WTI (May) $60.07 -$2.28, Brent (June) $63.33 -$2.15, Diff -$3.26 +13c
USNG (May) $3.56 -26c, UKNG (May) 82.3p -5.6p, TTF (May) €33.79 -€1.56

Oil price

Oil has rallied today but will still be down on the week and what a week it has been too. Nothing much I can add as today it looks like a straight fight between the USA and China.

Kistos

Kistos has provided its audited full-year results for the year ended 31 December 2024. A copy of the Company’s full audited annual report and accounts will be made available shortly on the Company’s website at www.kistosplc.com.

2024 Highlights

Operational highlights

• Significant progress has been made towards completing the Balder Future project, with the Jotun FPSO sail away successfully achieved after the reporting period
• Acquired EDF Energy’s gas storage assets, onshore UK, and successfully undertook the fifth and final phase of a ‘soft cycling’ trial, resulting in a 24% uplift in working gas capacity

Production, reserves and resources

• Average daily production of 8,050 boepd, in line with guidance, supported by higher-than-expected well performance at GLA
• Year-end 2P reserves of 24.4 mmboe and estimated 2C contingent resources of 57.5 mmboe
• Hill Top achieved 93.5% operational availability, injecting 112 million therms and withdrawing 97 million therms during the period after completion
• Initial hedges, with injections in July 2024 and withdrawals in Q1 2025, were placed at an average of 23.5 pence per therm

Financial highlights

• Adjusted EBITDA of $95 million(3) (FY23: $130 million)
• Capital expenditure on a cash basis was $144 million (FY23: $129 million), representing the ongoing investment in the Balder Future project
• Tax rebates receivables of approximately NOK 746 million ($65 million) in respect of investments in the 2024 calendar year payable in December 2025
• Statutory loss after tax of $52 million (2023: $27 million loss) resulting from both a $34 million impairment charge and a $26 million non-cash NOK functional currency exchange loss that has now reversed
• Cash balances on 31 December 2024 of $114 million, excluding $29 million of funds which are restricted (31 December 2023: $215 million and $0.2 million of restricted funds)
• Adjusted net debt(2) on 31 December 2024 of $52 million (31 December 2023: net cash $62 million)
• Carrying value of Hybrid Bond debt has fallen to $0.7 million (FY23: $15.7 million), based on the likelihood of operational milestones being met, including offload of 500,000 barrels of oil (gross) from the Jotun FPSO between 31 December 2024 and 31 May 2025

2025 Outlook

• FY25 production guidance reiterated at 8,000 boepd – 9,000 boepd
• Hook-up and final commissioning of the Jotun FPSO, with first oil targeted by the end of Q2 2025
• Production from Balder Future wells expected to start up shortly after, and following a period of ramp-up (expected in the second half of 2025) could increase area production to a peak of 110,000 boepd (gross)
• The drilling of the six Balder Phase V wells is ongoing with the COSL Pioneer rig, utilising the remaining well slots installed during the Balder Future project. The first of these wells are anticipated to flow before the year end, and will also utilise the Jotun FPSO
• Progressing further development and exploration projects across the Balder Area with a view to converting 2C resources to 2P reserves in the short to medium-term
• Change of GLA operator expected in H1 2025 to provide renewed commercial momentum to sanction near-term development projects
• Victory gas field expected to come on stream in Q4 2025, where production will be processed through the onshore Shetland Gas Plant (“SGP”)
• FEED study is ongoing at the Hole House gas storage facility, with a view to taking FID to increase total working gas capacity up to approximately 40 million therms from the current 22.1 million therms
• Exploring value-accretive M&A, with several identified opportunities currently under evaluation

Andrew Austin, Executive Chairman of Kistos, commented:
“Strong production across the portfolio, particularly from the GLA, has ensured we met production guidance for the year, despite delays to the Balder Future project. In our pursuit of growth, we have added diversity to our portfolio with the addition of the Hill Top and Hole House gas storage facilities in Cheshire, expanding our midstream market position and diversifying our revenue.

2025 is an exciting year for Kistos. The Balder Future project in Norway once onstream, will significantly increase Group production and cashflow while also increasing the ratio of oil in our portfolio. The completion of the Balder Future project unlocks the Balder Phase V wells, and will spur further development opportunities in the area as we look to convert 2C contingent resources to 2P reserves with further infill drilling and exploration, thereby extending the life of the Balder Area to 2045 and beyond.

Beyond our existing operations, we remain committed to exploring growth opportunities that will drive substantial returns for our investors. As well as assessing opportunities in familiar territories, we are also considering new geographies which could offer near-term value accretion.”

This is a solid set of results, production is in line with guidance which for the time being is maintained for 2025 at 8,000-9,000 boepd and 2P reserves of 24.4m and 2C resources of 57.5m offer plenty of upside. But it is the future that is exciting for shareholders, as Chairman Andrew Austin states and that can be primarily down to the Balder Future project in Norway which is about to deliver first oil. 

But it’s not just Balder that is showing growth going forward, there is upside potential from both Glendronach following the change of GLA operator and the Victory gas field which is expected to come on stream in Q4 2025, where production will be processed through the onshore Shetland Gas Plant.

Also the gas storage facilities have benefited from the addition of the Hill Top and Hole House operations in Cheshire, the former achieving a 93.5% operational availability injecting 112m therms and withdrawing 97m during the period after completion. This adds to the portfolio via ‘expanding our midstream market position and diversifying our revenue. 

Kistos had cash of $114m at the year end, excluding $29m of restricted funds and adjusted net debt at the same date was $52m, this strong position getting better all the time and these market conditions must be creating opportunities that Kistos excels in, it remains nailed on in the Bucket List. 

Cash balances on 31 December 2024 of $114 million, excluding $29 million of funds which are restricted (31 December 2023: $215 million and $0.2 million of restricted funds)

·     Adjusted net debt2 on 31 December 2024 of $52 million (31 December 2023: net cash $62 million)

12 months ended 31 December 2024

Sintana Energy

Earlier in the week I spoke to Robert Bose of Sintana Energy. Robert is also Principal and Managing Member of Charlestown Energy Partners and a Non Executive Director of Challenger Energy Group. We discuss Sintana’s interest in exploring conjugate margins in Namibia, Uruguay and also Corcel in onshore Angola.

Here is the link to the interview which I published yesterday but in case people didn’t catch it.

Core Finance CEO Interview: Robert Bose of Sintana Energy

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog