Business
Balder X Project Update
Balder X Project Update.
About this update from Kistos Holdings Plc
[{"type":"text","content":"\n\nTHIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) (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.\n \n21 August 2024\n\n \nKistos Holdings plc\n \n(\"Kistos\" or \"the Company\")\n \nBalder X project update - Kistos shareholders protected from any delay\n \nKistos (LON: KIST), notes that Var Energi (\"Var\" or \"the Operator\"), released an update for the Balder X project this morning, in which Kistos Energy (Norway) AS (\"KENAS\") has a 10% interest. Var reported that the target production start date has been moved to the second quarter 2025.\n \nWhen Kistos acquired Mime Petroleum this scenario was envisaged. In the deal structuring with the bond holders (who effectively controlled MIME at the time) we protected Kistos from such a delay and cost increase by the provision of the $45 million Hybrid Bond. This $45 million is structured such that if 500,000 bbls (gross) isn't lifted from the Jotun FPSO before the 31st May 2025 then the full $45 million is not payable. Therefore, we as a board are confident that there will be no adverse impact from the delay. It is likely that the effect of the delay on Capex will be significantly less than the positive effects of the Hybrid Bond not being paid in full.\n \nIn reaching the decision to delay Balder X, a key consideration was to limit as much as possible the carryover of work on the Jotun FPSO into the offshore installation and start-up phase. With all development wells completed and all subsea production systems installed, the plan now is to complete the vessel fully onshore.\n \nThe operator has reviewed its cost estimate for the project to reflect sail-away of the Jotun FPSO in the spring of 2025. The revised CAPEX forecast represents an increase of approximately US$400 million gross pre-tax (approximately $40 million net to Kistos pre-tax, of which $8.8 million is the approximate post-tax impact) of which 75% is expected to be incurred in 2025.\n \nAs announced by Var this morning, Balder X, will secure production from the Balder Area beyond 2045. It will unlock gross proved p...