Trading and Operational Update
 July 2021
("Kistos" or the "Company")
Trading and 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 provide a trading and operational update.
2021 first half highlights
§ On 20th May 2021, Kistos completed the acquisition of Tulip Oil Netherlands B.V. for €223MM (including the assumption of €87MM of debt). This deal included a 60% interest in and operatorship of the producing Q10-A gas field with 2P reserves of 32.9 MMboe.
§ In the first half of 2021, gross production from Q10-A averaged 1.35 MM Nm3/d. This is equivalent to 48 MMcf/d or 8.6 kboe/d.
§ After raising €150MM in the Nordic Bond market and approximately £100MM from equity investors since it was incorporated in October 2020, the Company remains well-funded. Cash balances at 30th June 2021 were €59.1MM.
2021 drilling campaign
§ Borr Drilling's Prospector-1 jack-up drilling is expected to arrive on location before the end of July and to remain on contract with Kistos for approximately four months. During that time, it will conduct a drilling campaign that is part of the process of converting approximately 100 MMboe (gross) of 2C resources into 2P reserves. Planned activities include:
· Appraisal of the Q11-B gas discovery, which is estimated to contain 2C resources of over 170 Bcf or 30.8 MMboe (gross). If this well meets expectations, it is anticipated to lead to Q11-B coming onstream before the end of 2023.
· Conduct a flow test of the Vlieland light oil discovery, which is located in a naturally fractured reservoir overlying the producing Q10-A field and is estimated to contain gross 2C resources of more than 70 MMbbl.
· Sidetrack the Q10-A-04 well, which is not currently onstream, to a new location in the Slochteren formation, which is the field's primary producing reservoir.
· Re-perforate the Q10-A-06 well to increase output.
§ The Company is pleased to announce the recent appointments of Peter Mann as Managing Director and Richard Slape as Chief Financial Officer.
§ It is anticipated that Interim CEO Andrew Austin will revert to his previous role of Executive Chairman before the end of 2021.
§ Kistos expects the Q10-A gas field to exit 2021 with gross production of more than 2.0 MM Nm3/d (71 MMcf/d or 12,700 boe/d).
§ Success with the forthcoming Vlieland oil test and / or the Q11-B appraisal well could result in a further significant uplift in production by the mid-2020s.
§ The Company continues to mature further opportunities within its existing portfolio, which is expected to lead to further drilling in the medium term
§ Kistos is continuing to evaluate a number of business development opportunities in the energy transition space, in line with its strategy.
Commenting, Andrew Austin, Kistos' Interim CEO, said:
"Kistos is well placed to generate substantial value for shareholders. We have a busy schedule in the second half of 2021, which we hope and expect will result in strong organic growth in our production from 2023 onwards. In the meantime, we will seek to deploy our balance sheet strength to make further acquisitions that meet our criteria. We look forward to reporting on further progress as the year unfolds".
c/o Camarco Tel: 0203 757 4983
Nick Lovering / Atholl Tweedie / Ailsa MacMaster
Tel: 0207 886 2500
Billy Clegg / James Crothers
Tel: 0203 757 4983
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. The Company has 19.5 mmboe of 2P reserves and an additional 102.1 mmboe of contingent resources.
Kistos is a low carbon intensity gas producer. The Q10-A gas field in the Dutch North Sea (60% operated working interest) has recorded a Scope 1 carbon emissions intensity of 13g CO2e/boe since inception. This compares to an industry average of 22kg CO2/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.
A conversion rate of 5.56 MMcf per boe has been used in this announcement.
Dr Richard Benmore, Interim Chairman 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.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (as it forms part of retained EU law as defined in the European Union (Withdrawal) Act 2018).
best estimate of contingent resources
the sum of proved and probable reserves, denotes the best estimate scenario of reserves
barrels of oil
billion cubic feet
barrels of oil equivalent
barrels of oil equivalent per day
billion standard cubic feet
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.
million barrels of oil
millions of barrels of oil equivalent
millions of cubic feet
millions of cubic feet per day
millions of normal cubic metre per day