TIDMKIST
RNS Number : 0772S
Kistos PLC
12 March 2021
12 March 2021
THIS ANNOUNCEMENT, INCLUDING THE INFORMATION CONTAINED IN IT, IS
RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION,
DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM THE
UNITED STATES, AUSTRALIA, CANADA, JAPAN, OR THE REPUBLIC OF SOUTH
AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE
OR DISTRIBUTION WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION 2014/596/EU (WHICH FORMS PART OF
DOMESTIC UK LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT
2018) ( " 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. PLEASE SEE THE IMPORTANT NOTICE WITHIN
THIS ANNOUNCEMENT.
For immediate release
Kistos plc
("Kistos", the "Company" or the "Group")
Proposed Acquisition of Tulip Oil Netherlands B.V.
Suspension of Trading on AIM
Kistos (AIM: KIST), the closed-ended investment company which
has been established with the objective of creating value for its
investors through the acquisition and management of companies or
businesses in the energy sector, is pleased to announce that it has
entered into a binding share purchase agreement, subject to
customary conditions precedent, to acquire the entire issued and
outstanding share capital of Tulip Oil Netherlands B.V. ("TON")
from Tulip Oil Holding B.V. (the "Seller" or "Tulip" or "TOH") (the
"Acquisition").
Proposed transaction
-- Kistos proposes the acquisition of TON, which, via its
wholly-owned subsidiary, Tulip Oil Netherlands Offshore B.V.
("TONO"), owns an operating interest in the Q10-A offshore gas
field and 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.
-- The total upfront consideration for the Acquisition, subject
to completion adjustments, is EUR 220 million. This consideration
will be satisfied through a combination of cash, the assumption by
Kistos of an existing bond instrument issued by TONO, the issue of
a new debt instrument and the issue to the Seller of equity in
Kistos. Kistos will also issue warrants over EUR 5 million of
ordinary shares at a premium of 30% to the price of any equity
placing to TOH. In addition, contingent consideration of up to EUR
163 million is payable on certain development milestones.
-- It is anticipated that the Company will carry out an equity
placing to existing and new investors in connection with the
Acquisition (the "Placing"). The Company is exploring how the
Placing can be accessed by retail shareholders. Both the Seller and
various Directors of the Company will participate in the
Placing.
-- The Company is working with debt advisors in Norway to explore the options for the new debt instrument which will be issued as part of the consideration.
-- The completion of the Acquisition is subject to, inter alia:
o certain regulatory consents and confirmations;
o finalisation of the Placing and the debt financing associated
with the Acquisition;
o the publication of an AIM admission document;
o shareholder approval of the Acquisition; and
o Admission of the enlarged share capital of Kistos to trading
on AIM.
-- Upon completion of the Acquisition, the Company expects to
cease to be an investing company under the AIM Rules for Companies
and instead become a trading company. The Group will continue to
review acquisition opportunities as they arise.
Andrew Austin, Chairman of Kistos, commented:
"We are very excited to be beginning the next phase of Kistos'
journey with the acquisition of these profitable and cash
generative assets, which have probably the lowest carbon footprint
of any production assets in the North Sea. 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. In addition, we
see potential for significantly increased production from
discovered hydrocarbons within the licences being acquired by
Kistos.
"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. "
Information on TON
-- The Acquisition comprises a controlling (60%) interest in the
Q10-A offshore gas field together with
interests in a suite of offshore exploration and production
licences in the Dutch North Sea.
-- The Q10-A field has 2P reserves of 19.5 mmboe [1] and
generated total net production of 5.47 mboe/d in 2020.
-- Q10-A is reliant on solar and wind power. Its carbon
emissions from production operations were <10g C0(2) e/boe(1) in
2020 and 17g C0(2) e/boe(1) in 2019. These are significantly below
the North Sea average of 21 kg C0(2) /boe [2] . The Acquisition is
consequently in line with the Company's strategy to acquire assets
with a role in the energy transition.
-- Plans for the future developments of the assets being
acquired by Kistos utilise wind and solar power, which will make
Kistos one of the lowest CO(2) /boe emitters of Scope 1 emissions
from upstream operations in North West Europe.
-- The group to be acquired recorded aggregated EBITDA(1) of EUR
30.60 million in the year to 31 December 2020 (2019: EUR 36.27
million) and profit before tax in the same period of EUR 16.27
million (2019: EUR 38.66 million).
-- The realised gas price in the year to 31 December 2020 was
EUR 11.58/mWh (2019: EUR 12.55/mWh). The realised prices and
forward curve imply an average 2021 gas price of EUR 18.30/mWh.
The Q10-B, Q11-B and M10a/M11 discoveries potentially have in
total 78.5 mmboe(1) of 2C resources, each with development plans
prepared, and provide material growth opportunities for Kistos
going forward. In addition to the contingent resource, TON holds
various exploration prospects and appraisal projects that provide
optionality and upside to investors across the portfolio.
Assets to be acquired
Licence Type Licence interest Operator
Q07/Q10-A Production 60% TONO
------------ ----------------- ---------
Q8, Q10-B, Q11 Exploration 60% TONO
------------ ----------------- ---------
M10a/M11 Exploration 60% TON
------------ ----------------- ---------
Donkerbroek (main) Production 60% TON
------------ ----------------- ---------
Donkerborek (West) Production 60% TON
------------ ----------------- ---------
Akkrum 11 Production 60% TON
------------ ----------------- ---------
Temporary suspension of trading
The Acquisition constitutes a reverse takeover in accordance
with Rule 14 of the AIM Rules for Companies. A further announcement
with full details of the Acquisition will be issued at the
appropriate time and an AIM admission document setting out, inter
alia, details of the Acquisition (including a competent person's
report on the material assets and liabilities of TON) will
published and sent to Kistos' shareholders with a notice of general
meeting. Accordingly, at the request of the Company, the Company's
ordinary shares will be suspended from trading on AIM with effect
from 7:30 a.m. today and will remain so until either the
publication of an AIM admission document or until confirmation is
given that the Acquisition is not proceeding.
The Company will release further announcements as and when
appropriate.
For the purposes of UK MAR, the person responsible for arranging
for the release of this announcement on behalf of Kistos is Andrew
Austin, Executive Chairman.
S
Enquiries:
Kistos plc
Andrew Austin c/o Camarco Tel: 0203 757
4983
Panmure Gordon
Nick Lovering / Atholl Tweedie / Tel: 0207 886 2500
Ailsa Macmaster
Camarco
Billy Clegg / James Crothers Tel: 0203 757 4983
IMPORTANT INFORMATION
This announcement does not constitute, or form part of, any
offer or invitation to sell or issue, or any solicitation of any
offer to purchase or subscribe for any securities in the United
States, Canada, Australia, Japan or the Republic of South Africa or
in any other jurisdiction in which such offer or solicitation is
unlawful, prior to registration, exemption from registration or
qualification under the securities laws of any jurisdiction. The
distribution of this announcement and other information in
connection with the placing and admission in certain jurisdictions
may be restricted by law and persons into whose possession this
announcement, any document or other information referred to herein
comes should inform themselves about and observe any such
restriction. Any failure to comply with these restrictions may
constitute a violation of the securities laws of any such
jurisdiction. Neither this announcement nor any part of it nor the
fact of its distribution shall form the basis of or be relied on in
connection with or act as an inducement to enter into any contract
or commitment whatsoever.
Panmure Gordon (UK) Limited (" Panmure Gordon "), which is
authorised and regulated in the United Kingdom by the Financial
Conduct Authority, is acting exclusively for the Company as
Nominated Adviser and Broker in connection with the placing and
admission, and will not be responsible to any other person for
providing the protections afforded to customers of Panmure Gordon
or advising any other person in connection with the placing and
admission. Panmure Gordon's responsibilities as the Company's
Nominated Adviser under the AIM Rules for Companies and the AIM
Rules for Nominated Advisers will be owed solely to the London
Stock Exchange and not to the Company, the directors or to any
other person in respect of such person's decision to subscribe for
or acquire ordinary shares. Apart from the responsibilities and
liabilities, if any, which may be imposed on Panmure Gordon by the
Financial Services and Markets Act 2000, as amended or the
regulatory regime established under it, Panmure Gordon does not
accept any responsibility whatsoever for the contents of this
announcement, and no representation or warranty, express or
implied, is made by Panmure Gordon with respect to the accuracy or
completeness of this announcement or any part of it and no
responsibility or liability whatsoever is accepted by Panmure
Gordon for the accuracy of any information or opinions contained in
this announcement or for the omission of any material information
from this announcement.
This announcement may include statements that are, or may be
deemed to be, "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "estimates", "plans",
"projects", "anticipates", "expects", "intends", "may", "will", or
"should" or, in each case, their negative or other variations or
comparable terminology. These forward-looking statements include
matters that are not historical facts. They appear in a number of
places throughout this announcement and include statements
regarding the directors' current intentions, beliefs or
expectations concerning, among other things, the Company's results
of operations, financial condition, liquidity, prospects, growth,
strategies and the Company's markets. By their nature,
forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances. Actual results and
developments could differ materially from those expressed or
implied by the forward-looking statements. Forward-looking
statements may and often do differ materially from actual results.
Any forward-looking statements in this announcement are based on
certain factors and assumptions, including the directors' current
view with respect to future events and are subject to risks
relating to future events and other risks, uncertainties and
assumptions relating to the Company's operations, results of
operations, growth strategy and liquidity. Whilst the directors
consider these assumptions to be reasonable based upon information
currently available, they may prove to be incorrect. Save as
required by applicable law or regulation, the Company undertakes no
obligation to release publicly the results of any revisions to any
forward-looking statements in this announcement that may occur due
to any change in the directors' expectations or to reflect events
or circumstances after the date of this announcement.
Neither the content of the Company's website nor any website
accessible by hyperlinks on the Company's website is incorporated
in, or forms part of, this announcement.
[1] Source: Tulip Oil Holdings B.V.
[2] Source: OGA, 2018 Carbon Emissions Intensity
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END
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