Kistos Holdings plc plans to expand into the Norwegian Continental Shelf with a conditional agreement to acquire Mime Petroleum A.S.
BALDER – RINGHORNE
Executive chairman Andrew Austin said that commodity price volatility and fiscal uncertainty had made it difficult to agree deals in the UK and the Netherlands.
“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.”
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.
The operator estimates 2P reserves at Balder and Ringhorne were 23.6 MMboe net to Mime at the end of 2022.
Kistos also 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 more than 2,000 boe/d in 2023.
BALDER X
Kistos said that the production figure would increase when the Balder X project is onstream, with enlarged group production expected to be more than 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.
This 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 $130m, on which tax relief is 78% and is expected to result in a further significant tax refund in December 2024.
Kistos added that Scope 1 and Scope 2 CO2 emissions from the Balder Hub are expected to fall by more than 50% to approximately 7.5kg per boe once Balder X is onstream, “well below” the global and North Sea average.
TERMS
Kistos will pay US$1 and issue up to 6 million warrants exercisable into new Kistos ordinary shares at a price of 385p each, a premium of 31.4% based on the trading date of 293 pence on 18 April 2023.
At the end of Q1 2023, Mime had cash of $109million and is due a tax refund of $80m in December 2023.
On completion, Mime will repay $75m of its debt and the enlarged group will assume the remaining $225m.
A payment to Mime’s bondholders of up to $45m during 2025 is contingent on certain operational milestones being achieved.
On 31 March 2023, Mime had cash at bank of $109m and Kistos held €262m with net cash, being cash less face value of debt, of €181m.
During 2022, Mime’s owner made an unaudited pre-tax loss of $103m including an impairment charge of $71m.
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