LONDON, UK: Kistos Plc (LSE: KIST) has entered into a conditional agreement with TotalEnergies S.E. to acquire a 20% interest in the Greater Laggan Area (GLA) producing gas fields and associated infrastructure alongside various interests in certain other exploration licences, including a 25% interest in the Benriach prospect.
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.
Details of the Acquisition:
· Kistos will acquire 20% working interests in the producing Laggan, Tormore, Edradour, and Glenlivet gas fields, located offshore the UK West of Shetland.
· In addition, the Acquisition includes a 20% interest in the undeveloped Glendronach gas field.
· The Acquisition also includes a 25% interest in block 206/4a, which contains the 638 Bcf (operator’s P50 resource estimate) Benriach prospect.
· Kistos expects production from the assets to be acquired to average approximately 6,000 boe/d (net) during 2022 with 2P reserves as at the effective date of the Acquisition of 6.2 MMboe (operator’s estimate).
· Emissions from GLA production operations are forecast by Kistos to be approximately 13 kg CO2e/boe in 2022, which is significantly below the North Sea average of 22 kg CO2e/boe (as estimated in the OGA’s “UKCS natural gas carbon footprint analysis” of 26th May 2020).
· The effective date of the Acquisition is 1st January 2022.
· The consideration payable in respect of the Acquisition comprises initial cash consideration of US$125 million (subject to customary closing adjustments), payable on completion, and further contingent cash payments as follows:
In the event the average day-ahead gas price at the National Balancing Point exceeds 150p/therm in 2022, up to US$40 million will be payable in January 2023.
Should Benriach be developed, Kistos will pay US$0.25 per MMBtu of net 2P reserves after first gas.
The company will finance the Acquisition from internal resources. Completion is expected to occur in the second quarter of 2022 subject to customary regulatory and partner consents and the Company expects to make a further announcement at such point.
Andrew Austin, Executive Chairman of Kistos, commented: “We are delighted to announce this transaction with TotalEnergies and look forward to working with them and the other partners in the Greater Laggan Area. The deal increases our gas production and complements Kistos’ strategy in the Netherlands.
“On completion, we will have a solid foothold in both the UK and the Netherlands from which we can continue to implement our growth strategy. We expect the acquisition to increase the Company’s 2P reserves by 6.2 MMboe and effectively double our end-2021 production rate to 13.5 kboe/d on a proforma basis.”
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