AIM-listed Kistos has acquired a portfolio of UK continental shelf (UKCS) assets from TotalEnergies, including a 20pc stake in the Greater Laggan Area (GLA) West of Shetland gas fields and 25pc in block 206/4a, which includes the Benriach prospect. Benriach’s resources are estimated at 638bn ft³ (18.07bn m³).
The GLA fields comprise the operational Laggan, Tormore, Edradour and Glenlivet as well as the undeveloped Glendronach prospect. Kistos expects Glendronach to reach FID later this year, with the field to be developed by a single production well for around £20mn ($24mn). Kistos expects to be able to deduct its share of those costs under the UK’s Energy Profits Levy (EPL).
There is “significant upside potential from the Glendronach development project and the highly prospective Benriach exploration target”, says Kistos’ executive chairman, Andrew Austin, who adds that both projects are “expected to meet the investment criteria for the UK's recently implemented EPL”.
The deal is forecast to double the AIM-listed independent’s output to around 12,000bl/d oe this year and raise 2P reserves by 6.2mn bl oe. The acquisition is “an important step towards expanding and diversifying our producing asset base in one of the largest gas hubs in the UK”, says Austin. The company was active only in Dutch waters before the UKCS deal, holding operating stakes in ten licences.
The GLA fields are also much less carbon-intensive than most in the region, with Kistos forecasting emissions this year at around 13kg CO₂e/bl oe, compared with a North Sea average of 22kg CO₂e/bl oe.
TotalEnergies remains the operator of the GLA fields and retains 40pc ownership, while the other partners comprise UK-headquartered Ineos (20pc) and AIM-listed Rockrose (20pc). The French major sold down the UKCS stakes to Kistos in return for $125mn plus two contingent payments dependent on gas prices and potential future developments.
Comments