Kistos, an independent energy company focused on unlocking value within its existing portfolio and through value-accretive M&A, has provided an unaudited trading and operational update ahead of its results for the year ended 31 December 2025.
Value accretive M&A activities
- Kistos entered into a binding agreement to acquire a 5% working interest in Block 9 (Occidental as operator) and a 20% working interest in Blocks 3 & 4 (CCED as operator) in Oman from Mitsui E&P Middle East B.V. (the 'Oman Acquisition'), with an effective date of 1 January 2025 (the 'Effective Date'), as announced on 9 December 2025. Completion of the Oman Acquisition is subject to customary governmental and regulatory approvals and partner consents. Further announcements will be provided in due course, upon completion of the Acquisition, including any information on completion mechanics and the financial impact of the transaction on the Company.
- Expected to add 25.6 mmboe (operator estimates) of 2P reserves net to Kistos as at the Effective Date, with a valuation of approximately $5.80/boe of 2P reserves.
Production and reserves
- 2025 proforma(1) exit production rate was 22,700 boepd, including Oman interests and augmented by the ramp-up of two of the six Balder Phase V wells
- Actual production for 2025 averaged 9,000 boepd at the top end of guidance (8,000 - 9,000 boepd)
- Year-end proforma net 2P reserves estimated to be 49 mmboe (Company estimate)
- FY26 proforma production guidance remains at 19,000 boepd - 21,000 boepd
Financial
As at 31 December 2025:
- Cash, including near-cash, of $199 million (2), following receipt of $75 million in tax rebates in December 2025 relating to the Company's Norwegian assets (the anticipated receipt, attributable to activity in 2024, which was noted in the Company's Interim Results)
- Tax rebates receivable of approximately $28 million in respect of net expenditure in Norway during the 2025 calendar year payable in December 2026
- Adjusted net debt(3) of approximately $81 million (representing cash and near-cash equivalents, net of the carrying amount of outstanding bond debt of $280 million)
(1) Proforma figures include production from the Oman Acquisition. The acquisition is expected to complete in the first quarter of 2026.
(2) Non-IFRS measure. Includes $28 million of near-cash, assuming receipt of the 2025 Norwegian tax rebate as at 31 December 2025. A further $22 million is maintained in escrow for standard credit and decommissioning arrangements.
(3) Non-IFRS measure. Adjusted net debt is a measure that the management team believes is useful as it provides an indicator of the Group's overall liquidity. It shows the impact on net debt as if the 2025 Norwegian tax rebate of approximately $28 million had been received as at 31 December 2025 and is defined as cash and cash equivalents, including restricted cash, less the carrying amount of outstanding bond debt.
Operational
- Following the start-up of the Jotun FPSO in Norway and ramp-up of the 14 Balder Future wells, total Balder area production exceeded 11,000 boepd (net) in September.
- A Final Investment Decision (FID) on Balder Phase VI was taken in 2025 to develop circa 1.5 mmboe (net), which will be drilled in 2026.
- The first phase of the Balder Next project has now been sanctioned and consists of the debottlenecking at Jotun FPSO to increase production capacity in addition to the drilling of new production wells targeting additional reserves of approximately 3.6 mmboe (net). The subsequent phase will include the decommissioning of the Balder FPU in 2028, with preparation work starting in 2026, which will significantly reduce the operating costs of delivering hydrocarbons from the Balder area.
- Serica Energy is anticipated to assume operatorship of the Greater Laggan Area from TotalEnergies in the first quarter of 2026. This change offers significant organic growth potential and opportunities to extract near-term value from infill drilling and the development of further third-party tie-backs to the Shetland Gas Plant.
- Uptime substantially improved on Q10-A asset in the Netherlands in H2 2025, with production efficiency at circa 97%, following an unplanned extended outage at the Taqa-operated P15 tieback facility, which significantly impacted our ability to deliver gas into the network.
- Work has commenced on returning the Hole House gas storage facility to service following a FID in September. This will increase our gas storage capacity by 63% during the course of the next two years.
Andrew Austin, Executive Chairman of Kistos, commented:
'Kistos again delivered growth in 2025. We successfully executed on all four of our stated priorities: achieving Balder Future first oil, meeting the higher end of our full-year production guidance (8,000-9,000 boepd), continuing to convert 2C resources to 2P reserves, and executing a value-accretive M&A transaction while continuing to invest in our existing asset base.
The agreement to acquire interests in Block 9 and Blocks 3 & 4 in Oman represents a material step for Kistos. This acquisition geographically diversifies our portfolio beyond the North Sea and provides exposure to high-quality onshore assets with significant growth potential. Completion is expected in the first quarter of 2026, and we are well advanced in preparation for the integration of these world-class assets into our portfolio.
Operationally, the successful start-up of the Jotun FPSO and Balder Future wells drove Balder area production above 11,000 boepd (net) in September, whilst the ramp-up in late December of the first two of six planned Balder Phase V wells means we can look forward to maintaining high production rates going forward. We also sanctioned Balder Phase VI and the first phase of Balder Next, which will enhance capacity, reduce operating costs, and add meaningful reserves.
In the UK, the anticipated transition of operatorship of the Greater Laggan Area in early 2026 offers near-term opportunities for infill drilling and tie-backs, and we commenced work to return the Hole House gas storage site to active service, increasing capacity by 63% over the next two years.
In the Netherlands, uptime at Q10-A improved to ~97% in the second half following earlier challenges with the third-party tieback facility.
Financially, Kistos remains robust. Year-end cash, including near-cash, stood at $199 million, including Norwegian tax rebates, while adjusted net debt was approximately $81 million. Our balance sheet strength is underpinned by our ability to fund further growth opportunities, maintain flexibility, and continue to enhance shareholder value.
Looking ahead, our priorities for 2026 are clear:
- Complete and integrate the Oman acquisition;
- Work with our partner Vår Energi to deliver the next phases of the Balder Area development;
- Unlock organic growth in the Greater Laggan Area; and
- Enhance our UK gas storage assets, which are material to the country's energy security.
We continue to focus on further near-term value accretive M&A opportunities in both the North Sea and MENA regions that enhance the group and shareholder value.'
Source: Kistos Energy
