REG - Kistos Holdings PLC - Balder X Project Update

Kistos HoldingsAnnouncement

21/08/2024 12:00

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RNS Number : 2950B  Kistos Holdings PLC  21 August 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET
ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) (UK MAR). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK
MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

21 August 2024

 

Kistos Holdings plc

 

("Kistos" or "the Company")

 

Balder X project update - Kistos shareholders protected from any delay

 

Kistos (LON: KIST), notes that Var Energi ("Var" or "the Operator"), released
an update for the Balder X project this morning, in which Kistos Energy
(Norway) AS ("KENAS") has a 10% interest. Var reported that the target
production start date has been moved to the second quarter 2025.

 

When Kistos acquired Mime Petroleum this scenario was envisaged. In the deal
structuring with the bond holders (who effectively controlled MIME at the
time) we protected Kistos from such a delay and cost increase by the provision
of the $45 million Hybrid Bond. This $45 million is structured such that if
500,000 bbls (gross) isn't lifted from the Jotun FPSO before the 31(st) May
2025 then the full $45 million is not payable. Therefore, we as a board are
confident that there will be no adverse impact from the delay. It is likely
that the effect of the delay on Capex will be significantly less than the
positive effects of the Hybrid Bond not being paid in full.

 

In reaching the decision to delay Balder X, a key consideration was to limit
as much as possible the carryover of work on the Jotun FPSO into the offshore
installation and start-up phase. With all development wells completed and all
subsea production systems installed, the plan now is to complete the vessel
fully onshore.

 

The operator has reviewed its cost estimate for the project to reflect
sail-away of the Jotun FPSO in the spring of 2025. The revised CAPEX forecast
represents an increase of approximately US$400 million gross pre-tax
(approximately $40 million net to Kistos pre-tax, of which $8.8 million is the
approximate post-tax impact) of which 75% is expected to be incurred in 2025.

 

As announced by Var this morning, Balder X, will secure production from the
Balder Area beyond 2045. It will unlock gross proved plus probable (2P)
reserves of around 150 mmboe (gross) and peak output of about 90 kboepd
(gross).

 

Importantly, as an area host, the Jotun FPSO will enable future growth
opportunities. Balder Phase V is being progressed, including the drilling of
six production wells to utilise the remaining subsea template well slots to
capture gross 2P reserves of over 30 mmboe. Drilling of these wells will
commence in the first half of 2025 and be completed in 2026.

 

In addition, the Balder Phase VI project is being matured, to add new subsea
facilities and wells, with an investment decision expected in the first half
of 2025. Var notes there remains significant resource upside in the area and
further exploration drilling and tie-back development phases are being
planned.

 

 

 Kistos Holdings plc                                 via Hawthorn Advisors

 Andrew Austin

 Panmure Liberum (NOMAD, Joint Broker)               Tel: 0207 886 2500

 James Sinclair-Ford / Dougie McLeod / Mark Murphy

 Berenberg (Joint Broker)                            Tel: 0203 207 7800

 Matthew Armitt / Ciaran Walsh

 Hawthorn Advisors (Public Relations Advisor)        Tel: 0203 745 4960

 Henry Lerwill / Simon Woods

 Camarco (Public Relations Advisor)                  Tel: 0203 757 4983

 Billy Clegg

 

Notes to editors

 

Kistos Holdings plc was established to acquire and manage companies in the
energy sector engaging in the energy transition trend. The Company has
undertaken a series of transactions including the acquisition of a portfolio
of highly cash generative natural gas production assets in the Netherlands
from Tulip Oil Netherlands B.V. in 2021. This was followed in July 2022, with
the acquisition of a 20% interest in the Greater Laggan Area (GLA) from
TotalEnergies, which includes four producing gas fields and a development
project. In May 2023, Kistos completed the acquisition of Mime Petroleum A.S.
adding 24 MMboe of 2P reserves and significant production. In April 2024,
Kistos completed the acquisition of UK gas storage assets, which due to the
fast cycle nature of the facility, can deliver up to 11% of the UK's flexible
daily gas capacity if called upon.

 

Kistos is a low-carbon intensity energy producer with Estimated Scope 1 CO(2)e
emissions from our operated activities offshore Netherlands of less than 0.01
kg/boe in 2023 (excluding necessary flaring during drilling campaigns).

 

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