(Sharecast News) - Kistos announced on Friday that following an appeal, the Netherlands Ministry of Economic Affairs had reversed its decision and granted a five-year extension to the M10/M11 licence.
The AIM-traded firm said the ruling came into effect immediately, paving the way for continued exploration and development activities in the northern area of the Netherlands North Sea Shelf.
It said Kistos NL1, holding a 60% operated working interest in the M10/M11 licence, would continue its partnership with EBN, which holds a 40% working interest in the licence.
The board said the M10/M11 licence was estimated to hold technically recoverable 2C resources, net to Kistos, amounting to 174 billion cubic feet of gas, or approximately 31.7 million barrels of oil equivalent.
It said the resource estimates had been independently verified and classified in accordance with the stringent standards set by the Petroleum Resources Management System (PRMS).
In preparation for further drilling activities, Kistos said it had completed stakeholder mapping as part of its approach to ensure that the exploration and assessment phases were conducted responsibly, and in line with environmental and community considerations.
The next step for Kistos would be to apply for a permit to conduct an appraisal well.
It said that process would involve extensive planning and collaboration with relevant parties to ensure that all regulatory and environmental requirements are met.
Following the positive outcome of the appeal, Kistos now estimated its group 2P, or proved and probable, reserves to be 36.2 million barrels of oil equivalent.
In addition, its 2C resources, which represent contingent resources with a lower level of certainty, were estimated to be 72.2 million equivalent barrels, bringing total group 2P and 2C resources to 108.4 million equivalent barrels.
"This is very good news both for Kistos and for the Netherlands - it increases the potential for domestic gas demand to be met with domestic supplies, which has positive implications for carbon dioxide emissions," said executive chairman Andrew Austin.
"Whilst the delay to the M10/M11 project has been frustrating, we are pleased that the right outcome has been achieved and look forward to working with the local municipalities to obtain the relevant permits to appraise the field.
"We continue to work with our partners in all three jurisdictions to mature further resources to reserves prior to year-end."
At 0851 BST, shares in Kistos Holdings were up 4% at 238.15p.
Reporting by Josh White for Sharecast.com.
Kistos Holdings (KIST)