Kistos (AIM: KIST ) unveiled that it has secured a £220m deal to acquire the Q10-A offshore gas field and a portfolio of other interests in other fields located in the Dutch North Sea.
The acquisition comprises a 60% controlling interest in the Q10-A offshore gas field and interests in a suite of offshore exploration and production licences in the Dutch North Sea.
The closed-ended investment company has agreed to acquire the Tulip Oil Netherlands BV (TON) subsidiary from Tulip Oil Holding which owns an operating interest in the Q10-A offshore gas field as well as interests in other fields in the Dutch North Sea, including the Q10-B, Q11-B and M10/M11 discoveries, and other exploration and appraisal projects.
Commenting on the newly acquired assets, Andrew Austin, Chairman of Kistos described them as “probably the lowest carbon footprint of any production assets in the North Sea”.
Kistos said the acquisition falls in line with its strategy to acquire assets with a role in the energy transition. The Q10-A field, which is reliant on solar and wind power, holds 2P reserves of 19.5 mmboe and generated total net production of 5.47 mboe/d in 2020.
Its carbon emissions from production operations were <10g C02e/boe1 in 2020 and 17g C02e/boe1 in 2019, which are ‘significantly below’ the North Sea average of 21 kg C02/boe.
Kistos highlighted its intentions to further develop the acquired assets by utilising wind and solar power. By doing this, the company hopes to establish itself as one of the lowest CO2/boe emitters of Scope 1 emissions from upstream operations in North West Europe.
Shares in Kistos have increased by over 55% in value since its admission to the AIM market back in November 2020. The stock was trading 1.13% lower this morning at 165.6p.
Kistos said the Q10-B, Q11-B and M10a/M11 discoveries potentially have in total 78.5 mmboe1 of 2C resources. The company detailed that each discovery has development plans prepared, and that these provide material growth opportunities for Kistos going forward.
TON, the Group which Kistos is acquiring, generated earnings of €30.6m in the year to 31 December 2020 (FY19: €36.27m) with pre-tax profit in the same period of €16.27m.
Kistos also announced its intention to carry out an equity placing while adding that it is working with debt advisors in Norway to explore the options for new debt instruments.
“To be producing gas, a vital transition fuel, from normally unmanned platforms powered by solar and wind is exactly what we set out to do,” said Austin, adding that there is potential for “significantly increased production” from discovered hydrocarbons from the acquired licences.
He added, “The team at Tulip have done a fantastic job to date in getting this low carbon production operation up and running and we are looking forward to working with them and our partners at EBN in replicating this success and being a model for future low impact developments."
Chairman Austin previously chaired oil and gas infrastructure firm, RockRose Energy, which was sold to Viaro Energy in a deal worth more than £247m back in July 2020 before making his return to the North Sea in November 2020 with Kistos, a new vehicle created to “acquire assets with a role in energy transition”, mainly focused in the UK and Continental Europe.
Upon its submission to AIM in November 2020, Kistos outlined its commitment to investors, stating that its focus remains “on the hydrocarbon sector, energy infrastructure and energy assets capable of repurposing in the context of Energy Transition and ‘Net Zero 2050’”.
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