Kistos proforma production, earnings tumble in first half

Gas and oil producer Kistos reported a 25% fall in total production in its first half on Thursday to 1,659,000 barrels of oil equivalent.

The AIM-traded company said its total production rate for the six months ended 30 June also dropped 25% to 9,200 barrels of oil equivalent per day.

Revenue experienced a significant reduction, falling 58% to €119.88m, while its average realised sales price was €74 per equivalent barrel, making for a sharp 47% decrease from the prior year.

Adjusted EBITDA tumbled 74% to €68.61m.

Despite the decline in those financial metrics, Kistos reported a robust cash position at the end of the half-year.

Its net cash and equivalents totalled €247m, with a net debt of €42m, primarily due to the assumption of Mime Petroleum's outstanding bonds.

Operationally, the board said the Mime Petroleum transaction boosted Kistos' reserves, making a significant mark on the Norwegian Continental Shelf.

The company faced a minor setback as the Benriach well turned out to be sub-commercial, although Kistos incurred only a minimal post-tax net cost of about €3m.

It said production at Ringhorne was reinstated in May after a brief halt due to a gas lift issue earlier in the year.

Kistos remained optimistic about meeting its full-year production guidance, which remained in the range of 8,500 to 10,500 equivalent barrels per day.

Looking ahead, Kistos celebrated a significant victory with the successful appeal to restore the M10a and M11 licences, extending them for another five years until August 2028.

The extension increased the group's total estimated reserves and resources by 41%.

It said it was keenly progressing towards completing the Orion oil field concept select phase and was set to execute the final investment decision in 2024.

There was an ongoing focus on enhancing production from existing wells, especially at Q10-A, and the company added that it was exploring infill drilling opportunities.

Lastly, the board said the upgrade of the Jotun FPSO remained a priority, with the operator setting its sights on starting Balder Future production by the end of 2024.

“We ended the half-year in a strong financial position,” said executive chairman Andrew Austin.

“Our focus on pursuing value-accretive opportunities to grow the business remains as sharp as ever.

“This was reflected by our entry into Norway in May, acquiring a highly experienced team with a clear path to medium-term growth, providing greater flexibility across three North Sea jurisdictions.”

Austin said the firm also successfully progressed organic opportunities within its portfolio, such as the upcoming Orion oil project in the Netherlands, where it was moving through the concept select phase, and Edradour West and Glendronach in the UK, where it was assessing development options using existing infrastructure to keep costs and the carbon footprint low.

“While the Benriach exploration well did not yield the desired result, it did allow for an extensive data acquisition programme, and we benefited from enhanced capital allowances under the terms of the UK government's EPL.

“The excellent operational and HSE performance of all contractors involved with this well was of particular importance, and I thank them again for their efforts in delivering a safe well ahead of schedule.

“Looking ahead, we will continue to pursue rapid, disciplined growth both organically and through acquisitions for the benefit of our shareholders.”

At 1242 BST, shares in Kistos Holdings were down 4.34% at 218.1p.

Reporting by Josh White for Sharecast.com.