TIDMKIST
RNS Number : 6690W
Kistos Holdings PLC
19 April 2023
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK
LAW PURSUANT TO THE MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS (SI
2019/310) (UK MAR). UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS
INSIDE INFORMATION (AS DEFINED IN UK MAR) IS NOW CONSIDERED TO BE
IN THE PUBLIC DOMAIN.
19 April 2023
Kistos Holdings plc
(Kistos or the Company and, together with its subsidiaries, the
Group)
Agreement to Acquire Mime Petroleum A.S.
Transaction marks entrance into the Norwegian Continental
Shelf
Kistos (LSE: KIST), the low carbon intensity hydrocarbon
producer pursuing a strategy to acquire assets with a role in
energy transition, is pleased to announce that it has reached a
conditional agreement to acquire all of the outstanding shares of
Mime Petroleum A.S. ("Mime") from Mime Petroleum S.a.r.l. (the
"Vendor").
On completion, the acquisition will add 24 MMboe of 2P reserves
(operator estimate) plus 30 MMboe of 2C resources, increasing total
Group reserves plus resources to approximately 80 MMboe. The
acquisition will also add over 2,000 boe/d of production
immediately and help to boost Group output to in excess of 15,000
boe/d in 2025 once the Jotun FPSO is on production. Management
estimates enlarged Group production in 2023 will be in the range of
8,500 and 10,500boe/d.
Transaction terms
-- Through its wholly owned subsidiary Kistos plc, Kistos has
conditionally agreed to acquire 100% of the issued and to be issued
share capital of Mime from the Vendor.
-- The consideration for the transaction is US$1 plus the issue
of up to 6 million warrants exercisable into new Kistos ordinary
shares at a price of 385p each, which represents a premium of 31.4%
based on the last trading date prior to this announcement of 293
pence on 18 April 2023. 3.6 million of the warrants can be
exercised between completion of the transaction and 18 April 2028.
The balance will be exercisable from 1 June 2025 until 18 April
2028.
-- On 31 March 2023, Mime had cash of US$109MM and it is due to
receive a tax refund of US$80 MM in December 2023. At completion,
Mime will repay US$75MM of its debt and the enlarged Group will
assume the remaining US$225MM. A payment to Mime's bondholders of
up to US$45MM in 2025 is contingent on certain operational
milestones being achieved.
B alance sheet impact of acquisition US$MM*
terms
Mime cash at bank (31(st) March 2023) 109
Tax refund due (December 2023) 80
Payment to Bondholders (at completion) (75)
Debt retained by the enlarged Group (at
completion) (225)
Adjusted total (111)
Contingent amount (maximum payable in
2025) (45)
----------------------------------------- -------
* Assumes an exchange rate of NOK10.5 : US$1
-- Completion of the transaction is conditional on receiving customary regulatory approvals.
Overview of Mime
-- Mime is headquartered in Oslo, Norway. It has an experienced
management team and is focussed on development and production
projects on the Norwegian Continental Shelf (NCS).
-- Mime holds a 10% interest in the Balder joint venture
(comprising the Balder and Ringhorne fields) and a 7.4% stake in
the Ringhorne East unit, all operated by Var Energi A.S.A.
-- Based on operator estimates, 2P reserves at Balder and
Ringhorne were 23.6 MMboe net to Mime at the end of 2022. In
addition, Kistos estimates Mime has net 2C resources of 29.8 MMboe,
largely comprised of additional upside in Balder and Ringhorne plus
the 2021 King oil discovery. Including Mime, total Group resources
will be approximately 80 MMboe.
-- Mime's share of production from Balder and Ringhorne is
expected to be over 2,000 boe/d in 2023. This will increase
significantly once the Balder X project is onstream, with
production for the enlarged Group expected to be over 15,000 boe/d
in 2025 once the Jotun FPSO is onstream.
-- Balder X comprises the Balder Future and Ringhorne Phase IV
drilling projects and is designed to extend the life of the Balder
Hub. It includes upgrading the Jotun FPSO, which is more than 70%
complete and is forecast by the operator to sail away in the first
half of 2024.
-- Kistos expects Mime's capital expenditure in 2023 to be up to
US$130MM. Tax relief is available on this expenditure at a rate of
78% and is expected to result in a further significant tax refund
in December 2024.
-- Scope 1 and Scope 2 CO(2) emissions from the Balder Hub are
expected to fall by more than 50% to approximately 7.5kg per boe
once Balder X is onstream. This is well below both the global and
the North Sea average.
Financial position of the enlarged Group
-- On 31 March 2023, Mime had cash at bank of US$109MM. Kistos
cash at bank on the same date was EUR262MM and net cash (being cash
less face value of debt) was EUR181MM. In 2022, Mime Petroleum made
an unaudited pre-tax loss of US$103MM including an impairment
charge of US$71MM.
-- In addition to its cash balances, Mime is due to receive a
tax refund of US$80MM in December 2023, which relates to capital
expenditure incurred in 2022.
-- Pursuant to an agreement with the holders of Mime's Nordic
Bonds, at completion Mime will repay US$75MM of outstanding bonds
and will owe the following amounts:
o US$120MM of Super Senior bonds, which will attract interest of
9.75% per annum, 4.50% of which is payable in cash and 5.25% of
which is payable-in-kind in the form of additional Super Senior
bonds. The maturity date of the Super Senior bonds is 17 September
2026.
o US$105MM of so-called "MIME02" bonds, which will attract an
interest rate of 10.25% payable-in-kind. The maturity date of the
MIME02 bonds is 10 November 2027.
-- The Mime debt being retained by Kistos or retired by Mime,
less Mime's cash balances at 31 March 2023 and less the tax refund
due in December 2023, equates to approximately US$111MM.
-- A contingent payment of US$45MM will be made to the MIME02
bondholders in the event 500,000 bbl (gross) have been offloaded
and sold from the Jotun FPSO by 31 December 2024. This will decline
to $30MM from 1 January 2025 to 28(th) February 2025, to US$15MM
from 1 March 2025 to 31 May 2025, and to zero thereafter.
-- If 500,000 bbl (gross) has not been offloaded and sold from
the Jotun FPSO by 31 May 2025, the holders of Mime's Nordic Bonds
will be allocated up to 2.4 million warrants exercisable into
Kistos ordinary shares at a price of 385p each. The warrants can be
exercised between 30 June 2025 and 18 April 2028. Simultaneously,
up to 1.9 million of the 5.5 million warrants issued as
consideration for the Mime shares will be cancelled.
-- Excluding contingent amounts payable, Kistos estimates that
on a pro forma basis at 31 March 2023, the enlarged Group would
have had net cash of EUR5MM, comprising cash of EUR293MM and
outstanding Nordic Bonds of EUR288MM (EUR0.92 to US$1.00).
Commenting on the proposed acquisition, Andrew Austin, Kistos'
Executive Chairman, said:
"After a period during which commodity price volatility and
fiscal uncertainty has made it difficult to agree deals in the UK
and the Netherlands, I am very pleased to be able to announce
Kistos' expansion into Norway. Kistos has evaluated several
transactions in the UK and Dutch sectors, but the imposition of
punitive windfall taxes and a lack of fiscal certainty have meant
that both countries remain difficult places to commit capital and
ensure continuity of shareholder returns."
"I expect Mime to be a platform for growth on the NCS and I
believe Mime's management team - whose strategy and goals are
aligned with ours - can help us achieve that. Critically, as well
as providing us with visibility on a rising production profile over
the next few years, principally though it's oil, the hydrocarbons
produced at Balder will also enable us to maintain our
industry-leading Scope 1 and Scope 2 CO(2) emissions in the
medium-term. "
ABG Sundal Collier acted as financial advisor to Kistos in
relation to negotiations with the bondholders and the conclusion of
the transaction.
For the purposes of UK MAR, the person responsible for arranging
the release of this announcement on behalf of Kistos is Andrew
Austin, Executive Chairman.
Enquiries
Kistos Holdings plc via Hawthorn Advisors
Andrew Austin
Panmure Gordon (NOMAD, Joint Broker) Tel: 0207 886 2500
John Prior / James Sinclair-Ford
Berenberg (Joint Broker) Tel: 0203 207 7800
Matthew Armitt / Ciaran Walsh
Hawthorn Advisors (Public Relations Tel: 0203 745 4960
Advisor)
Henry Lerwill / Simon Woods
Camarco (Public Relations Advisor) Tel: 0203 757 4983
Billy Clegg / Georgia Edmonds
Notes to editors
Kistos Holdings plc was established to acquire and manage
companies in the energy sector engaging in the energy transition
trend. In May 2021, the Company acquired Tulip Oil Netherlands
B.V., which has a portfolio of assets, including profitable, highly
cash generative natural gas production, plus appraisal and
exploration opportunities. In addition, Kistos acquired a 20%
interest in the Greater Laggan Area (GLA) from TotalEnergies in
July 2022. The GLA includes four producing gas fields and a
development project.
Kistos is a low carbon intensity hydrocarbon producer. The Q10-A
gas field in the Dutch North Sea (60% operated working interest)
recorded an estimated Scope 1 carbon emissions intensity of less
than 1g CO(2) e/boe in 2022. This compares to an industry average
of 22kg CO(2) /boe for gas extracted from the UK continental shelf.
The Q10-A normally unmanned installation is located approximately
20 km from the Dutch shore. It is powered sustainably via wind and
solar power and is remotely operated, limiting offshore visits,
which are conducted by boat.
https://www.kistosplc.com
S
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
AGREAALPFLXDEAA
(END) Dow Jones Newswires
April 19, 2023 02:00 ET (06:00 GMT)
Kistos (LSE:KIST)
Historical Stock Chart
From Apr 2024 to May 2024
Kistos (LSE:KIST)
Historical Stock Chart
From May 2023 to May 2024