Kistos reports progress on Benriach well

The AIM-traded firm said drilling was set to start in the second quarter.

It said it held cash of €211m (£184.66m) as at 31 December, while its gross debt reduced to €82m (from €150m) through the repurchase of €68m of bonds in the market, resulting in a net cash position of €129m at the end of 2022.

Pro-forma production for the full year totalled 10,700 barrels of oil equivalent per day from the Greater Laggan Area (GLA) and Q10-A, while the 2022 average realised gas price was €93 per MWh, or around $175 per barrel of oil equivalent.

Operational expenditure was around 20% below guidance, at €5.50 per MWh, or $10 per barrel of oil equivalent.

Looking ahead, the board said that following the successful restructuring of the group under Kistos Holdings, it was now in a position to use its structure for “more flexible” financing and distributions, with both options currently being reviewed.

The directors said the scale and the manner of tax changes in the Netherlands and in the UK had made investment decisions “more challenging”, adding that it was continuing to evaluate potential acquisition opportunities the changes had created.

Kistos said it was “actively evaluating” opportunities outside of the UK and Dutch jurisdictions.

“Kistos has generated substantial value for shareholders through 2022 and will strive to continue to do so, following what can only be described as a turbulent year,” said executive chairman Andrew Austin.

“The environment we have been investing in has significantly changed through the implementation of [the] EPL and Cijns [taxes].

“These aggressive tax regimes that governments put in place are to the detriment of Europe's future energy security.”

However, Austin said that while they provided further challenges for the independent oil and gas companies to generate shareholder value, it also created opportunities, with Kistos “well placed” to take advantage of those as and when they arose.

“Kistos expects to continue to invest in its existing asset portfolio to maximise recovery at these high commodity prices and utilise the EPL investment allowance where possible.

“While we continue to actively look for value accretive acquisitions in the North Sea and Europe, the asymmetry created by these tax regimes makes this challenging.

“If we cannot identify worthwhile transactions to pursue, we will consider returning cash to shareholders during this year.”

At 1323 GMT, shares in Kistos Holdings were down 5.05% at 374.1p.

Reporting by Josh White for Sharecast.com.