Kistos maintains 2026 production guidance after cash-generative first half

Kistos Holdings PLC has maintained its full-year production guidance after reporting solid operational uptime, higher cash and further progress across its Balder, Greater Laggan Area and Oman interests.

The independent energy company recorded H1 2026 pro forma production of 20,500 barrels of oil equivalent per day, or boepd. Full-year pro forma guidance remains between 19,000 and 21,000 boepd.

That is an encouraging start, although investors need to pay attention to the phrase "pro forma". The figures include the Oman assets as if the acquisitions had completed on 1 January 2026, despite both transactions still being in progress.

Kistos H1 2026 key figures

Metric	H1 2026 update
Pro forma production	20,500 boepd
FY 2026 production guidance	19,000-21,000 boepd
Pro forma 2P reserves	47.6 MMboe
Estimated 2C resources	52.4 MMboe
Pro forma EBITDA	Approximately $205 million
Non-pro forma EBITDA	Approximately $155 million
Cash and near-cash equivalents	$259 million
Adjusted net debt	$23 million
Average realised oil price	$104 per barrel
Average realised gas price	97p per therm

EBITDA means earnings before interest, tax, depreciation and amortisation. It is commonly used to assess underlying operating performance, but it is not the same as profit or free cash flow.

Production guidance stays on track

Kistos said operational uptime was strong across its portfolio during the first half. This helped pro forma production reach 20,500 boepd, towards the upper end of the maintained full-year range.

The Greater Laggan Area and Balder floating production unit completed planned shutdowns during the period. A separate planned shutdown of the Jotun floating production, storage and offloading vessel, known as an FPSO, was due to finish by the end of July.

Maintaining guidance despite this scheduled maintenance is a positive feature of the update. However, Kistos has not disclosed a detailed production breakdown by asset, so investors cannot see from this announcement which operations contributed most strongly.

Balder projects move towards production

Work is continuing across the Balder area. The FPSO debottlenecking project is under way, with the aim of increasing processing capacity and operational flexibility. It is also intended to allow the Balder floating production unit to be removed in 2028.

Drilling for Balder Phase V has been completed. The COSL Pioneer rig has now started drilling the single Phase VI trilateral well, while the King well has been drilled from the Ringhorne platform.

Both wells are expected to begin production during the second half of 2026. Delivering those start-ups on schedule will be important if Kistos is to stay within guidance and build momentum into the following period.

The sanctioning of Balder Next in June also contributed to pro forma 2P reserves of 47.6 million barrels of oil equivalent. These are proved and probable reserves, representing the company's best estimate of commercially recoverable volumes.

Kistos reported a 65% reserve replacement ratio for the first six months. Estimated 2C resources stood at 52.4 MMboe. These are potentially recoverable resources from known accumulations that are not yet approved for commercial development because one or more conditions remain outstanding.

Greater Laggan operatorship changes hands

Operatorship of the Greater Laggan Area has successfully transferred to Serica Energy.

Kistos believes the change creates opportunities to extract near-term value through infill drilling and further third-party tie-backs to the Shetland Gas Plant. A tie-back connects another field or well to existing infrastructure, potentially avoiding the cost and time involved in building a standalone facility.

The opportunity sounds attractive, but the update does not provide expected production, capital expenditure or project timing for these potential developments. They should therefore be treated as future opportunities rather than committed additions to output.

Oman completion remains the key moving part

The proposed acquisition of Blocks 3&4 in Oman is progressing, with Kistos saying all necessary approvals have been obtained, including Ministerial Approval. Completion is expected after the Royal Decree is issued.

Progress on Block 9, which operates under a different exploration and production sharing agreement framework, is also said to be moving smoothly. Completion is expected later in the second half of 2026.

Both transactions have an effective date of 1 January 2025. Investors can revisit the background in the earlier article covering the Oman acquisition and 2025 trading update.

The Block 9 joint venture also signed revised agreement terms with Oman's Ministry of Energy and Minerals during H1. The amendment became effective on 1 July 2026 following ministry approval and is intended to support higher production and future reserve growth.

The main caveat is straightforward: the acquisitions have not yet completed. Until they do, the pro forma production, EBITDA, reserves and resources remain illustrations of the enlarged portfolio rather than Kistos's completed group results.

Cash rises, but the composition matters

Kistos reported $259 million of cash and near-cash equivalents at 30 June 2026, compared with $179 million at the end of 2025.

This headline includes $95 million held in escrow for the Blocks 3&4 acquisition and a $36 million near-cash receivable. The latter assumes receipt of the 2025 Norwegian tax rebate as at 30 June.

Adjusted net debt was $23 million. Kistos calculates this using $304 million of interest-bearing debt, less $259 million of cash and near-cash equivalents, $15 million of restricted funds and a $7 million acquisition prepayment.

The balance sheet therefore appears relatively balanced on the company's adjusted measure, but not all of the reported cash is freely available for general purposes. The escrow balance in particular is earmarked for the Oman transaction.

Pro forma EBITDA was approximately $205 million, compared with approximately $155 million on a non-pro forma basis. The $50 million difference highlights the potential contribution from Oman, but those pro forma figures are based on draft results supplied by the seller.

Kistos did not disclose revenue, profit, capital expenditure or free cash flow in this update, limiting the conclusions investors can draw about the full quality of earnings and cash generation.

What investors should watch next

The update contains several positives: production is within the guidance range, operational uptime has been strong, cash has increased and the reserve base has expanded following Balder Next's sanction.

The main questions now concern execution. Investors will want to see the Oman transactions complete, the King and Phase VI wells start production during H2, and the Jotun shutdown finish as planned.

There is also a distinction between a strong pro forma portfolio and the group's current reported position. Closing that gap through completed acquisitions and delivered production will be the real test over the remainder of 2026.

The original company announcement contains the complete operational update and definitions used by Kistos.