Kistos, the low carbon intensity gas producer pursuing a strategy to acquire assets with a role in energy transition, is pleased to provide its interim results for the period to 30 June 2021.
The numbers referred to as "actual" in this announcement include the results of Kistos plc from incorporation on 14th October 2020 and the results of Kistos NL1 and Kistos NL2 from acquisition on 20 May 2021. The "pro forma" numbers include the results of Kistos plc from incorporation on 14th October 2020 and the results of Kistos NL1 and Kistos NL2 as if they had been part of the Group from 1st January 2021.
Following the incorporation and listing on AIM of Kistos plc in the final quarter of 2020, the Company completed the acquisition of Tulip Oil Netherlands B.V. and its wholly owned subsidiary Tulip Oil Netherlands Offshore B.V. (subsequently renamed Kistos NL1 B.V. and Kistos NL2 B.V. respectively) for €223MM (comprising €140MM plus an €87MM bond refinancing and other adjustments) in May 2021.
This acquisition brought 2P reserves of 19.7 MMboe plus 2C resources of 99.1 MMboe. The Q10-A gas field, which is operated by Kistos NL2 with a 60% working interest, produced at an average rate of 1.42 MM sm3/d (gross), equivalent to 48 MMcf/d or 8.6 kboe/d, in the six months to 30 June 2021.
Our scope 1 emissions of 0.09 kg CO2e/boe in 2020 are industry leading. Kistos expects that position to be maintained following the recent upgrade of wind turbines on the renewably powered Q10-A platform during the period.
Kistos remains well-funded after issuing €150MM of Nordic Bonds and raising over £100MM from equity investors since incorporation. Cash balances on 30 June 2021 were €59.1MM. Given this financial strength and in line with its strategy, the Group continues to evaluate several business development opportunities in the energy transition space.
Kistos is currently undertaking a work programme to enhance production at the Q10-A field and appraise the Q11-B gas discovery and the Vlieland light oil discovery. Borr Drilling's Prospector-1 jack-up drilling rig has been on location since mid-July and is expected to remain on contract with Kistos until the end of November.
As a result of this campaign, Kistos expects the Q10-A field to exit 2021 with gross production of more than 2.0MM sm3/d (71 MMcf/d or 12.7 kboe/d). The appraisal drilling is designed to start the process of converting approximately 100 MMboe (gross) of 2C resources into 2P reserves. If successful, it could lead to a further significant uplift in Kistos' production by the mid-2020s.
We were pleased to report earlier this month that the initial results of the appraisal of the Vlieland sandstone formation, which was the first stage of the drilling campaign, were highly encouraging. After encountering the target formation on prognosis at a depth of 1,562 metres TVDss, an 825 metres horizontal section was drilled by the Prospector-1. The Q10-A-04 A well was then flow tested for 5 days between 26th and 31 August 2021.
During this time, a maximum stable rate of 3,200 barrels of oil per day (bopd) was achieved. This was higher than anticipated and the oil is of good quality with an API of 33 degrees. The information obtained from the well, along with reservoir and surface samples taken during the flow test, will be analysed as Kistos prepares a field development plan for this project. Kistos has previously estimated 2C resources for this accumulation of over 70 MMbbl (gross). This estimate was independently audited by Sproule and will be refined following review of all the data.
"I am delighted to be able to report Kistos' maiden set of interim results covering the period from incorporation to 30 June 2021, which included approximately six weeks of production from the Q10-A field. I am also pleased to announce the successful integration of the two companies acquired from Tulip Oil Holdings into the wider Group.
After the success of the oil test from the Vlieland sandstone formation, we are looking forward to sharing further results of the current drilling campaign with stakeholders. In the meantime, the Company continues to mature further opportunities within its existing portfolio. This work is expected to lead to additional drilling in the medium term. We are also evaluating an active pipeline of business development opportunities.
On behalf of our shareholders, we are striving to build a first-class energy transition business. We have taken great strides in a short period of time, and we will continue to pursue rapid, disciplined growth both organically and through acquisitions." Richard Benmore, Interim Chairman