Kistos, 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.

Balance sheet impact of acquisition terms (US$MM*):
     - Mime cash at bank (31st March 2023): 109 US$MM
     - Tax refund due (December 2023): 80 US$MM
     - Payment to Bondholders (at completion): 75 US$MM
     - Debt retained by the enlarged Group (at completion): 225 US$MM
     - Adjusted total: 111 US$MM
     - ontingent amount (maximum payable in 2025): 45 US$MM

* 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 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. This is well below both the global and the North Sea average.

About Kistos Holdings

Kistos Holdings plc (LSE: KIST) 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 CO2e/boe in 2022. This compares to an industry average of 22kg CO2/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.