LONDON, UK: Kistos Holdings (LSE: KIST) has reached a conditional agreement to acquire all of the outstanding shares of Mime Petroleum A.S. from Mime Petroleum S.a.r.l.
On completion, the acquisition will add 24 MMboe of 2P reserves (operator estimate) plus 30 MMboe of 2C resources, increasing total Group reserves plus resources to approximately 80 MMboe.
The acquisition will also add over 2,000 boe/d of production immediately and help to boost Group output to in excess of 15,000 boe/d in 2025 once the Jotun FPSO is on production. Management estimates enlarged Group production in 2023 will be in the range of 8,500 and 10,500boe/d.
The consideration for the transaction is US$1 plus the issue of up to 6 million warrants exercisable into new Kistos ordinary shares at a price of 385p each, which represents a premium of 31.4% based on the last trading date prior to this announcement of 293 pence on 18 April 2023. 3.6 million of the warrants can be exercised between completion of the transaction and 18 April 2028. The balance will be exercisable from 1 June 2025 until 18 April 2028.
On 31 March 2023, Mime had cash of US$109MM and it is due to receive a tax refund of US$80 MM in December 2023. At completion, Mime will repay US$75MM of its debt and the enlarged Group will assume the remaining US$225MM. A payment to Mime’s bondholders of up to US$45MM in 2025 is contingent on certain operational milestones being achieved.
Mime Petroleum is headquartered in Oslo, Norway. It has an experienced management team and is focussed on development and production projects on the Norwegian Continental Shelf (NCS).
Mime Petroleum holds a 10% interest in the Balder joint venture (comprising the Balder and Ringhorne fields) and a 7.4% stake in the Ringhorne East unit, all operated by Var Energi A.S.A.
Andrew Austin, Kistos’ Executive Chairman, said: “After a period during which commodity price volatility and fiscal uncertainty has made it difficult to agree deals in the UK and the Netherlands, I am very pleased to be able to announce Kistos’ expansion into Norway.
Kistos Holdings has evaluated several transactions in the UK and Dutch sectors, but the imposition of punitive windfall taxes and a lack of fiscal certainty have meant that both countries remain difficult places to commit capital and ensure continuity of shareholder returns.”
“I expect Mime to be a platform for growth on the NCS and I believe Mime’s management team – whose strategy and goals are aligned with ours – can help us achieve that. Critically, as well as providing us with visibility on a rising production profile over the next few years, principally though it’s oil, the hydrocarbons produced at Balder will also enable us to maintain our industry-leading Scope 1 and Scope 2 CO2 emissions in the medium-term.”