Kistos Holdings PLC Announces Oman Acquisition and Positive 2025 Trading Update

Oman move: low-cost barrels and real diversification

Kistos has agreed to acquire interests in three onshore blocks in Oman – 5% of Block 9 (operated by Occidental) and 20% of Blocks 3 & 4 (operated by CCED). The deal is effective from 1 January 2025, but completion still needs customary approvals and partner consents, with the company guiding to the first quarter of 2026.

Why it matters: the acquisition is expected to add 25.6 mmboe of 2P reserves (proved plus probable) net to Kistos at an implied valuation of about $5.80/boe. That is a low entry cost for developed barrels in a proven onshore province, and it diversifies Kistos beyond the North Sea. The assets are described as high quality with growth potential, but do remember the figures are operator estimates and the deal is not yet closed.

Production momentum: strong exit rate and 2026 guidance

Kistos finished 2025 with a proforma exit rate of 22,700 boepd, which includes the Oman interests and the late-December ramp-up of two of six Balder Phase V wells. For the full year, actual production averaged 9,000 boepd – the top end of guidance (8,000-9,000 boepd).

For 2026, the proforma production guide is 19,000-21,000 boepd. “Proforma” here is key – it assumes the Oman deal completes and ongoing ramp-up at Balder. The engine room looks to be the Balder area in Norway, where the Jotun FPSO start-up and 14 Balder Future wells pushed net production above 11,000 boepd in September.

My take: guidance looks credible if the remaining Balder Phase V wells come online smoothly and Oman closes on time. The flip side is obvious – any slippage in approvals or operational hiccups could drag the run-rate. Still, exiting at 22,700 boepd (proforma) sets a decent base.

Reserves and projects: converting resources into cash flow

Year-end proforma net 2P reserves are estimated at 49 mmboe. Kistos says it is continuing to convert 2C resources (contingent, not yet commercial) into 2P reserves (best estimate of recoverable reserves). The company sanctioned Balder Phase VI in 2025 to develop around 1.5 mmboe net, with drilling slated for 2026.

On top, the first phase of the Balder Next project has been sanctioned. This includes debottlenecking the Jotun FPSO to increase capacity and drilling new production wells targeting approximately 3.6 mmboe net of additional reserves. The subsequent phase will decommission the Balder FPU in 2028, with prep work starting in 2026, which should materially lower operating costs in the area.

Bottom line: this is the right sequence – unlock capacity, add barrels, then strip out redundant infrastructure to cut opex. If executed well, it supports both volumes and margins.

Financial health: cash cushion, tax rebates, and bond debt

As at 31 December 2025, Kistos held $199 million of cash and near-cash. That followed receipt of $75 million of Norwegian tax rebates in December and includes $28 million of “near-cash” assuming the 2025 rebate was received as at year-end. There is a further $28 million of tax rebates receivable for 2025 activity, payable in December 2026. The company also maintains $22 million in escrow for standard credit and decommissioning arrangements.

Adjusted net debt was approximately $81 million against outstanding bond debt of $280 million. Note that “adjusted net debt” is a non-IFRS measure defined by Kistos as cash and cash equivalents (including restricted cash) less the carrying amount of outstanding bond debt, and it treats the 2025 Norwegian rebate as if received at year-end.

My view: the balance sheet looks serviceable for the current project slate and M&A integration. The bond stack remains chunky, so delivery on ramp-up and cash generation in 2026 is important. Interest costs are not disclosed here.

Key numbers at a glance

Metric	Figure
2025 proforma exit rate	22,700 boepd
2025 actual average production	9,000 boepd
FY26 proforma production guidance	19,000-21,000 boepd
Proforma net 2P reserves (year-end)	49 mmboe
Oman 2P reserves to be acquired	25.6 mmboe (operator estimates)
Implied Oman 2P valuation	$5.80/boe
Cash and near-cash (31 Dec 2025)	$199 million
Adjusted net debt	~$81 million
Outstanding bond debt	$280 million
Tax rebate receivable (2025 activity)	~$28 million (payable Dec 2026)

Asset updates: Norway, UK West of Shetland, and the Netherlands

Norway is the bright spot. With Jotun FPSO online and the Balder Future programme advancing, Kistos saw Balder area net output top 11,000 boepd in September. The next steps – Balder Phase VI and Balder Next – target more reserves, higher throughput, and structurally lower costs from 2028.

In the UK, Serica Energy is expected to assume operatorship of the Greater Laggan Area in the first quarter of 2026. Kistos highlights “significant organic growth potential” via infill drilling and third-party tie-backs to the Shetland Gas Plant. If realised, that could add near-term volumes without mega-capex.

In the Netherlands, Q10-A uptime improved to roughly 97% in H2 2025 after a third-party tieback outage earlier in the year. Reliability matters here; the step-up suggests the asset is back on a steady footing, though exposure to third-party infrastructure remains a risk lever.

Gas storage: Hole House returns to service

Kistos has started work to bring the Hole House gas storage facility back into service following a September FID. Capacity is set to increase by 63% over the next two years. Strategically, that is attractive – storage can add earnings resilience and is clearly aligned with the UK’s energy security push.

How I read it: positives, risks, and what to watch

Positives

• Compelling Oman entry price at ~$5.80/boe for 2P, adding scale and geographic diversification.
• Balder delivering – strong 2025 exit rate (proforma) and a clear queue of sanctioned projects.
• Cash and near-cash of $199 million and adjusted net debt of ~$81 million provide flexibility.
• Operational reliability improving at Q10-A; UK storage capacity scaling up by 63%.

Risks and sensitivities

• Oman acquisition still subject to approvals and partner consents; completion is expected but not guaranteed.
• Proforma metrics assume Oman and Balder ramp-up – delivery risk sits with approvals, drilling, and facilities performance.
• Debt remains at $280 million of bonds; interest costs not disclosed here.
• Exposure to third-party infrastructure (e.g., tiebacks) can interrupt flows, as seen earlier in 2025.

Key upcoming catalysts

• Completion and integration of the Oman acquisition (target: Q1 2026).
• Ramp-up of the remaining Balder Phase V wells and drilling of Balder Phase VI in 2026.
• Serica’s operatorship handover at Greater Laggan and any infill/tie-back activity.
• Progress milestones on Jotun FPSO debottlenecking and Hole House capacity build.
• Confirmation of 2026 production tracking against 19,000-21,000 boepd guidance.

Final thought

This is a constructive update. Kistos hit the top end of 2025 guidance, teed up low-cost barrels in Oman, and advanced a pipeline of Norwegian projects that should lift throughput and trim unit costs. The balance sheet looks capable of handling the plan, albeit with bond debt to mind. If management lands the Oman close and keeps Balder on schedule, 2026 should be about turning sanctioned projects into cash flow – and that is usually when the story gets interesting.