Nostrum Oil and Gas struggled on the markets today after taking a hit from an analyst downgrade.
Shares took a battering, falling by 19 per cent to 28.35p. It came as analysts at Berenberg downgraded the shares from “buy” to “sell”, setting a new target price of 25p from 200p.
It came after a disappointing set of results at the company, released yesterday.
Revenue hit $174.2m (£144m) in the first six months of the year, down from $191.5m.
Meanwhile earnings before interest, tax, depreciation and amortisation (Ebitda) fell 2.6 per cent.
The company’s production also fell to 31,096 barrels of oil equivalent from 32,524 in the same period last year.
Shares had fallen 6.6 per cent yesterday on the news of the results.
However they took a much bigger battering after the Berenberg note reached investors.
Analysts said: “Our hope for an operational turnaround for Nostrum was based on the 2019 drilling programme in the northern area of the Chinarevskoye field in Kazakhstan, where the company had previously made an encouraging discovery. However, one of the two wells has failed to flow at commercial levels.”
The company said yesterday it was on target to fully commission a new plant, GTU3, in the third quarter of this year.
“Our primary focus remains on trying to find ways to grow production in the near term. We are working to update our own geological models and incorporate the two independent studies,” said chief executive Kai-Uwe Kessel.