Malcy's take on Oman11 Dec 2025 10:35
Malcy's view on the deal is positive, as you would expect. An interview with Andrew Austin is scheduled for later this week.
"This is one excellent deal, in a geography I am published as saying I like a lot and have visited a number of times. Moving into Oman which is amongst the very best postcodes worldwide for hydrocarbon exploration and production and where some of the best acreage is available and offers production and huge long term potential. I look forward to interviewing Andrew Austin later this week especially as we know that Kistos has looked at the area before and a deal such as this has been widely trailed. Doing this deal does not mean that the company is abandoning the UKCS, they are still looking at any M&A opportunities here but I feel that they needed to have a different play and MENA in general and Oman in particular is a great place to start. Looking at the detail there is a great deal that I like, these material plays add 25.6m barrels of 2P+ and 9-10,000 b/d of mainly liquids production. At a stroke this doubles both 2P reserves and production, the former is now over 50m barrels with upside of c.1.9bn barrels (Gross) and the latter is around 19-21,000 b/d with scope for more.
Kistos has paid $148m in cash for the deal and is effective January 2025 and is expected to complete in 1Q 2026, backdating the deal makes a small but positive difference given that this year has been a high capex year.
Kistos is paying just $5.80 per 2P barrel which is to be frank astonishing and that makes it both accretive on day 1 and cash flow generative. The size of this acquisition is really meaningful for the company, they move into a different space, producing 20/- b/d which has a knock-on effect on the cost of debt, moving that to parent company level will knock points off it and away from the Norwegian subsidiary.
As I said at the top, I think that this is a fantastic deal for Kistos and its loyal group of shareholders. Management has pulled a deal with immediate and substantial cash flow and is accretive to boot, with the significant upside for long term growth. I am interviewing Andrew Austin this week and look forward to asking him for more details. The shares are up by over 21% today and 70% y/y, they remain in the Bucket List and with deals like this the outlook is indeed very rosy."
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