REG - Kistos Holdings PLC - Trading Statement

Kistos HoldingsAnnouncement

08/01/2025 07:00

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RNS Number : 4851S  Kistos Holdings PLC  08 January 2025

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.

 

8 January 2025

 

 

 

Kistos Holdings plc

 

("Kistos" or "the Company")

 

 

Trading Statement

 

 

Kistos (LON: KIST), an independent energy company focused on generating value
across the upstream and midstream markets, provides a trading and operational
update ahead of its results for the year ended 31 December 2024.

 

Production and reserves

 

·    Proforma production for 2024 averaged 8,050 boepd, in line with FY24
guidance

·    Year-end net 2P reserves estimated to be 24.6 mmboe (Company
estimate)

·    FY25 production guidance set at 8,000 boepd - 9,000 boepd

 

Financial

 

As at the 31 December 2024:

 

·    Total cash of $144 million((1)), following receipt of $84 million in
tax rebates in December 2024  relating to the Company's Norwegian assets (the
anticipated receipt of which was noted in the Company's Interim Results)

·    Tax rebates receivables of approximately $65 million in respect of
investments in the 2024 calendar year payable in December 2025

·    Proforma net debt((2)) of approximately $45 million (including tax
rebates within the next year)

·    Undrawn cash facilities of a further $20 million in place

·    Hybrid Bond debt, contingent on operational milestones being met,
including the offload of 500,000 barrels (gross) of Balder crude oil from the
Jotun FPSO between the 31 December 2024 and 31 May 2025 has reduced to $30
million (originally $45 million)

·    Based on the timeline outlined by the operator, Kistos now expects
the start-up of Jotun to occur around mid-year and, therefore, as previously
announced on 21 August 2024 expects there will be no payments due under the
Hybrid Bond terms

 

(1) Includes $30 million of cash deposited in escrow as collateral against
Decommissioning Security Agreements and $2 million deposited in escrow against
Letters of Credit under gas storage capacity arrangements.

 

(2) Non-IFRS measure. Proforma net debt is a measure that management believe
is useful as it provides an indicator of the Group's overall liquidity. It
shows the impact to net debt as if the 2024 Norwegian tax rebate of
approximately $65 million had been received as at the 31 December 2024 and is
defined as unrestricted cash and cash equivalents less the fair value of
outstanding bond debt excluding the Hybrid Bond which, in management's view,
represents contingent consideration rather than bond debt due to the payment
triggers associated with it. This is a change in the presentation of net debt,
previously net debt was not shown on a proforma basis, excluding the impact of
the Norwegian tax rebate, and defined as unrestricted cash and cash
equivalents less the face value of outstanding bond debt excluding the Hybrid
Bond

 

Operational

 

·    The Jotun FPSO upgrades are nearing completion as per the operator's
announcements

·    Kistos holds 10% interest in the Balder Area

·    The operator (Vär Energi) estimates that the Balder Future project
will target gross production of 80 kboepd through the Jotun FPSO and gross 2P
reserves of 150 mmboe

·    Balder Phase V, targeting 2P reserves in excess of 30 mmboe, is
progressing with a six-well drilling campaign due to commence in the first
quarter of 2025, using the COSL Pioneer semi-submersible drilling rig

o  Completion of the drilling campaign is expected in 2026

·    On the wider Balder field, Phase VI and future 2C projects are
continuing to be matured to increase recovery from the prolific Balder field
with an investment decision for Phase VI expected in the first half of 2025

·    Having acquired the UK gas storage facility with working gas capacity
of 17.8 million therms, Kistos has already increased it to 22.1 million therms
(by 24%) and the Company has a road map to increase it to 35.0 million therms,
which is a further 62% increase by recommissioning

·    The economic evaluation to potentially take this project to a final
investment decision is ongoing

·    The anticipated change of operator in the Greater Laggan Area is
expected to take place in H1 2025, with the expectation the new operator will
provide additional momentum in sanctioning development projects to extract
near-term value from the area, such as Glendronach

 

Andrew Austin, Executive Chairman of Kistos, commented:

 

"Our production assets performed well throughout 2024, ensuring we achieved
production guidance and delivered strong cash flow. The receipt during
December 2024 of the 2023 tax rebate of $84 million relating to our Norwegian
assets further simplified and strengthened our balance sheet. We expect to
receive approximately $65 million of tax rebates in 2025 in respect of
investments made during 2024, which continues to demonstrate the strong
investment environment in Norway. With proforma net debt of approximately $45
million and strong access to liquidity, the Company remains well-placed to
fund existing developments and future growth opportunities.

 

As we enter 2025, a major milestone remains the further expansion of our
production profile in Norway, driven by first oil from the Balder Future
development. The next major development chapters in the area will also
commence this year, with Balder Phase V commencing drilling, whilst we
anticipate that Vär Energi will focus significant resources on maturing the
Phase VI and 2C opportunities which have been identified on the Balder area.
Coupled with planned exploration in the area, there remains material potential
to convert resources to reserves, thereby extending field life and improving
field economics.

 

Our portfolio continues to offer significant potential organic growth
opportunities, from new oil production in Norway, to gas developments in the
Greater Laggan Area and expansion of capacity at our UK gas storage facility.
Furthermore, given our robust cash position, the Board continues to assess
acquisition opportunities that offer value accretive expansion."

 

 

Dr Richard Benmore, Non-Executive Director of Kistos with a Bachelors, Masters
and PhD in Geosciences and who has been involved in the energy industry for
more than 37 years, has read and approved the disclosure in this announcement.

 

The Company's internal estimates of resources contained in this announcement
were prepared in accordance with the Petroleum Resource Management System
guidelines endorsed by the Society of Petroleum Engineers, World Petroleum
Congress, American Association of Petroleum Geologists and Society of
Petroleum Evaluation Engineers.

 

 

Glossary

 2C resources  those quantities of petroleum estimated, as of a given date, to be potentially
               recoverable from known accumulations by application of development projects,
               but which are not currently considered to be commercially recoverable owing to
               one or more contingencies.
 2P reserves   the sum of proved and probable reserves, denotes the best estimate scenario of
               reserves
 boe           barrels of oil equivalent
 boepd         barrels of oil equivalent per day
 FPSO          floating production, storage, and offloading vessel
 kboepd        thousand barrels of oil equivalent per day
 mmboe         millions of barrels of oil equivalent

 

 

- ENDS -

 

 

Contacts

 

 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

 

 

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