WTI (Nov)* $62.28+39c, Brent (Nov) $66.57 -11c, Diff -$4.29 +29c*
USNG (Oct) $2.81 -8c, UKNG (Oct) 79.79p -0.11p, TTF (Oct) €32.0 -€0.325
*Denotes expiry of October WTI contract

Oil price

The oil price has been flat for some time now so the fact that Reuters ran with the story this morning that a preliminary agreement has been reached between the Iraq and Kurdistan Governments and resume production of c. 230/- b/d might have knocked the price.

As I write, both WTI and Brent are up around a dollar…the only thing I can think might push the price up is that Hurricane Gabrielle is worsening and last night was a Cat 4 Hurricane. 

Kistos

Kistos has provided its interim results for the period to 30 June 2025.

The first half of 2025 has been a period of significant and transformational investment for Kistos. The Company has delivered on its commitment to achieve first oil from the Balder FPSO in June, successfully meeting the key operational milestone set out at the start of the year. As such, the Group remains firmly on track to meet its full-year production guidance of 8,000 – 9,000 boepd.

The hybrid bond structure, designed from the outset to protect Kistos against delays in the commissioning of the FPSO, has proved highly effective, ensuring that financial outcomes were directly aligned with project delivery. These achievements represent a pivotal shift, positioning the Group for substantial increases in Revenue, EBITDA, and Cash Flow in the periods ahead.

In September 2025, the Group reached a Final Investment Decision to proceed with the Hole House gas storage project. Supported by third-party financing on attractive terms, the recommissioning will increase working capacity by 63% and further strengthen the UK’s energy resilience and flexibility.

Norway Operations

• Net production for H1 2025: 2,800 boepd (H1 2024: 2,800 boepd).
• A Final Investment Decision was taken on Balder Phase VI to develop around 1.5 mmboe (net).
• Production efficiency at Balder FPU and Ringhorne Platform: 91% (versus planned: 86%).
• Jotun FPSO departed Rosenberg-Worley yard in March, achieved first oil in June, and started up the first of 14 Balder Future wells in July.
• Ramp-up of Balder Future wells was concluded in September 2025, with peak production of approximately 9,000 boepd (net) and total area production exceeding 11,000 boepd (net).
• COSL Pioneer rig began drilling six wells for Balder Phase V, targeting 3.0 mmboe (net). First multi-lateral well completed by end of June with First Oil expected in Q4 2025. Two new wells were also drilled from the Ringhorne platform.

UK Operations

• Net production from Greater Laggan Area: 2,500 boepd (H1 2024: 3,400 boepd), in line with expectations.
• Victory first gas remains on schedule by end-2025, and increased throughput at the Shetland Gas Plant is expected to deliver significant OPEX savings for the Greater Laggan Area partners.
• At the Hole House gas storage site, a Final Investment Decision was taken in September 2025 to proceed with recommissioning, underpinned by favourable economics and third-party financing secured on attractive terms. This decision will increase working capacity by 63%.

Netherlands Operations

• Q10-A production was significantly lower during the period, 900 boepd lower than in H1 2024 (2,200 boepd).
• Aside from natural decline, a planned shutdown of the TAQA-operated P15-D platform overran for longer than expected (98 vs 35 days planned), although this will be partially offset by flush production post start-up in H2.

Corporate & Financial

• Capital investment of $70 million in Balder Future and Balder Phase V, unlocking a high-value asset for the Company with low unit cost ~$5/boe.
• TotalEnergies’ planned sale of its remaining 40% stake in West of Shetlands assets to Prax Upstream Limited did not complete due to Prax’s parent company entering administration; assets remain with TotalEnergies.
• Total cash at period end: $104 million, including restricted funds of $20 million.
• Adjusted net debt at period end: $86 million (30 June 2024: $89 million). See notes to the accounts for further details.
• Hybrid bonds linked to Jotun FPSO milestones were cancelled for nil consideration; some bondholders exercised rights to acquire Kistos warrants (exercisable at a price of 385 pence per share).

6 months ended 30 June 2025

1. Total production rate includes gas, oil and natural gas liquids and is rounded to the nearest 100 barrels of oil equivalent per day. Sales and production volumes are converted to estimated barrels of oil equivalent (boe) using the conversion factors in the Appendix to the Interim Financial Statements.
2. Non-IFRS measure. See note 2.2.1 to the Interim Financial Statements for definition and reconciliation to the nearest equivalent IFRS measure. 

Andrew Austin, Executive Chairman of Kistos, commented:
“The Group is on track to meet our full-year production guidance of 8,000-9,000 boepd whilst upholding strong operational performance and unlocking the full potential of our existing asset base to deliver long-term value for shareholders.

The completion of Balder Future marks a pivotal event for Kistos. It diversifies our production profile and rebalances our hydrocarbon mix, while also releasing capital to support growth across other areas of the business. Progress in Norway remains strong, with Balder Phase V achieving successful completion of its first well and the positive investment decision on Balder Phase VI both occurring during the first half of the year.

In the UK, we look forward to the start-up of the Victory field. This development is anticipated to realise significant operating expenditure savings for the GLA partners as throughput at the Shetland Gas Plant will increase substantially. I am also pleased to confirm that the Group has taken a Final Investment Decision to proceed with the Hole House gas storage project. This milestone, supported by third-party financing on attractive terms, reflects our commitment to enhancing the UK’s energy resilience and flexibility.

Kistos remains focused on disciplined execution, operational excellence, and continues to seek out organic and inorganic growth opportunities. We are committed to ensuring that any transaction we undertake, either in or outside of the North Sea, offers meaningful near-term value creation for shareholders, underpinned by a prudent risk profile. As we continue to evaluate opportunities across the value chain, we remain centred on maintaining financial strength and operational reliability.”

As I wrote recently when the Jotun FPSO came onstream, Kistos now has a solid full-year production guidance of 8,000-9,000 boepd whilst upholding strong operational performance and whilst unlocking the existing asset base give the ability to ‘deliver long term value for shareholders’. Balder also has significant potential both at Balder phase V and VI.

I also talked about the Victory field which is expected to reduce operating expenditure savings for the GLA partners as throughput at the Shetland gas plant will increase ‘substantially’. But what I am most excited about today is that Kistos has taken the FID to proceed with the Hole House gas storage project. ‘this milestone, supported by third-party financing on attractive terms, reflects our commitment to enhancing the UK’s energy resilience and flexibility’.

Finally another point that I made last time was just how financially strong Kistos is, and with significant FCF powering up a strong balance sheet we find the company well funded, growing revenue and cash reserves and in a really good position for the future. Kistos is a valued member of the Bucket List and whilst is up 36% over both 6 and 12 months but in my view has a significant upwards move in it based on recent announcements.

Pharos Energy

Pharos has announced that it has received approval from the Executive Board of the Egyptian General Petroleum Corporation (“EGPC”) for the consolidation of the El Fayum (“EF”) and North Beni Suef (“NBS”) Concession Agreements into a new consolidated concession agreement (the “Consolidated Concession”). Pharos will retain a 45% working interest in the Consolidated Concession, with IPR Lake Qarun Company (“IPR”) continuing as operator with a 55% working interest. In addition to the 12 development leases of the EF and NBS concessions, the Consolidated Concession will include three new exploration areas.

Katherine Roe, Chief Executive Officer, commented:
“The approval by EGPC’s Executive Board of the new Consolidated Concession is a significant milestone for our Egyptian business. The improved fiscal terms have the potential to unlock long-term value for all stakeholders and drive organic growth opportunities across the concession areas. I would like to thank IPR’s and Pharos’s in-country teams for their tenacity and diligence in concluding negotiations, and the Egyptian authorities for their positive engagement throughout the process. We look forward to planning the start of our drilling campaign to increase production.”

This is very good news for Pharos and whilst not entirely unexpected has come as a very welcome surprise as it adds significant value to the company. By consolidating the El Fayum and North Beni concessions into one agreement, with Pharos holding a 45% WI they gain and with the consolidated Concession including three new exploration areas there is built in upside for the partners.

Also providing the upside are the improved fiscal terms offered which ‘have the potential to unlock long-term value and drive organic growth opportunities across the concession areas’. Also if I read it correctly there can be an increase in booked reserves of some 25% by moving 3.1 MMstb of contingent resources to 2P reserves in the process. 

As I said there is a lot to like about this deal, at a stroke the company has upped its reserves, has created built in exploration upside and consolidated its Egyptian asset base. The shares have had a good run, up by a near quarter over six months and this should consolidate that growth. Back tomorrow…

The Consolidated Concession will unlock significant value in the Western Desert by improving certain fiscal terms, extending the duration of the licenses, and committing the Contractor parties (Pharos Group and IPR) to additional work programmes to deliver production growth. Based on Pharos’ Competent Person’s Reports (“CPR”) as at 31 December 2024, the Consolidated Concession could result in moving 3.1 MMstb from contingent resources to 2P reserves, or a 25% increase from year-end 2024, net to Pharos working interest.

The Consolidated Concession is subject to customary approvals and to Egyptian Parliamentary ratification, which is expected to take place in late 2025 or early 2026, but the new set of terms will start imminently.

The improved terms of the Consolidated Concession reset our investment into the assets in order to unlock further value.

Highlights of the new Consolidated Concession:

• The 12 development leases currently under the EF and NBS concessions have an extended term of up to 20 years, comprising an initial 15-year term, plus one five-year extension subject to Minister’s approval
• A commitment to an 11-well work programme (8 development wells, 2 exploration wells, and 1 water injector) to be drilled during the four-year period that commences imminently
• The award of three exploration areas under the Consolidated Concession, namely, West Silah, Beba, and South Wadi El Rayan
• New development leases awarded from the three exploration areas will have up to a 30-year term through an initial 20-year period, plus two five-year extensions each subject to Minister’s approval
• Improved fiscal terms to promote increased production through investment, including an increase in Cost Oil to 40%, a Profit Oil share of 27-29% (in the key production and oil price tiers) (as opposed to 18-22.5% currently) and an Excess Cost Recovery share of 15%
• In addition to committing to the 11-well investment programme, the Company has agreed to waive 30% of the carry forward cost pool
• Post-ratification, the Company and IPR will pay EGPC a signature bonus of $3.5m (with the Company’s share of the bonus expected to be offset against its receivables balance), with other customary bonuses also applying (including at agreed production rate levels and extension milestones)

 Genel Energy

Genel notes recent statements and media reports that suggest agreements have been reached between the Federal Government of Iraq, the Kurdistan Regional Government and a group of international oil companies to resume the export of oil by pipeline from Kurdistan to Ceyhan.

The Company welcomes the significant progress made to date by all parties in seeking to resume exports from Kurdistan and believes that straightforward adjustments to currently proposed terms, and a payment plan for overdue receivables, would make the conditions for exports acceptable to the Company.

In an effort to resume exports as quickly as possible, the Company continues to work with peers and relevant governments to achieve the appropriate conditions.

The Company refers to the public statement made by DNO, the Operator of the Tawke PSC.

So at long last it looks like the Iraqi-Turkey pipeline may be about to reopen as per my headline above. I’m not pre-judging anything until we get something more certain but its good news in the absence of a firm agreement. Of course if a deal was to be agreed with the appropriate terms then everything changes, the market has yet to react.

DNO release – Oslo, 23 September 2025:

Possible Participation in Resumption of Exports Through the Iraq-Türkiye Pipeline

Oslo, 23 September 2025 – DNO ASA, the Norwegian oil and gas operator, today announced that it welcomes the reports that agreements have been reached between the Federal Government of Iraq, the Kurdistan Regional Government and a group of international oil companies to resume exports of crude oil produced in Kurdistan through the Iraq-Türkiye Pipeline.

DNO has consistently stated that it is eager to resume exports but pursuant to agreements that ensure payment surety for both past arrears and future exports based on the legal, economic and commercial terms of the production sharing contracts the Company holds with Kurdistan.

“DNO’s exposure is different than that of other international oil companies” said Executive Chairman Bijan Mossavar-Rahmani. “Importantly, as the largest producer, the arrears owed to us by the KRG dwarf those of many of the others,” he said, “which also means that our exposure to future payment risk is also substantially higher than any other company.” Mr. Mossavar-Rahmani added that DNO has made proposals to Erbil to address this matter through, in his words, “easy fixes that can be quickly agreed.”

DNO and its joint venture partner Genel Energy International Limited have stepped up spending towards repairs to the damage to the Tawke and Peshkabir fields following drone attacks in July 2025. Further investments are planned to drill eight wells in the Tawke license in 2026 targeting gross operated production of up to 100,000 barrels a day.

Currently, DNO’s net entitlement share of oil is sold on a cash and carry basis and transported by traders by road tanker to local refineries at a per barrel price in the low USD 30s.

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