Kistos H1 2025: first oil from Jotun, Hole House FID, and a reset for H2
Kistos has delivered a busy first half. The big operational milestone landed on time: first oil from the Jotun FPSO in June. That underpins full-year production guidance of 8,000-9,000 boepd. Alongside, the company has sanctioned the recommissioning of Hole House gas storage in the UK with third-party financing, targeting a 63% increase in working capacity.
There’s plenty to like in the trajectory for H2 and 2026, but H1 financials reflect a transitional period – lower volumes and oil prices weighed on revenue and EBITDA, and unit operating costs stepped up. Below I unpack the moving parts and why they matter for investors.
Key numbers investors will care about
| Metric | H1 2025 | H1 2024 | Comment |
|---|---|---|---|
| Average production rate (boepd) | 6,200 | 8,400 | Down 26% during the transition to Jotun start-up |
| Revenue ($) | 87,903,000 | 113,328,000 | Lower volumes and oil price; higher realised gas price helped |
| Adjusted EBITDA ($) | 23,673,000 | 48,585,000 | -51% year-on-year |
| Average realised oil price ($/bbl) | 67 | 82 | Oil price drag |
| Average realised gas price ($/boe) | 77 | 54 | Gas price tailwind |
| Unit opex ($/boe) | 42 | 29 | Expected to fall with low-cost Balder Future barrels (~$5/boe) |
| Total cash incl. restricted ($) | 104,000,000 | not disclosed | $20m of this is restricted |
| Adjusted net debt ($) | 86,038,000 | 88,638,000 | Broadly flat vs prior year |
| Loss for the period ($) | (12,337,000) | (17,242,000) | Basic loss per share $(0.15) |
Jargon check: boepd means barrels of oil equivalent per day; opex is operating expenditure. FPSO is a floating production, storage and offloading vessel. FID is a final investment decision. Ullage refers to spare processing/storage capacity on a production vessel.
Norway: Jotun online, Balder phases ramping
Operationally, Norway did what it said on the tin. Production efficiency at Balder FPU and Ringhorne Platform was 91% (planned: 86%). The Jotun FPSO left the yard in March and achieved first oil in June, with the first of fourteen Balder Future wells starting in July. Ramp-up concluded in September, reaching peak production of approximately 9,000 boepd (net) and total area production over 11,000 boepd (net).
Growth is not done. The COSL Pioneer rig is drilling six Balder Phase V wells targeting 3.0 mmboe (net), with first oil from the first multi-lateral well expected in Q4 2025, subject to FPSO ullage. Balder Phase VI hit FID in June, targeting around 1.5 mmboe (net) via a new multi-lateral tied back to Jotun, with start-up expected by end-2026 and payback in less than one year according to the company.
Why this matters: these are low-cost barrels. Kistos highlights unit cost of roughly $5/boe from Balder Future. As these volumes dominate the mix, group unit opex should fall, EBITDA margins should expand, and free cash flow should improve.
UK: Greater Laggan steady; Victory and Hole House to reshape economics
GLA net production averaged 2,500 boepd (H1 2024: 3,400 boepd). A prolonged outage at Ninian Central slowed a routine de-liquifying run in May, but the bigger story is what’s next: Victory field remains on schedule for first gas by end-2025. Higher throughput at the Shetland Gas Plant is expected to deliver “significant” opex savings for GLA partners.
On gas storage, Kistos reached FID in September to recommission Hole House, backed by third-party financing on attractive terms. The project is expected to increase working capacity by 63%. For UK energy security and Kistos’ midstream earnings, this is a useful option on winter volatility.
Netherlands: a tough half, some relief expected in H2
Q10-A production was 900 boepd lower than H1 2024 (2,200 boepd). Natural decline and a TAQA-operated P15-D shutdown that overran 98 days versus 35 days planned were the culprits. Management expects “flush” production after restart to partially offset the shortfall in H2. A rigless intervention on Q10-A04 was hindered by proppant; next steps are being assessed.
Balance sheet, bonds and tax: the de-risking continues
Kistos ended the period with $104 million of cash (including $20 million restricted) and adjusted net debt of $86 million. Face value of bond debt was $264 million (KENO01 and KENO02), both issued by the Norwegian subsidiary. Notably, the Hybrid Bonds linked to Jotun milestones were cancelled for nil consideration, although some holders exercised rights to acquire warrants at 385 pence per share. That removes a potential cash outflow but introduces potential dilution if exercised.
Cash tax payments in H1 were $23.8 million, mainly settling UK and Dutch liabilities. There’s relief coming: Kistos expects a $74 million Norwegian tax rebate in December 2025 related to 2024 losses, and estimates a further $41.1 million for H1 2025 losses to be received in December 2026 (unless offset against profits).
Watch the Dutch Solidarity Contribution Tax. The group recognises a non-current tax liability of $50.3 million (pre-discount €47 million) under IFRIC 23, even though it filed a nil return based on advice. It’s under legal challenge more broadly, but until resolved it sits on the balance sheet.
Operational outlook and catalysts to watch
- Production guidance reaffirmed at 8,000-9,000 boepd for 2025.
- Balder Future: all 14 wells online in H2 2025 – low-cost barrels should drive a visible step-down in unit opex from the current $42/boe.
- Balder Phase V: first oil from the initial multi-lateral well targeted in Q4 2025, subject to FPSO ullage.
- Balder Phase VI: start-up by end-2026, targeting c. 1.5 mmboe (net) with rapid payback.
- Victory gas field: first gas by end-2025, expected to lower GLA unit costs via higher SGP throughput.
- Hole House gas storage: recommissioning sanctioned; 63% capacity uplift supported by third-party financing.
- Norwegian tax rebate: approximately $74 million due in December 2025, supporting liquidity.
My take: a classic “H2-weighted” year with clear upside levers
The bad news is already on the page: H1 saw lower volumes, lower oil price and higher unit costs, which halved Adjusted EBITDA to $23.7 million and produced a $12.3 million loss. Netherlands volumes were soft and UK production had a one-off process constraint. None of this is ideal.
The good news is operational delivery in Norway and a balance sheet that looks set to strengthen. First oil at Jotun arrived on schedule, ramp-up completed in September, and the next wave of wells is in motion. Low-cost barrels plus the expected Norwegian rebate should tighten the net debt picture, while the hybrid bond overhang has gone.
Risks remain: commodity prices, execution on Balder V and VI, Netherlands optimisation, and the uncertain Dutch solidarity levy. Bond debt at $264 million is meaningful, though liquidity is adequate and capex is set to fall in H2 with Jotun refurbishment complete.
Overall, the direction of travel is positive. If Kistos can keep the Norwegian machine humming, deliver Victory on time, and bring Hole House back to life ahead of a firm winter, the financial profile in 2026 could look very different to this transition half.
Definitions for new readers
- FPSO: a floating production, storage and offloading vessel used to process and store oil offshore.
- boepd: barrels of oil equivalent per day, a way of combining oil and gas volumes into one metric.
- FID: final investment decision – the point at which a project is formally sanctioned.
- Opex: operating expenditure, the ongoing cost to run producing assets.
- Ullage: spare processing or storage capacity on a production facility.
