed plus the applicable premium as defined below as of and accrued and unpaid interest to the 
applicable redemption date subject to the right of holders of record on the relevant record date to receive interest due 
on the relevant interest payment date applicable premium means with respect to any 2014 notes on any applicable 
redemption date the greater of 1 10 of the principal amount of such 2014 notes and 2 the excess if any of 
a the present value at such redemption date of i the redemption price of such 2014 notes at 14 february 2017 plus 
ii all required interest payments excluding accrued and unpaid interest to such redemption date due on such 2014 
notes through 14 february 2017 computed using a discount rate equal to the united states treasury rate as of such 
redemption date plus 50 basis points over b the principal amount of such 2014 notes 
the 2014 notes are jointly and severally guaranteed the “2014 guarantees” on a senior basis by nostrum oil  
gas plc and all of its subsidiaries other than the 2014 issuer the “2014 guarantors” the 2014 notes are the 2014 
issuer’s and the 2014 guarantors’ senior obligations and rank equally with all of the 2014 issuer’s and the 2014 
guarantors’ other senior indebtedness claims of secured creditors of the 2014 issuer or the 2014 guarantors will 
have priority with respect to their security over the claims of creditors who do not have the benefit of such security 
such as the holders of the 2014 notes 
costs directly attributable to the 2014 notes arrangement amounted to us6525 thousand 
covenants contained in the 2010 notes the 2012 notes and the 2014 notes 
the indentures governing the 2010 notes the 2012 notes and the 2014 notes contain a number of covenants that 
among other things restrict subject to certain exceptions 
·      incur or guarantee additional indebtedness and issue certain preferred stock 
·      create or incur certain liens 
·      make certain payments including dividends or other distributions 
·      prepay or redeem subordinated debt or equity 
·      make certain investments 
·      create encumbrances or restrictions on the payment of dividends or other distributions loans or advances to and 
on the transfer of assets to the parent or any of its restricted subsidiaries 
·      sell lease or transfer certain assets including shares of restricted subsidiaries 
·      engage in certain transactions with affiliates 
·      enter into unrelated businesses and 
·      consolidate or merge with other entities 
each of these covenants is subject to certain exceptions and qualifications 
in addition the indentures impose certain requirements as to future subsidiary guarantors and certain customary 
information covenants and events of default  140 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 18 abandonment and site restoration provision 
the summary of changes in abandonment and site restoration provision during years ended 31 december 2014 and 
2013 is as follows 
in thousands of us dollars  2014 2013 
abandonment and site restoration provision as at 1 january 13874 11064 
unwinding of discount 197 1034 
additional provision  2500 2500 
change in estimates  4306 724 
abandonment and site restoration provision as at 31 december 20877 13874 
the management made its estimate based on the assumption that cash flow will take place at the expected end of the 
subsoil use rights in 2033 there are uncertainties in estimation of future costs as kazakh laws and regulations 
concerning site restoration evolve 
the longterm inflation and discount rates used to determine the abandonment and site restoration provision at 31 
december 2014 were 375 and 488 respectively 31 december 2013 7 and 10 change in the discount rate 
resulted in the increase of the provision by us19068 thousand which was offset by a decrease of the provision by 
us14762 thousand due to change in the inflation rate and other assumptions 
19 due to government of kazakhstan 
the amount due to government of the republic of kazakhstan has been recorded to reflect 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 amount of 
liability due to government as stipulated by the contract is us 25000 thousand 
repayment of this liability commenced in 2008 with the first payment of us 1030 thousand in march 2008 and 
with further payments by equal quarterly instalments of us 258 thousand until may 26 2031 the liability was 
discounted at 13 
the summary of the changes in the amounts due to government of kazakhstan during the years ended 31 december 
2014 and 2013 is as follows 
 
in thousands of us dollars  2014 2013 
due to government of kazakhstan as at 1 january 7052 7153 
unwinding of discount 917 930 
paid during the year 1032 1031 
 6937 7052 
less current portion of due to government of kazakhstan 1031 1031 
due to government of kazakhstan as at 31 december 5906 6021  strategic report corporate governance financial report additional disclosures regulatory information
141 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 20 trade payables 
trade payables comprise the following as at 31 december 2014 and 2013 
 
in thousands of us dollars  31 december 2014  31 december 2013  
tenge denominated trade payables  27030 42950 
us dollar denominated trade payables  17889 12719 
trade payables denominated in other currencies  4700 2849 
 49619 58518 
21 other current liabilities 
other current liabilities comprise the following as at 31 december 2014 and 2013 
 
in thousands of us dollars  31 december 2014  31 december 2013  
   
taxes payable other than corporate income tax 17191 32110 
accruals under the subsoil use agreements 14435 – 
training obligations accrual 9686 8986 
due to employees 4605 3227 
liability accrued with respect to acquisitions 2402 1953 
production bonus 449 – 
pension obligations 314 204 
contingent consideration – 5300 
other current liabilities 1534 2848 
 50616 54628 
accruals under subsoil use agreements mainly include amounts estimated in respect of the contractual obligations for 
exploration and production of hydrocarbons from rostoshinskoye darjinskoye and yuzhnogremyachinskoye 
fields 
22 revenue 
in thousands of us dollars  2014  2013  
   
oil and gas condensate 620164 709107 
gas and lpg 161714 185907 
 781878 895014 
the group’s exports are mainly represented by deliveries to finland and the black sea ports of russia 
during the year ended 31 december 2014 the revenue from sales to three major customers amounted to us321755 
thousand us124823 thousand and us77113 thousand respectively 2013 two major customers us202945 
thousand and us173440 thousand respectively  142 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 23 cost of sales 
in thousands of us dollars  2014  2013  
   
depreciation depletion and amortisation 110460 118957 
repair maintenance and other services 35818 52361 
royalties 24330 39356 
payroll and related taxes 21560 17240 
materials and supplies 10929 12262 
well workover costs 6296 2794 
government profit share  4594 30747 
other transportation services 2929 4306 
environmental levies  1098 1029 
management fees – 3558 
change in stock 376 2490 
other 3531 1122 
 221921 286222 
the change in the structure of cost of sales is driven by the acquisition of probel capital management nv on 30 
december 2013 and agreement on 19 may 2014 to acquire prolag bvba and amersham oil llp which led to the 
elimination of intercompany management fees and recognition of those expenses as payroll and related taxes 
besides that zhaikmunai llp revised the estimates related to the government profit share and royalties in accordance 
with the recent supplement to the chinarevskoye subsoil use rights and change in the coefficient of natural gas 
equivalent note 1 which resulted in the total reversal of the government profit share in the amount of us17846 
thousand and in the total reversal of the royalties in the amount of us5451 thousand related to prior periods 
24 general and administrative expenses 
in thousands of us dollars  2014  2013  
professional services 19776 9072 
payroll and related taxes 15668 7576 
business travel  4786 4089 
training 2535 2736 
sponsorship 1826 2919 
insurance fees  1768 2050 
depreciation and amortization 1409 1413 
communication  1195 1010 
other taxes  1006 4839 
lease payments  895 585 
bank charges  813 1100 
materials and supplies 626 664 
management fees 605 16006 
social program  300 300 
other  1670 1660 
 54878 56019  strategic report corporate governance financial report additional disclosures regulatory information
143 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 the change in the structure of general and administrative expenses is driven by the acquisition of probel capital 
management nv on 30 december 2013 and agreement on 19 may 2014 to acquire prolag bvba and amersham 
oil llp which led to the elimination of intercompany management fees and recognition of those expenses as 
professional services and payroll and related taxes 
25 selling and transportation expenses 
in thousands of us dollars  2014  2013  
loading and storage costs 56351 36991 
transportation costs 54878 72229 
payroll and related taxes 2211 2486 
management fees 183 701 
other 8631 9267 
 122254 121674 
the transportation costs for the year ended 31 december 2013 also included certain loading and storage costs 
provided by the transportation companies which are included in loading and storage costs for the year ended 31 
december 2014 
26 finance costs 
in thousands of us dollars  2014  2013  
   
interest expense on borrowings 60825 41651 
unwinding of discount on amounts due to government 917 930 
unwinding of discount on abandonment and site restoration 
provision 197 1034 
 61939 43615 
27 finance costs – reorganisation 
the “finance costs – reorganisation” are represented by the costs associated with introduction of nostrum oil  gas 
plc as the new holding company of the group and respective reorganisation these costs include us14389 
thousand under the facility agreements with vtb capital plc under which us3000000 thousand were committed 
and us2350405 thousand were lent us7193 thousand related to the new listing and the cancellation of the 
gdr program and us7990 thousand financing costs related to advisory and other services incurred in relation to 
the reorganisation  
28 employees’ remuneration 
the average monthly number of employees including executive directors employed was as follows 
 2014 2013 
   
management and administrative 289 259 
technical and operational 721 702 
 1010 961 
  144 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 their aggregate remuneration comprised 
 
in thousands of us dollars  2014 2013 
   
wages and salaries 36025 24545 
sharebased payments 2475 2346 
social security costs 4333 3906 
 42833 30797 
part of the group’s staff costs shown above is capitalised into the cost of intangible and tangible oil and gas assets 
under the group’s accounting policy for exploration evaluation and oil and gas assets 
the amount ultimately remaining in the income statement was us39440 thousand 2013 us27302 thousand 
key management personnel remuneration 
in thousands of us dollars 2014  2013  
shortterm employee benefits 1506 634 
sharebased payments 725 2202 
 2231 2836 
during the year ended 31 december 2013 certain key management personnel were employed and paid by amersham 
oil llp and probel capital management nv and their remuneration formed part of management fees and 
consulting services rendered to the group during 2014 all key management personnel are employed and paid by the 
group 
directors’ remuneration 
 
in thousands of us dollars  2014 2013 
shortterm employees benefits 3242 2899 
sharebased payments 1750 – 
 4992 2899 
employee share option plan 
the group operates one option plan the phantom option plan that 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 note 2 
employees including senior executives and executive directors of members of the group or their associates receive 
remuneration in the form of equitybased payment transactions whereby employees render services as consideration 
for share appreciation rights which can only be settled in cash “cashsettled transactions” 
the cost of cashsettled equitybased 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 equitybased payment plan is described below 
during 20082014 4297958 equity appreciation rights sars which can only be settled in cash were granted to 
senior employees and executive directors of members of the group or their associates these generally vest over a 
five year period from the date of grant so that one fifth of granted sars vests on each of the five anniversaries from  strategic report corporate governance financial report additional disclosures regulatory information
145 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 the date of grant the contractual life of the sars is ten years the fair value of the sars is measured at the grant 
date using a trinomial lattice valuation option pricing model taking into account the terms and conditions upon which 
the instruments were granted sars are exercisable at any time after vesting till the end of the contractual life and 
give its holder a right to a difference between the market value of the group’s ordinary shares at the date of exercise 
and a stated base value the services received and a liability to pay for those services are recognised over the 
expected vesting period 
until the liability is settled it is remeasured at each reporting date with changes in fair value recognised in profit or 
loss as part of the employee benefit expenses arising from cashsettled sharebased payment transactions  
the carrying value of the liability relating to 2611413 of sars at 31 december 2014 is us 6449 thousand  
31 december 2013 2912348 sars with carrying value of us 12016 thousand during the year ended 31 
december 2014 302000 sars were fully vested 2013728487 
the following table illustrates the number “no” and exercise prices “ep” of and movements in sars during the 
year  
 2014  2013  
 no epus no epus 
total outstanding at the beginning of the year with ep of us 4 1646348 4 1931723 4 
total outstanding at the beginning of the year with ep of us 10 1266000 10 200000 10 
total outstanding at the beginning of the year 2912348  2131723  
share option granted – 10 1115000 10 
share option exercised 294935 4 285375 4 
share option exercised 6000 10 – – 
share options lapsed – 10 49000 10 
total outstanding at the end of the year 2611413  2912348  
total exercisable at the end of the year 1815413  1808348  
there were no sars granted during the year ended 31 december 2014 the weighted average fair value of sars 
granted during the year ended 31 december 2013 amounted to us 622 per sar the weighted average price at the 
date of exercise for sars exercised during the year ended 31 december 2014 amounted to us 822 per sar 2013 
us 822 per sar the hullwhite trinomial lattice valuation model was used to value the share options the 
following table lists the inputs to the model used for the plan for the years ended 31 december 2014 and 2013 
 
 2014 2013 
   
gdr 2013 or ordinary share 2014 price at the reporting date 
us 66 130 
distribution yield  30 30 
expected volatility  850 850 
riskfree interest rate  10 20 
expected life years 100 100 
option turnover  100 100 
price trigger 20 20 
 the expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that 
may occur the expected volatility reflects the assumption that the historical volatility is indicative of future trends 
which may also not necessarily be the actual outcome option turnover rate represents the rate of employees 
expected to leave the company during the vesting period which is based on historical data and is may not 
necessarily be the actual outcome the model considers that when share price reaches the level of exercise price 
multiplied by the price trigger the employees are expected to exercise their options  146 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 29 derivative financial instruments 
on 3 march 2014 in accordance with its hedging policy the group entered at nil upfront cost into a longterm 
hedging contract covering oil sales of 7500 bblsday or a total of 5482500 bbls running through to 29 february 
2016 the counterparty to the hedging agreement is citibank based on the hedging contract the group bought a put 
at us85bbl which protects it against any fall in the price of oil below us85bbl ie citibank will compensate the 
difference in price below us85bbl as part of this contract the group also sold a call at us1115bbl and bought a 
call at us1175bbl under which zhaikmunai llp is obliged to compensate the difference in price above 
us1115bbl with an upper limit of us1175bbl ie up to us6bbl if the spot price goes above us1175bbl 
then zhaikmunai llp will be obliged to pay us6bbl to citibank 
during the years ended 31 december 2014 and 2013 the movement in the fair value of derivative financial 
instruments was presented as follows 
in thousands of us dollars  2014  2013  
   
derivative financial instruments at fair value at 1 january – – 
gain on derivative financial instruments 60301 – 
derivative financial instruments at fair value at 31 december 60301 – 
the group classifies the asset constituted by the hedging contract as noncurrent since no settlement is expected to 
occur under or in respect of the hedging contract until 29 february 2016 
gains and losses on the derivative financial instruments which do not qualify for hedge accounting are taken 
directly to profit or loss 
30 other expenses 
in thousands of us dollars  2014  2013  
   
export customs duty 19733 12268 
accruals under subsoil use agreements 16083 – 
compensation 10116 6387 
other 3912 6938 
 49844 25593 
export customs duty is comprised of customs duties for export of crude oil and customs fees for services such as 
processing of declarations temporary warehousing etc based on their interpretation of cis freetrade legislation the 
kazakhstan customs authorities imposed customs duties on oil exports from kazakhstan to ukraine starting from 
december 2012 
accruals under subsoil use agreements mainly include amounts estimated in respect of the contractual obligations for 
exploration and production of hydrocarbons from rostoshinskoye darjinskoye and yuzhnogremyachinskoye 
fields  strategic report corporate governance financial report additional disclosures regulatory information
147 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 31 income tax 
the income tax expense comprised the following 
 
in thousands of us dollars  2014  2013  
   
corporate income tax 117827 138883 
adjustment in respect of the current income tax for the prior periods 6785 – 
deferred income tax expense benefit 54233 3613 
total income tax expense 165275 142496 
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 
 
in thousands of us dollars  2014  2013  
   
profit before income tax 311700 362015 
tax rate applicable to the suboil use rights 30 30 
expected tax provision  93510 108605 
   
effect of exchange rate on the tax base 34533 2836 
adjustments in respect of current income tax of previous years 6785 – 
effect of income taxed at different rate
1
 3790 31 
   
nondeductible interest expense on borrowings  23390 19084 
deferred tax asset not recognised 10384 – 
nondeductible penalties 4556 2037 
nondeductible compensation for gas  2813 1711 
net foreign exchange loss  1020 1624 
nondeductible social expenditures  886 890 
nondeductible cost of technological loss  192 1850 
other nondeductible expenses 4566 3828 
income tax expenses reported in the consolidated financial 
statements 165275 142496 
 
1
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 20  
as at 31 december 2014 the group has tax losses of us41643 thousand mainly originated from the group 
reorganisation costs that are available to offset against future taxable profits in the companies in which the losses 
arose 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 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 
  148 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 in thousands of us dollars  31 december 2014  31 december 2013  
deferred tax asset   
accounts payable and provisions 3616 2811 
deferred tax liability   
property plant and equipment 196855 155356 
derivative financial instruments 12060  
other 1485  
net deferred tax liability 206784 152545 
the movements in the deferred tax liability were as follows 
 
in thousands of us dollars  2014 2013 
balance at 1 january 152545 148932 
current period charge to statement of income 54239 3613 
balance at 31 december 206784 152545 
32 related party transactions 
for the purpose of these consolidated financial statements transactions with related parties mainly comprise 
transactions between the subsidiaries of the company and the participants andor their subsidiaries or associated 
companies 
accounts receivable from and advances paid to related parties represented by entities controlled by the shareholders 
with significant influence over the group as at 31 december 2014 and 2013 consisted of the following 
 
in thousands of us dollars  31 december 2014  31 december 2013  
   
trade receivables and advances paid   
kazstroyservice jsc 36915 – 
  strategic report corporate governance financial report additional disclosures regulatory information
149 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 accounts payable to related parties represented by entities controlled by the shareholders with significant influence 
over the group as at 31 december 2014 and 2013 consisted of the following  
 
in thousands of us dollars  31 december 2014  31 december 2013  
   
trade payables   
kazstroyservice jsc 2753 50 
telco bv 29 – 
prolag bvba – 240 
amersham oil llp – 52 
during the years ended 31 december 2014 and 2013 the group had the following transactions with related parties 
represented by entities controlled by the shareholders with significant influence over the group 
  
in thousands of us dollars  2014  2013  
   
purchases   
kazstroyservice jsc 6538 – 
management fees and consulting services   
cervus business services 1981 – 
amersham oil llp 455 1506 
prolag bvba 668 1253 
probel capital management nv – 17507 
crest capital management nv 824 – 
telco bv 744 – 
on 19 may 2014 sepol ag and nostrum oil coöperatief ua “coop” entered into a purchase agreement for 
the acquisition by coop of the entire issued share capital of amersham oil llp the “amersham acquisition 
agreement” for an initial consideration of us1915 thousand 
on 19 may 2014 crest capital management nv petra noé and coop entered into a purchase agreement for the 
acquisition by coop of the entire issued share capital of prolag bvba the “prolag acquisition agreement” for an 
initial consideration of us1 as all services previously provided by prolag to the group were internalised within 
probel prior to the acquisition of probel a price adjustment of us212 thousand was agreed and paid with respect to 
the acquisition of prolag bvba 
on 28 july 2014 zhaikmunai llp entered into a contract with jsc ogcc kazstroyservice the “contractor” for 
the construction of the third unit of the groups gas treatment facility for a consideration of us150 million 
the contractor is an affiliate of kazstroyservice bv which as at 31 december 2014 owned approximately 266 
of the companys ordinary shares 
on 30 december 2013 elata burgerlijke maatschap petra noé frank monstrey and coop entered into a 
purchase agreement for the acquisition by coop of the entire issued share capital of probel capital management nv 
for an initial consideration of us28836 thousand and a price adjustment of us3631 thousand 
as at 31 december 2013 management fees and consulting services were payable in accordance with the technical 
assistance agreements signed between members of the group and amersham oil llp and prolag bvba related to 
the rendering of geological geophysical drilling technical and other consultancy services  150 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 during the year ended 31 december 2014 management and consulting services were provided in accordance with 
business center and consultancy agreements signed between members of the group and cervus business services 
bvba  
33 audit and nonaudit fees 
during the years ended 31 december 2014 and 2013 audit and nonaudit fees comprise the following 
 
in thousands of us dollars  2014 2013 
   
audit of the financial statements 684 314 
total audit services 684 314 
   
auditrelated assurance services 319 105 
taxation compliance services 40 40 
services relating to corporate finance transactions 730 252 
total nonaudit services 1089 397 
   
total fees 1773 711 
the audit fees in the table above include the audit fees of us12 thousand in relation to parent company 
34 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 
penalties and interest related to reported and discovered violations of kazakhstan’s tax laws are severe penalties are 
generally 50 of the taxes additionally assessed and interest is assessed at the refinancing rate established by the 
national bank of kazakhstan multiplied by 25 as a result penalties and interest can amount to multiples of any 
assessed taxes 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 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 2014 as at 31 december 2014 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 
abandonment and site restoration decommissioning 
as kazakh laws and regulations concerning site restoration and cleanup 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 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  strategic report corporate governance financial report additional disclosures regulatory information
151 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 and the government’s assessment of respective parties’ ability to pay for the costs related to environmental 
reclamation  
however depending on any unfavourable claims or penalties assessed by the kazakh regulatory agencies it is 
possible that the group’s future results of operations or cash flow could be materially affected in a particular period 
capital commitments 
as at 31 december 2014 the group had contractual capital commitments in the amount of us248644 thousand 31 
december 2013 us26842 thousand mainly in respect to the group’s oil field development activities 
operating lease  
the group entered into a cancellable lease agreement for the main administrative office in uralsk in october 2007 
for a period of 20 years for us 15 thousand per month 
in 2010 the group entered into several agreements on lease of 650 railway tank wagons for transportation of 
hydrocarbon products for a period of up to seven years for kzt 6989 equivalent of us 47 per day per one wagon 
the lease agreements may be early terminated either upon mutual agreement of the parties or unilaterally by one of 
the parties if the other party does not fulfil its obligations under the contract 
the total of future minimum lease payments under noncancellable operating leases was represented as follows 
 
in thousands of us dollars  31 december 2014  31 december 2013  
no later than one year 14788 12501 
later than one year and no later than five years 17671 23846 
later than five years – – 
 lease expenses of railway tank wagons for the year ended 31 december 2014 amounted to us14622 thousand 
fy 2013 us12628 thousand 
social and education commitments 
as required by the contract as amended by inter alia supplement 9 the group is obliged to 
i spend us 300 thousand per annum to finance social infrastructure 
ii make an accrual of one percent per annum of the actual investments for the chinarevskoye field for the 
purposes of educating kazakh citizens and 
iii adhere to a spending schedule on education which lasts until and including 2020 
the contracts for exploration and production of hydrocarbons from rostoshinskoye darjinskoye and yuzhno 
gremyachinskoye fields require fulfilment of several social and other obligations  
the outstanding obligations under the contract for exploration and production of hydrocarbons from rostoshinskoye 
field as amended on 9 august 2013 require the subsurface user to 
i spend us1196 thousand to finance social infrastructure of the region during the exploration stage 
including us1000 thousand for funding of development of astana city in case of commercial discovery 
ii invest at least us16820 thousand for exploration of the field during the exploration period  
iii reimburse historical costs of us372 thousand to the government upon commencement of production 
stage 
iv create a liquidation fund special deposit account with local bank equal to us 206 thousand  152 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 the outstanding obligations under the contract for exploration and production of hydrocarbons from darjinskoye 
field after its amendment on 23 january 2014 require the subsurface user to 
i spend at least us52 thousand for education of personnel engaged to work under the contract during the 
exploration stage 
ii spend us73 thousand to finance social infrastructure of the region 
iii invest at least us19392 thousand for exploration of the field during the exploration period 
iv create a liquidation fund special deposit account with local bank equal to us208 thousand 
the outstanding obligations under the contract for exploration and production of hydrocarbons from yuzhno
gremyachinskoye field after its amendment on 23 january 2014 require the subsurface user to 
i spend at least us101 thousand for education of personnel engaged to work under the contract during the 
exploration stage 
ii spend us74 thousand to finance social infrastructure of the region 
iii invest at least us32298 thousand for exploration of the field during the exploration period 
iv create a liquidation fund special deposit account with local bank equal to us342 thousand 
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
35 financial risk management objectives and policies 
the group’s principal financial liabilities comprise borrowings payables to government of kazakhstan trade 
payables and other current liabilities the main purpose of these financial liabilities is to finance the development of 
the chinarevskoye oil and gas condensate field and its operations as well as exploration of the three new oil and gas 
fields – rostoshinskoye darjinskoye and yuzhnogremyachinskoye the groups financial assets consist of trade 
and other receivables noncurrent investments current investments and cash and cash equivalents 
the main risks arising from the group’s financial instruments are interest rate risk foreign exchange risk liquidity 
risk credit risk and commodity price risk the group’s management reviews and agrees policies for managing each 
of these risks which are summarized below  
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 2014 and 2013 as the group had no financial instruments with 
floating rates as at years ended 31 december 2014 and 2013 
foreign currency risk 
as a significant portion of the group’s operation is the 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   strategic report corporate governance financial report additional disclosures regulatory information
153 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 the following table demonstrates the sensitivity to a reasonably possible change in the us dollars exchange rate 
with all other variables held constant of the group’s profit before tax the impact on equity is the same as the impact 
on profit before tax 
 
change in tenge to 
us dollar exchange 
rate 
effect on profit 
before tax 
   
2014   
us dollar thousand  1737 1168 
us dollar thousand  1737 1168 
2013   
us dollar thousand  3000 3294 
us dollar thousand  1000 1098 
during the year ended 31 december 2014 a significant drop in oil prices and some other noneconomic factors were 
observed which caused increase in volatility of tenge exchange rates and overall market volatility statistics for the 
year ended 31 december 2014 reflect the expected behaviour of market in 2015 the ranges of reasonably possible 
changes in market risk variables were estimated by analysing annual standard deviations based on the historical 
market data for the year ended 31 december 2014 
the group’s foreign currency denominated monetary assets and liabilities were as follows 
as at 31 december 2014 tenge 
russian 
roubles euro other total 
      
cash and cash equivalents 8713 – 10307 106 19126 
trade receivables 12331 – – – 12331 
trade payables 27030 965 3479 256 31730 
other current liabilities 19331 115 7010 7 26463 
 25317 1080 182 157 26736 
      
as at 31 december 2013 tenge 
russian 
roubles euro other total 
      
cash and cash equivalents 5491 – 3492 – 8983 
trade receivables 27619 – 1 – 27620 
trade payables 42950 372 2472 5 45799 
other current liabilities 257 – 7173 – 7430 
 10097 372 6152 5 16626 
 liquidity risk 
liquidity risk is the risk that the group will encounter difficulty in raising funds to meet commitments associated 
with its financial liabilities liquidity risk may result from an inability to sell a financial asset quickly at close to its 
fair value 
the group monitors 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 loans hedges export financing and financial leases   154 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 the group’s policy is that while it has an investment program ongoing a not more than 25 of borrowings should 
mature in the next twelvemonth period and b a minimum balance of us 50 million is retained on the balance sheet 
post repayment or refinancing of any debt due in the next twelvemonth period 
the groups total outstanding debt consists of two notes us 560 million issued in 2012 and maturing in 2019 and 
us 400 million issued in 2014 and maturing in 2019 the group assessed the concentration of risk with respect to 
refinancing its debt and concluded it to be low  
the table below summarizes the maturity profile of the groups financial liabilities at 31 december 2014 and 2013 
based on contractual undiscounted payments 
as at 31 december 2014 
on 
demand 
less than 
3 months 
312 
months 15 years 
more than 
5 years total 
       
borrowings – 12750 52650 1221600 – 1287000 
trade payables 48095 – 1524 – – 49619 
other current liabilities 18126 – – – – 18126 
due to the government of 
kazakhstan – 258 773 4124 11340 16495 
 66221 13008 54947 1225724 11340 1371240 
       
as at 31 december 2013 
on 
demand 
less than 
3 months 
312 
months 15 years 
more than 
5 years total 
       
borrowings – – 43613 259902 594691 898206 
trade payables 58518 – – – – 58518 
other current liabilities 20571 – – – – 20571 
due to the government of 
kazakhstan – 258 773 4124 12371 17526 
 79089 258 44386 264026 607062 994821 
 credit risk 
financial instruments which potentially subject the group to credit risk consist primarily of derivative financial 
instruments accounts receivable and cash in banks the maximum exposure to credit risk is represented by the 
carrying amount of each financial asset the group considers that its maximum exposure is reflected by the amount 
of trade accounts receivable cash and cash equivalents and derivative financial instruments 
the group places its tenge denominated cash with sb sberbank jsc which has a credit rating of ba3 stable from 
moodys rating agency and its us dollar denominated cash with bnp paribas with a credit rating of a1 negative 
and ing with a credit rating of a2 negative from moodys rating agency at 31 december 2014 the group does not 
guarantee obligations of other parties 
the group sells its products and makes advance payments only to recognized creditworthy third parties in addition 
receivable balances are monitored on an ongoing basis with the result that the groups exposure to bad debts and 
recoverability of prepayments made is not significant and thus risk of credit default is low 
customer credit risk is managed by each business unit subject to the group’s established policy procedures and 
control relating to customer credit risk management credit quality of a customer is assessed based on an extensive 
credit rating scorecard outstanding customer receivables are regularly monitored  
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  strategic report corporate governance financial report additional disclosures regulatory information
155 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 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 
fair values of financial instruments 
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 
 carrying amount fair value 
in thousands of us dollars  
31 december 
2014  
31 december 
2013  
31 december 
2014  
31 december 
2013  
     
financial instruments measured at fair 
value     
derivative financial instruments 60301 – 60301 – 
financial liabilities measured at amortised 
cost     
interest bearing borrowings 945114 628423 1037320 686795 
total 1005415 628423 1097621 686795 
the management assessed that cash and cash equivalents shortterm deposits trade receivables trade payables and 
other current liabilities approximate their carrying amounts largely due to the shortterm maturities of these 
instruments  
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 the fair value of derivative financial instruments is categorised as level 3 within the fair value 
hierarchy and is calculated using blackscholes valuation model based on brent crude futures traded on the 
intercontinental exchange with the relative expiration dates ranging from the current reporting date until march 
2016 
the following table shows ranges of the inputs depending on maturity which are used in the model for calculation of 
the fair value of the derivative financial instruments as at 31 december 2014 and 31 december 2013  
 31 december 2014  31 december 2013  
   
future price at the reporting date us 592679 – 
historical volatility  16021773 – 
riskfree interest rate  025067 – 
maturity months 315 – 
the expected volatility reflects the assumption that the historical volatility is indicative of future trends which may 
also not necessarily be the actual outcome 
the following table reflects the results of the changes in volatilities and oil price assumptions on the fair value of the 
derivative financial instrument 
in thousands of us dollars  
increase in the 
assumption 
decrease in the 
assumption 
   
increasedecrease in gain on derivative financial instruments due 
to change in oil price assumption us2bbl 4959 5165 
increasedecrease in gain on derivative financial instruments due 
to change in discount rate assumption 2 808 664  156 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 the contingent consideration liability under acquisition agreement of darjinskoye and yuzhnogremyachenskoye oil 
and gas fields note 7 and 21 outstanding as at 31 december 2013 was recognised at fair value which was assessed 
to be equal to its nominal amount due to its shortterm nature and respectively categorised as level 3 within the fair 
value hierarchy there were no gains or losses arising during 2013 from fair value measurement of this contingent 
consideration liability  
during the years ended 31 december 2014 and 2013 there were no transfers between the levels of fair value 
hierarchy of the groups financial instruments 
capital management 
for the purpose of the group’s capital management capital includes issued capital additional paidin capital and all 
other equity reserves attributable to the equity holders of the parent the primary objective of the group’s capital 
management is to maximise the shareholder value 
in order to achieve this overall objective the group’s capital management amongst other things aims to ensure that 
it meets financial covenants attached to the notes that define capital structure requirements breaches in meeting the 
financial covenants would permit the lenders to immediately call borrowings there have been no breaches in the 
financial covenants of the notes in the current period nor the prior period 
the group manages its capital structure and makes adjustments in light of changes in economic conditions and the 
requirements of the financial covenants to maintain or adjust the capital structure the group may adjust the 
distribution payment to participants return capital to participants or increase partnership capital the group monitors 
capital using a gearing ratio which is net debt divided by total capital plus net debt the group’s policy is to keep 
the gearing ratio between 20 and 40 the group includes within net debt interest bearing loans and borrowings 
less cash shortterm deposits and longterm deposits 
 
in thousands of us dollars  2014 2013 
   
interest bearing borrowings 945114 628423 
less cash and cash equivalents restricted cash and current and 
noncurrent investments 405467 244131 
net debt 539647 384292 
   
equity 917680 832451 
total capital 917680 832451 
   
capital and net debt 1457327 1216743 
   
gearing ratio 37 32 
no changes were made in the objectives policies or processes for managing capital during the years ended 31 
december 2014 and 2013 
36 events after the reporting period 
the initial purchase price of us1915 thousand with respect to the acquisition of amersham oil llp was paid on 
28 january 2015 the amount of the price adjustment with respect to the acquisition of amersham oil llp has not 
yet been agreed or paid as at the date of the authorisation of the financial statements for issue but it is estimated at 
us487 thousand respective liability for this amount has been recognised within other current liabilities note 21 
as at 31 december 2014  strategic report corporate governance financial report additional disclosures regulatory information
157 nostrum oil  gas plc annual report 2014 
consolidated financial statements 
 
notes to the consolidated financial statements continued 
 
 the contract for exploration and production of hydrocarbons from darjinskoye field and the contract for exploration 
and production of hydrocarbons from yuzhnogremyachinskoye field were both amended on 24 february 2015 to 
reduce the obligations referred to in note 33 above in relation to those fields 
on 11 march 2015 the group received the written permission on extension of the exploration period for the 
rostoshinskoye field to 8 february 2017 the supplementary agreement is expected to be signed soon 
the board is proposing a final dividend of us027 per ordinary share for the year ended 31 december 2014 
subject to shareholder approval at the agm 
  parent company 
ﬁnancial 
statements
158 nostrum oil  gas plc annual report 2014 strategic report corporate governance financial report additional disclosures regulatory information
159 nostrum oil  gas plc annual report 2014 
parent company financial statements 
contents 
page 
parent company statement of financial position  160 parent company statement of cash flows 161 parent company statement of changes in equity 162 notes to the parent company financial statements  163 1 general  163 2 basis of preparation  163 3 changes in accounting policies and disclosures  164 4 summary of significant accounting policies  165 5 investments in subsidiaries  168 6 receivables from related parties  168 7 cash and cash equivalents  168 8 shareholders’ equity  168 9 payables to related parties  169 10 auditors’ remuneration  169 11 directors’ remuneration  169 12 related party transactions  169 13 financial risk management objectives and policies  170 14 events after the reporting period  170 160 nostrum oil  gas plc annual report 2014 
parent company financial statements 
the accounting policies and explanatory notes on pages 163 through 170 are an integral part of these parent 
company financial statements 
parent company statement of financial position 
as at 31 december 2014 
 
in thousands of us dollars  notes 31 december 2014 31 december 2013 
assets    
noncurrent assets    
investments in subsidiaries 5 106000 – 
  106000 – 
    
current assets    
receivables from shareholders  – 80 
receivables from related parties 6 26367 – 
cash at bank and in hand 7 216 576 
  26583 656 
    
total assets  132583 656 
    
equity and liabilities    
shareholders equity    
issued share capital 8 3203 656 
retained earnings  102391 – 
  105594 656 
    
current liabilities    
payables from related parties 9 26333 – 
trade payables  238 – 
accrued liabilities  418 – 
  26989 – 
    
equity and liabilities  132583 656 
the financial statements of nostrum oil  gas plc registered number 8717287 were approved by the board of 
directors signed on behalf of the board 
 
 
      
kaiuwe kessel     janru muller 
chief executive officer    chief financial officer  strategic report corporate governance financial report additional disclosures regulatory information
161 nostrum oil  gas plc annual report 2014 
parent company financial statements 
the accounting policies and explanatory notes on pages 163 through 170 are an integral part of these parent 
company financial statements 
parent company statement of cash flows 
for the year ended 31 december 2014 
 
    
in thousands of us dollars notes 2014 2013 
    
cash flow from operating activities    
loss before income tax  406 – 
adjustments for    
accrued liabilities  418 – 
operating profit before working capital changes  12 – 
changes in working capital    
change in receivables  43 – 
change in payables  243 – 
cash generated from operations  298 – 
net cash flows from operating activities  298 – 
    
cash flow from investing activities    
contribution in subsidiary  reorganisation 8 106000 – 
net cash used in investing activities  106000 – 
    
cash flow from financing activities    
funds borrowed  reorganisation 8 2244405 – 
funds repaid  reorganisation 8 2244405 – 
proceeds from issue of share capital 8 106000 576 
redemption of shares 8 656 – 
net cash from  used in financing activities  105344 576 
    
effects of exchange rate changes on cash and cash equivalents  2 – 
net increasedecrease in cash and cash equivalents  360 576 
    
cash and cash equivalents at the beginning of the year 7 576 – 
cash and cash equivalents at the end of the year 7 216 576 
during the year ended 31 december 2014 noncash transactions included receivables from nostrum benefit trust 
in the amount of us26333 thousand and payables to nostrum oil cooperatief ua  in the amount of us26333 
thousand which were transferred to the company as part of the reorganisation 
  162 nostrum oil  gas plc annual report 2014 
parent company financial statements 
the accounting policies and explanatory notes on pages 163 through 170 are an integral part of these parent 
company financial statements 
parent company statement of changes in equity 
as at 31 december 2014 
 
in thousands of us dollars   
issued 
share 
capital 
share 
premium 
account 
retained 
earnings total 
      
as at incorporation  – – – – 
      
loss for the year  – – – – 
total comprehensive loss for the year  – – – – 
      
issue of shares 8 656 – – 656 
as at 31 december 2013  656 – – 656 
      
loss for the year  – – 406 406 
total comprehensive loss for the year  – – 406 406 
      
redemption of shares 8 656 – – 656 
issue of share capital 8 3203 102797 – 106000 
transfer to distributable reserves 8 – 102797 102797 – 
as at 31 december 2014  3203 – 102391 105594 
  strategic report corporate governance financial report additional disclosures regulatory information
163 nostrum oil  gas plc annual report 2014 
parent company financial statements 
the accounting policies and explanatory notes on pages 163 through 170 are an integral part of these parent 
company financial statements 
notes to the parent company financial statements 
1 general 
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 4th floor 5354 grosvenor street london uk w1k 3hu 
the subsidiary undertakings of the company as at 31 december 2014 and the percentage holding of their capital are 
set out below 
company 
country of registration 
or incorporation form of capital 
ownership 
 
subsidiary undertakings    
    
direct    
nostrum oil bv netherlands ordinary shares 100 
nostrum oil coöperatief ua netherlands members interests 100 
    
indirect    
claydon industrial limited british virgin islands ordinary shares 100 
condensate holding llp republic of kazakhstan participatory interests 100 
grandstil llc russian federation participatory interests 100 
investprofi llc russian federation participatory interests 100 
jubilata investments limited british virgin islands ordinary shares 100 
nostrum oil  gas finance bv netherlands ordinary shares 100 
nostrum oil  gas uk ltd england and wales ordinary shares 100 
probel capital management nv belgium ordinary shares 100 
prolag bvba belgium ordinary shares 100 
zhaikmunai llp republic of kazakhstan participatory interests 100 
zhaikmunai netherlands bv netherlands ordinary shares 100 
nostrum oil  gas plc and its whollyowned subsidiaries are hereinafter referred to as “the group” 
as part of the reorganisation the company became the holding company of the group through its direct subsidiaries 
notes 8 of the financial statements of the company provides more information on the reorganisation 
2 basis of preparation 
the company financial statements for the year ended 31 december 2014 have been prepared on a going concern 
basis and in accordance with the companies act 2006 and international financial reporting standards “ifrs” 
issued by international accounting standards board “iasb” as adopted by the european union 
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 
as permitted by section 4083 of the companies act 2006 the profit and loss account of the company is not 
presented in the company financial statements during the reporting periods there were no transactions impacting the 
statement of other comprehensive income 
going concern 
these company financial statements have been prepared on a going concern basis 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 the 
company financial statements  164 nostrum oil  gas plc annual report 2014 
parent company financial statements 
 
notes to the parent company financial statements continued 
 
 
3 changes in accounting policies and disclosures 
new standards interpretations and amendments thereof adopted by the company  
the accounting policies adopted are consistent with those of the previous financial year except for the following 
amendments to ifrs effective as at 1 january 2014 
ias 32 offsetting financial assets and financial liabilities – amendments to ias 32 
these amendments clarify the meaning of currently has a legally enforceable right to setoff and the criteria for non
simultaneous settlement mechanisms of clearing houses to qualify for offsetting and is applied retrospectively these 
amendments have no impact on the company since none of the entities in the company has any offsetting 
arrangements  
amendments to ias 36 – disclosures on recoverable amount for nonfinancial assets 
these amendments eliminate unintended consequences of ifrs 13 fair value measurement in part of information 
disclosure according to ias 36 asset impairment besides these amendments require disclosing the recoverable 
amount of assets or cash generation unit “cgu” on which the impairment loss was recognized or recovered during 
the reporting period these amendments had no impact on the financial statements of the company 
ifric 21 levies 
ifric 21 clarifies that an entity recognises a liability for a levy when the activity that triggers payment as identified 
by the relevant legislation occurs for a levy that is triggered upon reaching a minimum threshold the interpretation 
clarifies that no liability should be anticipated before the specified minimum threshold is reached retrospective 
application is required for ifric 21 this interpretation has no impact on the company as it has applied the 
recognition principles under ias 37 provisions contingent liabilities and contingent assets consistent with the 
requirements of ifric 21 in prior years 
standards issued but not yet effective 
the standards and interpretations that are issued but not yet effective up to the date of issuance of the company’s 
financial statements are disclosed below the company intends to adopt these standards if applicable when they 
become effective 
ifrs 9 financial instruments 
in july 2014 the iasb issued the final version of ifrs 9 financial instruments which reflects all phases of the 
financial instruments project and replaces ias 39 financial instruments recognition and measurement and all 
previous versions of ifrs 9 the standard introduces new requirements for classification and measurement 
impairment and hedge accounting ifrs 9 is effective for annual periods beginning on or after 1 january 2018 with 
early application permitted retrospective application is required but comparative information is not compulsory 
early application of previous versions of ifrs 9 2009 2010 and 2013 is permitted if the date of initial application 
is before 1 february 2015 the adoption of ifrs 9 is not expected to have an effect on the classification and 
measurement of the company’s financial assets and the company’s financial liabilities 
annual improvements 20102012 cycle 
these improvements are effective from 1 july 2014 and are not expected to have a material impact on the company 
they include 
ias 24 related party disclosures  
the amendment is applied retrospectively and clarifies that a management entity an entity that provides key 
management personnel services is a related party subject to the related party disclosures in addition an entity that  strategic report corporate governance financial report additional disclosures regulatory information
165 nostrum oil  gas plc annual report 2014 
parent company financial statements 
 
notes to the parent company financial statements continued 
 
 
uses a management entity is required to disclose the expenses incurred for management services these amendments 
are not expected to have effect on the company’s future financial statements since the company always disclosed 
the companies providing management services as related parties 
annual improvements 20112013 cycle 
these improvements are effective from 1 july 2014 and are not expected to have a material impact on the company 
they include 
ifrs 13 fair value measurement 
the amendment is applied prospectively and clarifies that the portfolio exception in ifrs 13 can be applied not only 
to financial assets and financial liabilities but also to other contracts within the scope of ifrs 9 or ias 39 as 
applicable it is not expected that the amendment will have material effect on the company’s financial position or 
performance 
amendments to ifrs 11 joint arrangements accounting for acquisitions of interests 
the amendments to ifrs 11 require that a joint operator accounting for the acquisition of an interest in a joint 
operation in which the activity of the joint operation constitutes a business must apply the relevant ifrs 3 principles 
for business combinations accounting the amendments also clarify that a previously held interest in a joint operation 
is not remeasured on the acquisition of an additional interest in the same joint operation while joint control is 
retained in addition a scope exclusion has been added to ifrs 11 to specify that the amendments do not apply when 
the parties sharing joint control including the reporting entity are under common control of the same ultimate 
controlling party 
the amendments apply to both the acquisition of the initial interest in a joint operation and the acquisition of any 
additional interests in the same joint operation and are prospectively effective for annual periods beginning on or 
after 1 january 2016 with early adoption permitted these amendments are not expected to have any impact to the 
company 
amendments to ias 27 equity method in separate financial statements 
the amendments will allow entities to use the equity method to account for investments in subsidiaries joint 
ventures and associates in their separate financial statements entities already applying ifrs and electing to change 
to the equity method in its separate financial statements will have to apply that change retrospectively for firsttime 
adopters of ifrs electing to use the equity method in their separate financial statements they will be required to 
apply this method from the date of transition to ifrs the amendments are effective for annual periods beginning on 
or after 1 january 2016 with early adoption permitted these amendments are not expected to have any impact on 
the company’s financial statements  
4 summary of significant 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 in the functional currency by applying the spot exchange rate 
ruling at the date of the transaction  
monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates 
of exchange at the reporting date  166 nostrum oil  gas plc annual report 2014 
parent company financial statements 
 
notes to the parent company financial statements continued 
 
 
nonmonetary 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 nonmonetary items measured at fair value in a foreign 
currency are translated using the exchange rates at the date when the fair value is determined 
investments 
investments in subsidiaries are recorded at cost the company assesses investments for impairment whenever events 
or changes in the circumstances indicate that the carrying value of an investment may not be recoverable if any such 
indication of impairment exists the company makes an estimate of its recoverable amount where the carrying 
amount of an investment exceeds its recoverable amount the investment is considered impaired and is written down 
to its recoverable amount 
financial assets 
initial recognition and measurement  
financial assets within the scope of ias 39 are classified as financial assets at fair value through the statement of 
comprehensive income loans and receivables heldtomaturity investments availableforsale financial assets or as 
derivatives designated as hedging instruments in an effective hedge as appropriate the company determines the 
classification of its financial assets at initial recognition 
all financial assets are recognised initially at fair value plus in the case of investments not at fair value through 
profit or loss directly attributable transaction purchases or sales of financial assets that require delivery of assets 
within a time frame established by regulation or convention in the marketplace regular way trades are recognised 
on the trade date ie the date that the company commits to purchase or sell the asset 
the company’s financial assets include investments loans cash and cash equivalents and receivables 
subsequent measurement 
receivables  
loans and receivables are nonderivative financial assets with fixed or determinable payments that are not quoted in 
an active market after initial measurement such financial assets are subsequently measured at amortised cost using 
the effective interest rate method less impairment 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 effective interest rate the effective 
interest rate amortisation is included in finance income in the statement of profit or loss and other comprehensive 
income the losses arising from impairment are recognised in the statement of profit or loss and other comprehensive 
income in finance costs for loans and in cost of sales or other operating expenses for receivables 
accounts receivable are recognized and carried at original invoice amount less an allowance for any uncollectible 
amounts an estimate for uncollectible amounts is made when collection of the full amount is no longer probable 
these estimates are reviewed periodically and as adjustments become necessary they are reported as expense 
credit in the period in which they become known 
cash and cash equivalents 
cash and cash equivalents in the statement of financial position comprise cash at banks 
derecognition 
a financial asset or where applicable a part of a financial asset or part of a group of similar financial assets is 
derecognized when 
the rights to receive cash flows from the asset have expired 
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 ‘passthrough’ arrangement; and either a  strategic report corporate governance financial report additional disclosures regulatory information
167 nostrum oil  gas plc annual report 2014 
parent company financial statements 
 
notes to the parent company financial statements continued 
 
 
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 
impairment of financial assets 
the company assesses at each reporting date whether there is any objective evidence that a financial asset or a group 
of financial assets is impaired a financial asset or a group of financial assets is deemed to be impaired if and only if 
there is objective evidence of impairment as a result of one or more events that has occurred after the initial 
recognition of the asset an incurred ‘loss event’ and that loss event has an impact on the estimated future cash flows 
of the financial asset or the group of financial assets that can be reliably estimated evidence of impairment may 
include indications that the debtors or a group of debtors is experiencing significant financial difficulty default or 
delinquency in interest or principal payments the probability that they will enter bankruptcy or other financial 
reorganization and where observable data indicate that there is a measurable decrease in the estimated future cash 
flows such as changes in arrears or economic conditions that correlate with defaults 
financial liabilities 
initial recognition and measurement 
financial liabilities within the scope of ias 39 are classified as financial liabilities at fair value through profit or loss 
loans and borrowings or as derivatives designated as hedging instruments in an effective hedge as appropriate the 
company determines the classification of its financial liabilities at initial recognition all financial liabilities are 
recognized initially at fair value and in the case of loans and borrowings net of directly attributable transaction costs 
the company’s financial liabilities include payables and accrued liabilities 
subsequent measurement 
after initial recognition interest bearing borrowings are subsequently measured at amortized cost using the effective 
interest rate method eir gains and losses are recognized in the profit or loss when the liabilities are derecognized 
as well as through the eir amortization process amortized cost is calculated by taking into account any discount or 
premium on acquisition and fee or costs that are an integral part of the eir the eir amortization is included in 
finance cost in the statement of comprehensive income 
derecognition 
a financial liability is derecognized 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 a 
derecognition of the original liability and the recognition of a new liability and the difference in the respective 
carrying amounts is recognized in 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 recognized amounts and there is an intention to 
settle on a net basis or to realize the assets and settle the liabilities simultaneously 
fair value of financial instruments 
the fair value of financial instruments that are traded in active markets at each reporting date is determined by 
reference to quoted market prices or dealer price quotations bid price for long positions and ask price for short 
positions without any deduction for transaction costs for financial instruments not traded in an active market the 
fair value is determined using appropriate valuation techniques such techniques may include using recent arm’s 
length market transactions reference to the current fair value of another instrument that is substantially the same 
discounted cash flow analysis or other valuation models  168 nostrum oil  gas plc annual report 2014 
parent company financial statements 
 
notes to the parent company financial statements continued 
 
 
5 investments in subsidiaries 
investments of the company as at 31 december 2014 comprised of 
 
in us dollars    
company 31 december 2014 31 december 2013 
   
nostrum oil bv 1 – 
nostrum oil coöperatief ua 106000000 – 
6 receivables from related parties 
as at 31 december 2014 receivables from related parties are represented by a receivable from the nostrum employee 
benefit trust in amount of us 25433 thousand 2013 nil and a receivable from nostrum oil coöperatief ua in 
amount of us 934 thousand 2013 nil 
 
7 cash and cash equivalents 
in thousands of us dollars  31 december 2014 31 december 2013 
current accounts in us dollars 174 576 
current accounts in other currencies 42 – 
 216 576 
8 shareholders’ equity 
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 group reorganisation referred to in that 
resolution  
on 18 june 2014 following the decision of the board of directors nostrum oil  gas lp commenced the group’s 
reorganisation this was implemented by means of an exchange offer made by the company to the gdr holders of 
nostrum oil  gas lp which were entitled to receive 1 share of nostrum oil  gas plc for each gdr of nostrum 
oil  gas lp 
on 17 september 2014 us102797484 were transferred from the share premium account to distributable reserves 
based on a special resolution passed at a general meeting of the company which was confirmed by an order of the 
high court of justice 
as part of the reorganisation scheme the company received funds in the amount of us2244405 thousand from 
vtb capital plc under the facility agreement and repaid them on the same day 
share capital of nostrum oil  gas plc 
as at 31 december 2014 the ownership interests in the company consist of ordinary shares which are listed on the 
london stock exchange these shares have been issued and fully paid as at 31 december 2013 the company had 
subscriber shares and redeemable preference shares all of which were cancelled on 7 august 2014 
   strategic report corporate governance financial report additional disclosures regulatory information
169 nostrum oil  gas plc annual report 2014 
parent company financial statements 
 
notes to the parent company financial statements continued 
 
 
number of shares 
subscriber and 
redeemable 
preference shares ordinary shares 
   
balance at 31 december 2013 410002  
share capital – 188182958 
cancellation of shares 410002 – 
balance at 31 december 2014 – 188182958 
the subscriber and redeemable preference shares had a nominal value of gbp 1 and the ordinary shares have a 
nominal value of gbp 001  
as permitted by section 408 of the companies act 2006 the company has elected not to present its own profit and 
loss account for the year the company reported a loss for the financial year ended 31 december 2014 of us406 
thousand 2013 nil 
9 payables to related parties 
as at 31 december 2014 amounts payable to related parties in amount of us26333 thousand 2013 nil are 
represented by arrangements with the company’s subsidiary nostrum oil coöperatief ua in respect of the nostrum 
employee benefit trust 
10 auditors’ remuneration 
the fees for the audit of the company amount to us12 thousand 2013 nil 
11 directors’ remuneration 
the directors of the company are also directors of the group the aggregate amount of remuneration paid to or 
receivable by directors in respect of qualifying services for the financial year ended 31 december 2014 was 
us4992 thousand 2013 us2899 thousand of which us325 thousand 2013 nil was paid by the company to 
the nonexecutive directors  the remaining amount was paid by other group companies to the 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 
full details of individual directors’ remuneration are given in the directors’ remuneration report on pages 8286 of 
the annual report 
12 related party transactions 
related parties of the company include its direct and indirect subsidiaries associates key management personnel and 
other entities that are under the control or significant influence of the key management personnel 
during the year ended 31 december 2014 based on the service agreement between the company and its directly 
owned subsidiary nostrum oil coöperatief ua nostrum oil  gas plc recorded an income of us2252 thousand 
as at 31 december 2014 receivables from related parties include us25433 thousand from nostrum employee 
benefit trust and us934 thousand from nostrum oil coöperatief ua 
as at 31 december 2014 liabilities to related parties include us26333 thousand payable to nostrum oil 
coöperatief ua  170 nostrum oil  gas plc annual report 2014 
parent company financial statements 
 
notes to the parent company financial statements continued 
 
 
13 financial risk management objectives and policies 
the companys financial assets consist of receivables from shareholders and cash and cash equivalents the 
company’s financial liabilities consist of 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  
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  
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 and euro denominated cash with ing with a credit rating of a2 negative from 
moodys rating agency at 31 december 2014 
receivables are amounts receivable from group companies thus risk of credit default is low 
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 shortterm 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 
14 events after the reporting period 
the company’s board of directors is proposing a final dividend of us027 per ordinary share for the year ended 
31 december 2014 subject to shareholder approval at the agm 
 strategic report corporate governance financial report regulatory information additional disclosures
annual report 2014 nostrum oil  gas plc 171
investor relations 
irnogcouk  
tel 44 203 7407430
corporate headquarters
nostrum oil  gas plc
gustav mahlerplein 23 b
1082 ms amsterdam
the netherlands
tel 31 20 737 2288
fax 31 20 737 2292
vat number nl85 33 00 288 b01
registration number kvk 59058323
registered office
nostrum oil  gas plc
5354 grosvenor street
london w1k 3hu
united kingdom
irnogcouk
tel 44 203 740 7430
fax 44 207 493 3603
registered number 8717287
place of registration england and wales
zhaikmunai llp registered office
zhaikmunai llp
592 eurasia prospect
uralsk 090002
republic of kazakhstan
astana representative office
zhaikmunai llp
office 319 22
kurman batyr prospect
astana 010000
republic of kazakhstan
auditor
ernst  young llp
london
united kingdom
legal counsel 
white  case llp
london 
united kingdom
registrar
capita asset services 
the registry 
34 beckenham road 
beckenham 
kent br3 4tu 
united kingdom
tel 0871 664 0300  44 20 8639 3399
electronic communications details
nostrum’s website provides valuable 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 wwwnogcouk for more 
information
in addition to reduce the impact on the environment 
we encourage all shareholders to receive the shareholder 
communications including annual reports and notices 
of meetings electronically 
share price information
exchange london stock exchange
ticker nogln
reuters code nognl
isin code
  
historic share price performance 
share price performance p
jan 14
feb 14
mar 14
apr 14
may 14
jun 14
jul 14
aug 14
sep 14
oct 14
nov 14
dec 14
900
800
600
700
500
400
200
300
100
0
 financial calendar – 2015
 operational update 28 april
 financial results 26 may
2015 h1 operational update 28 july
2015 h1 financial results 25 august
 operational update 27 october
 financial results 24 november
equity financing
equity raising timing amount lead manager
ipo march 2008 us100m ing bank nv
secondary 
equity issue
september 2009 us300m ing bank nv
mirabaud
 securities
renaissance
 securities
investor information
regulatory information regulatory information
172 nostrum oil  gas plc annual report 2014
investor information continued
debt financing
current outstanding bond issues for nostrum oil  gas are provided in the following table
settlement maturity currency amount m coupon listing regs rule 144a
feb 2014 feb 2019 usd 400 6375 dublin  almaty cusip n964884aa2 66978caa0
isin usn64884aa29 us66978caa09
common
 code
103302323 103302307
nov 2012 nov 2019 usd 560 7 1 25 dublin  almaty cusip n97716aa7 98953vaa0
isin usn97716aa72 us98953vaa08
common
 code
085313177 085259776
for the summary of certain covenants relating to 2012 notes and 2014 notes please see the consolidated financial statements
bond yield information
february 2019
price yieldtoworst
feb 14
mar 14
apr 14
may 14
jun 14
jul 14
aug 14
sep 14
oct 14
nov 14
110
105
100
95
90
85
9
8
6
7
5
4
3
november 2019
price yieldtoworst
jan 14
feb 14
mar 14
apr 14
may 14
jun 14
jul 14
aug 14
sep 14
oct 14
dec 14
nov 14
110
105
100
95
90
80
85
12
10
8
6
4
2
credit ratings
nostrum oil  gas is currently being rated by two credit 
rating agencies standard and poor’s and moody’s investor 
services
agency rating outlook
standard and poor’s b stable
moody’s b2 stable strategic report corporate governance financial report regulatory information additional disclosures
annual report 2014 nostrum oil  gas plc 173
glossary
3d seismic survey seismic survey that is acquired processed and interpreted to yield 
a threedimensional picture of the subsurface
2009 ryder scott report the report prepared by ryder scott relating to the group’s reserves 
and resources dated 1 july 2009
2010  2011  2012 ryder scott report the report prepared by ryder scott relating to the group’s reserves 
dated 31 december of the relevant year
2013 ryder scott report the report prepared by ryder scott relating to the group’s reserves 
and resources dated 31 august 2013
2014 ryder scott report the report prepared by ryder scott relating to the group’s reserves 
and resources dated 31 december 2014
2010 notes 105 notes issued in 2010
2012 notes 7125 notes issued in 2012
2014 notes 6375 notes issued in 2014
a
antimonopoly agency the republic of kazakhstan antimonopoly authority 
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 if 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
aquifer water bearing structure
associated gas gas which occurs in crude oil reservoirs in a gaseous state
authorised oil and gas agency the state’s authorised agency in the area of oil and gas acting on the 
instructions of the president and the government currently the moe 
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 sedentary rock
bcf billion cubic feet a billion defined as 1000000000 on average 1 bcf of 
sales gas  1055 petajoules
boe barrels of crude oil equivalent ie the factor used by nostrum to convert 
volumes of different hydrocarbon production to barrels of oil equivalent
bopd barrels of crude oil per day
boepd barrels of crude oil equivalent per day 
bscfd billion standard cubic feet per day
btu british thermal unit – measurement unit for energy
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 602 billion cubic metres
cash cash and cash equivalents including current and noncurrent investments regulatory information
17 4 nostrum oil  gas plc annual report 2014
glossary continued
casing relatively thinwalled 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
chinarevskoye field the chinarevskoye oil and gas condensate field 
cng compressed natural gas
co
2
carbon dioxide
coal a sedimentary rock composed primarily of carbonaceous material formed  
by plant remains transformed by heat and time
common units limited partner interests each representing a fractional part of the rights  
and obligations of all limited partners of nostrum oil  gas lp
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 was until recently 
the ministry of energy and mineral resources of kazakhstan which in august 
2014 was reorganised into the ministry of energy moe with respect to the 
oil and gas industry 
competition law the kazakhstan law “on competition” no 112iv dated 25 december 2008 
which came into effect on 1 january 2009 
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
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 include 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
cuft cubic feet
d
daf sales made on delivery at frontier terms 
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
development plans the development plans approved by the scfd in march 2009 
directors or board the directors of the company 
downstream downstream refers to all petroleum operations occurring after delivery 
of crude oil or gas to refinery or fractionation plant
downtime downtime is all time during which an operation is postponed usually due 
to bad weather or mechanical failure
drilling fluidmud a mixture of water and drilling additives used to cool the drill bit lift cuttings 
and control swelling clays drilling fluid is stored in a sump during drilling
dry gas dry gas is natural gas methane and ethane with no significant content of 
heavier hydrocarbons it is gaseous at subsurface and surface conditions strategic report corporate governance financial report regulatory information additional disclosures
annual report 2014 nostrum oil  gas plc 175
e
ep exploration and production
ebrd european bank for reconstruction and development
ebit earnings before interest and tax 
ebitda profit before tax non recurring expenses  finance costs  foreign 
exchange lossgain  esop  depreciation – interest income  other 
expensesincome
ecological risk environmental stressors such as chemicals land change disease invasive 
species and climate change
eea european economic area 
environmental code the kazakhstan environment code no 212 dated 9 january 2007 
as amended 
ethane saturated hydrocarbon alkane with two carbon atoms in its molecule c
2
h
6
 
the second member of the paraffin series a gas under normal conditions 
a basic feedstock for petrochemical industries
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
farmin transfer of a percentage of an oil or gas permit held by the farmor in return 
for partial or complete delivery of the work program by the farmees 
note that this work would normally have had to have been delivered and 
paid for by the farmor
farmee earns a percentage interest in an oil and gas permit by helping the company 
that holds the permit to deliver the work program required by permit
farmor a farmor holds an oil and gas permit and agrees to work with another 
company who can deliver the work program required by the permit in 
return the farmee is given a percentage interest in the permit
farmout 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 program required by the permit or fulfilling other contractually 
specified conditions
fca sales made under free carrier terms
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  
on or related to the same individual geological structure feature andor 
stratigraphic condition 
fob sales made under free on board terms 
fsa financial services authority of the united kingdom
fsma the financial services and markets act 2000 as amended 
fsu former soviet union regulatory information
176 nostrum oil  gas plc annual report 2014
g
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 
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 
 gdrs the global depository receipts of nostrum oil  gas lp
geology the study of rocks
geophysics the study of the earth using physics and mathematics geophysics uses 
methods such as seismic surveying magnetic and gravity imaging to explore 
the subsurface
gj gigajoule
gjd gigajoules per day
government the government of kazakhstan
greenhouse gas a gas that contributes to the greenhouse effect by absorbing infrared 
radiation eg carbon dioxide 
gross oil and gas wells  acres gross oil and gas wells or gross acres are the total number of wells or acres  
in which the group has an interest without regard to the size of that interest 
group 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 have been proved and are referred to as 3p  2p and 
1p depending on the likelihood of commercial production from that field
i
ias international accounting standards
ifrs international financial reporting standards
ined independent nonexecutive director
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

6


9

 12


15

glossary continued strategic report corporate governance financial report regulatory information additional disclosures
annual report 2014 nostrum oil  gas plc 177
k
kazakhstan the republic of kazakhstan 
kase kazakhstan stock exchange 
kazmunaigas stateowned oil and gas company of kazakhstan
kazmunaigas exploration  
production kmg ep
onshore oil and gas exploration production subsidiary of kazmunaygas
kboe thousand barrels of oil equivalent
km kilometres
kyoto protocol the kyoto protocol to the united nations framework convention  
on climate change 
l
licence licence series mg no 253d oil issued to zhaikmunai llp by the 
government on 26 may 1997 including amendments 
licencing 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 
london stock exchange or lse london stock exchange 
lpg liquefied petroleum gas the name given to the mix of propane and butane 
in their liquid state
m
m metres
m
3
cubic metres
m
3
d cubic metres per day
man–hours an hour regarded in terms of the amount of work that can be done by one 
person within this period
mbbls thousands of barrels of crude oil
mmbbls millions of barrels of oil
mj megajoules
mboe thousands of barrels of oil equivalent
mmboe millions of barrels of oil equivalent
mmcm millions of cubic metres
mep the kazakhstan ministry of environmental protection 
mint the kazakhstan ministry of industry and new technologies 
moe the ministry of energy of kazakhstan the state’s central executive agency 
acting based upon its regulations approved by the resolution of the 
government which is currently the competent authority in oil and gas 
and the authorised oil and gas agency 
mmscfd million standard cubic feet per day for dry gas
mscf one thousand cubic feet
mtpa million tonnes per annum
multilateral well a well with several small branches laterals drilled out from the main well regulatory information
178 nostrum oil  gas plc annual report 2014
n
nbk national bank of kazakhstan 
ned nonexecutive director
nostrum nostrum oil  gas plc the listed company of the group
nostrum oil  gas plc registered office  corporate headquarters
5354 grosvenor street gustav mahlerplein 23b
london w1k 3hu 1082 ms amsterdam
uk    the netherlands
o
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 if applicable for other working interest 
owners generally pursuant to the terms of a joint operating agreement 
or comparable agreement 
p
pa plugged and abandoned – to place a cement plug into a dry hole or 
noneconomic well and abandon the well
partnership nostrum oil  gas lp  which was the holding company of the group before 
the reorganisation
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 
pj petajoule
pja petajoules per annum
prms 2007 petroleum resources management system which are a set of 
definitions and guidelines designed to provide a common reference for the 
international petroleum industry sponsored by the society for petroleum 
engineers the american association of petroleum geologists world 
petroleum council and the society for petroleum evaluation engineers 
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 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
probable reserves 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
glossary continued strategic report corporate governance financial report regulatory information additional disclosures
annual report 2014 nostrum oil  gas plc 179
possible reserves 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
psa or production sharing agreement the contract for additional exploration production and production sharing 
of crude oil hydrocarbons in the chinarevskoye oil and gas condensate field 
in the westkazakhstan 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 68iii “on production sharing agreements for 
constructing offshore petroleum operations” dated 8 july 2005 
q
qib a qualified institutional buyer as defined in rule 144a under the securities act 
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 andor gas that is confined by impermeable 
rock or water barriers and is individual and separate from other reservoirs
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
ryder scott independent petroleum consultants ryder scott company lp  
headquartered at 621 seventeenth street suite 1550 denver colorado 
80293 usa 
s
sales gas natural gas that has been processed by gas plant facilities and meets 
the required specifications under gas sales agreements
scf standard cubic feet
sec the united states securities and exchange commission 
secondee a person who is transferred temporarily to alternative employment 
or seconded
securities act the united states securities act of 1933 as amended 
seismic the use of shock waves generated by controlled explosions of dynamite or 
other means to ascertain the nature and contour of underground geological 
structures 
shut in cease production from a well
sidetrack well a well or borehole that runs partly to one side of the original line of drilling
social infrastructure assets that accommodate social services ie hospitals schools community 
housing etc
spe society of petroleum engineers
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 acceptance commission a state acceptance commission of the republic of kazakhstan is the competent 
body authorised to among other things confirm that permanent operations can 
commence for certain facilities including the gas treatment facility  regulatory information
180 nostrum oil  gas plc annual report 2014
state share the share of hydrocarbon production due in cash or kind to the republic  
of kazakhstan under the psa
subsoil law 
– old subsoil law the kazakhstan law “on subsoil and subsoil use” no 2828 dated 27 
january 1996 as amended recently replaced with the new subsoil law 
– new subsoil law the most recent kazakhstan law “on subsoil and subsoil use” no 291iv 
dated 24 june 2010 as amended 
substitution the ability for zhaikmunai llp to elect to undertake upon satisfaction of 
certain conditions to be substituted for the issuer as issuer of the notes 
whereupon it will assume all of the obligations of the issuer under the notes 
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 
plugged and abandoned 
t
takeover code the uk city code on takeovers and mergers 
tcf one trillion cubic feet
tenge or kzt the lawful currency of the republic of kazakhstan 
titleholder the titleholder is the party to whom a permit is granted by the government
tj terajoule
tonne metric tonne 
trillion 10
12
u
uk corporate governance code set of principles of good corporate governance for listed companies 
promulgated by the uk financial reporting council 
ungg 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 oilgas exploration expedition”
us dollars or us the lawful currency of the united states of america 
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
workover routine maintenance or remedial operations on a producing well in order 
to maintain restore or increase production
work program a schedule of works agreed between parties permit holders farmees  
and government contracted to be delivered in a defined time frame
water code the water code of kazakhstan no 481 dated 9 july 2003 as amended
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 operating company of the group
corporate office representative office
592 eurasia prospect  office 319
uralsk 090002  22 kurman batyr prospect
republic of kazakhstan astana 010000
 republic of kazakhstan
glossary continued strategic report corporate governance financial report regulatory information additional disclosures
annual report 2014 nostrum oil  gas plc 181
structure chart
kpi figures on page 8 are derived from the kpis of zhaikmunai llp all other members of the group have a negligible 
effect on such kpi measures
nostrum oil bv 
incorporated and principal place  
of business in the nl
nostrum oil  gas plc
incorporated in the uk
principal place of business in the nl
nostrum oil coöperatief ua
incorporated and principal place  
of business in the nl
100

99  9

0  1

nostrum
services nv
incorporated 
and principal 
place of 
business  
in belgium
claydon 
industrial 
limited 
incorporated 
in the bvi
principal place 
of business in 
the nl
zhaikmunai 
netherlands 
bv
incorporated 
and principal 
place of 
business  
in the nl
amersham 
oil llp 
incorporated 
and principal 
place of 
business  
in kazakhstan
nostrum 
services  
cis bvba
incorporated 
and principal 
place of 
business  
in belgium
10 0

10 0

99  92

10 0

10 0

10 0

save for one  
share held by  
zhaikmunai  
netherlands 
bv
10 0

save for one  
share held by  
zhaikmunai  
netherlands 
bv
nostrum oil  gas 
uk limited 
incorporated and 
principal place of 
business in the uk
nostrum oil  
gas finance bv 
incorporated 
and principal 
place of business 
in the nl
grandstill 
llc 
incorporated 
in russia 
dormant
nostrum ep 
services llc
incorporated 
and principal 
place of 
business in 
russia
10 0

10 0

10 0

10 0

jubilata 
investments 
limited
incorporated 
in the bvi
principal place 
of business  
in the nl
condensateholding 
llp
incorporated and 
principal place  
of business in 
kazakhstan
zhaikmunai 
llp
incorporated 
and principal 
place of 
business in 
kazakhstan
0 044

0 0 3 6

10 0

the above structure chart shows the group‘s structure as at the date of this report 182 nostrum oil  gas plc annual report 2014
notes  annual report 2014 nostrum oil  gas plc 183
strategic report corporate governance financial report regulatory information additional disclosures
notes  184 nostrum oil  gas plc annual report 2014
notes this report is printed on paper which is fsc 
certiﬁed the standards for wellmanaged 
forests considering environment social and 
economic issues 
designed and produced by instinctif partners 
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Summary:
 strategic report
14 nostrum oil  gas plc annual report 2014
“ during 2014 we have made significant steps towards 
the construction of our next gas treatment unit”
chief executive’s review
maintaining steady production
how we performed in 2014
2014 was another strong year from 
an operational perspective it saw 
the gas treatment facility continue to 
operate at full capacity with a complete 
range of hydrocarbon products being 
delivered to various destinations 
outside kazakhstan nostrum is now 
deep into its second development 
phase which will entail the engineering 
planning procurement construction 
and commissioning of a new gas plant 
as well as a scalable drilling programme 
spanning the next 45 years 
our performance against our four key 
objectives for the company in 2014 
was as follows
1 ensure construction of the next gas 
plant remained on track for 2016
 in the construction of our next gtu 
which will allow us to double our 
production capacity by the end of 
2016 we have spent over us150 
million and expect the total cost to 
be below us500 million 
2 continue to grow our proven 
reserve base through appraisal 
of chinarevskoye and our three 
new ﬁelds
 as we replaced over 60 of our 
production since august 2013 whilst 
the oil price environment is extremely 
different from the end of 2013 our 
strategy remains unchanged we 
have made some reductions to our 
drilling programme but aim to fill the 
gtu3 by the end of 2017 as to reach a 
combined together with gtu1 and 2 
production of 100000 boepd we 
are well positioned to withstand the 
low oil price environment as we have 
a healthy cash balance and low costs 
of production i am very excited 
about the future of our current asset 
base as well as the potential we 
have for further expansion over the 
coming years
3 establish a dedicated business 
development team
 development team to ensure we  
can quickly and accurately evaluate 
the opportunities in the region
4 ensure that the ﬁnancial position 
of the company remains stable
 company remains stable despite the 
challenging oil price environment
steady production levels
the chinarevskoye field is now in full 
production with both the oil treatment 
facility otf and the gas treatment 
facility gtf being operated at their 
nameplate capacities nostrum 
expects a daily total production 
average of at least 45000 boepd for 
2015 and 2016 all products – crude oil 
stabilised condensate lpg and dry 
gas – are sold at the best possible 
prices on the world markets and our 
operations are running at optimal 
levels we remain on target to meet 
our objective of doubling capacity  
by the end of 2016  strategic report corporate governance
annual report 2014 nostrum oil  gas plc 15
financial report regulatory information additional disclosures
future drilling programme 
at chinarevskoye
in 2014 we drilled eight wells and are 
fortunate to have a scalable drilling 
programme in front of us our ability 
to quickly scale drilling up or down 
allows us to react to the current oil 
price environment smoothly and 
without jeopardising our nonscalable 
capex we are required to complete 
six wells in 2015 to maintain production 
at current levels which is comfortably 
achievable we are able to maintain 
production at around 45000 boepd 
and complete the gtu3 at substantially 
lower oil prices than today any 
increase in the oil price above these 
levels allows us to drill more wells for 
the purpose of filling the gtu3 and 
to appraise the new fields 
construction of second gas plant
during 2014 we have made significant 
steps towards the construction of our 
next gas plant the rationale behind 
the plant is that it will allow faster 
monetisation of reserves by increasing 
treatment capacity by an additional 
25 bcm of raw gas per year bringing 
total capacity to 42 bcm of raw gas 
per annum over us150 million has 
already been invested in the plant and 
contracts relating to over us300 
million in total for procurement and 
construction have been entered into 
we remain on track to deliver the plant 
on time and on budget in the second 
half of 2016
building up further reserves  
beyond the chinarevskoye field
in addition to proving up reserves at 
chinarevskoye nostrum’s development 
plan also focuses on sustaining its 
long term production beyond the 
chinarevskoye field alone this target 
is the basis on which nostrum’s 
mergers  acquisitions strategy is 
formed this is exemplified by the 2013 
acquisition of the subsoil use rights 
related to three adjacent oil and gas 
fields rostoshinskoye darjinskoye 
and yuzhnogremyachenskoye in the 
near vicinity of the chinarevskoye field 
based on ryder scott’s analysis these 
fields could add up to 98m of 2p 
reserves nostrum looks forward to 
drilling its first well in rostoshinskoye 
during 2015
by virtue of its size development 
stage and production track record 
nostrum has acquired high visibility 
both locally and internationally 
as a result it regularly monitors further 
ma opportunities and its approach 
is to remain both pragmatic and 
prudent as it considers these options 
nostrum’s main focus remains on 
northwest kazakhstan where it 
knows the landscape and is already 
operating successfully however 
we will also consider opportunities 
outside of north western kazakhstan 
where we see the potential to create 
further shareholder value 
key priority tasks for 2015
in 2015 there are three key objectives 
for the company in order to continue 
to deliver on our strategy 
1  ensure that the financial position 
of the company remains stable 
2  ensure construction of the next 
gas plant remains on track for 2016
3  optimise the drilling programme 
to ensure that we can fill the gtu3  
as quickly as possible whilst not 
jeopardising the company’s 
financial position 
i believe that these objectives if 
successfully achieved will provide 
the platform to significantly enhance 
shareholder value we have 
demonstrated in the past that we can 
deliver on all these objectives and 
i am therefore confident as we enter 
2015 that we are well positioned to 
achieve our goals i believe we are well 
positioned to successfully execute the 
next phase of infrastructure whilst also 
ensuring the reserve base is not only 
maintained but added to over the 
coming years
kaiuwe kessel
chief executive officer