Kistos, an independent energy company focused on generating value across the upstream and midstream markets, has provided 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
- 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.'
Source: Kistos
