REG - Kistos Holdings PLC - Benriach & Operational Update

Kistos HoldingsAnnouncement

18/01/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230118:nRSR0385Na&default-theme=true

RNS Number : 0385N  Kistos Holdings PLC  18 January 2023

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).

 

18 January 2023

Kistos Holdings plc

("Kistos" or the "Company")

 

Benriach & Operational Update

Kistos (LSE: KIST), the low carbon intensity gas producer pursuing a strategy
to acquire assets with a role in energy transition, is pleased to update the
market on performance and operations.

Overview

·    Benriach well now sanctioned, and rig contract signed. Drilling to
commence in Q2 2023

·    Cash of €211MM as of 31/12/22

·    Gross debt reduced to €82MM (from €150MM) through repurchase of
€68MM of bonds in the market, resulting in net cash position of €129MM as
of 31/12/22

·    Pro-forma production for the full year to 31/12/22 was 10,700 boe/d
from the Greater Laggan Area (GLA) and Q10-A

·    2022 average realised gas price €93/MWh (~$175/boe)

·    Opex was ~20% below guidance at ~€5.50/MWh(~$10/boe)

Greater Laggan Area

·   The Benriach well, operated by our partner Total Energies, has been
confirmed to be drilled in 2023, starting in Q2. A contract has been signed
for a rig by the Joint Venture partners to carry out the drilling of this
well. This well is targeting recoverable resource of 638bcf (110MMBoe) gross
with Kistos holding a 25% stake. The well is forecasted to cost £16.3MM net
to Kistos (£2.4MM post tax).

·    Since Kistos completed the acquisition of a 20% working interest in
the GLA in July 2022, the asset has continued to perform well. On a pro forma
basis, average production for the year was 6,000 boe/d net to Kistos and
uptime was more than 95% (excluding planned maintenance).

·   The decision on Glendronach Field Development will now be taken later
in 2023 to allow further technical reviews to be undertaken with the aim of
reducing costs.

Q10-A

·    The Q10 area continues to enjoy good up time, and export through the
P15 platform has also been more reliable. Given the variable productivity of
the reservoir means that we will continue to intervene regularly to maximise
production.

·    A programme of side-tracks and stimulations is being implemented.

·    The Valaris 123 rig that arrived at the field in December 2022 is
undertaking a work programme that is due to complete during Q1 2023 and
includes the following:

o  Sidetrack of the A01 well in the Slochteren formation

o  Stimulation of the A04 well in the Clastics

o  Installation of velocity strings on A05 and A06 wells

·    Further clastics wells are being considered over the next 18 months

·    Following the successful drilling and flow testing of an appraisal
well in 2021, the Orion oil field development has moved from the concept
assess phase to the concept select phase. This development would not be
subject to the 'windfall tax' of Cijns due to it being oil not gas.

Outlook

·    Following the successful restructuring of the group under Kistos
Holdings plc, it is now in the position to look to utilise this structure for
more flexible financing and distributions, both options currently being
reviewed by the Board.

·    The scale and the manner of the tax changes in the Netherlands (Cjins
and EU Solidarity tax) and in the UK (Energy Profits Levy (EPL)), has made
investment decisions more challenging for the Board.

·    Kistos continues to evaluate potential acquisition opportunities the
changes have created.

·    The Company is actively evaluating opportunities outside of the UK
and Dutch jurisdictions.

Commenting, Andrew Austin, Kistos' Executive Chairman, said:

"Kistos has generated substantial value for shareholders through 2022 and will
strive to continue to do so, following what can only be described as a
turbulent year. The environment we have been investing in has significantly
changed through the implementation of EPL and Cijns. These aggressive tax
regimes that governments put in place are to the detriment of Europe's future
energy security. However, while they provide further challenges for the
independent oil and gas companies to generate shareholder value, this also
creates opportunities and Kistos is well placed to take advantage of these as
and when they arise.

Kistos expects to continue to invest in its existing asset portfolio to
maximise recovery at these high commodity prices and utilise the EPL
investment allowance where possible. While we continue to actively look for
value accretive acquisitions in the North Sea and Europe, the asymmetry
created by these tax regimes makes this challenging.

If we cannot identify worthwhile transactions to pursue, we will consider
returning cash to shareholders during this year."

 

Enquiries

 Kistos plc                                    via Hawthorn Advisors

 Andrew Austin

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

 John Prior / James Sinclair-Ford

 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 / Georgia Edmonds

 

Notes to editors

Kistos plc was established to acquire and manage companies in the energy
sector engaging in the energy transition trend. The Company has acquired Tulip
Oil Netherlands B.V., which has a portfolio of assets, including profitable,
highly cash generative natural gas production, plus appraisal and exploration
opportunities. In addition, Kistos acquired a 20% interest in the Greater
Laggan Area (GLA) from TotalEnergies in July 2022. The GLA includes four
producing gas fields and a development project.

Kistos is a low carbon intensity gas producer. The Q10-A gas field in the
Dutch North Sea (60% operated working interest) recorded an estimated Scope 1
carbon emissions intensity of 1g CO(2)e/boe in the first half of 2022. This
compares to an industry average of 22kg CO(2)/boe for gas extracted from the
UK continental shelf. The Q10-A normally unmanned installation is located
approximately 20 km from the Dutch shore. It is powered sustainably via wind
and solar power and is remotely operated, limiting offshore visits, which are
conducted by boat.

https://www.kistosplc.com (https://www.kistosplc.com)

 

ENDS

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDGPUBWGUPWGMM