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Received regulatory approval for the development
of the Victory gas field. As it plugs into existing
infrastructure, including Kistos’ co-owned
Shetland gas plant, this could extend the life
of the company’s own oil and gas assets in
the area, reduce costs and potentially delay
decommissioning.
Kistos demonstrated its financial strength by
paying down a little under €80 million worth of
Dutch bonds early in December, which will reduce
interest costs. It closed out 2023 with cash and
‘near-cash’ of €275 million (though net debt of €73
million according to investment bank Berenberg).
Based on forecasts from Berenberg the company is
expected to generate free cash flow of nearly €150
million in 2025 as new assets come on stream.
This should provide the firepower for further M&A
and is more than the current market value of the
business.
If Kistos (KIST:AIM) had its way it may well not
have been a small cap by this point. It had hoped
a merger with Serica Energy (SQZ:AIM), which it
tried and failed to pull off in 2022, would have been
a ticket to Main Market status and a place in the
FTSE 250.
Having absorbed its failure to get that deal over
the line, some other operational disappointments,
and a significant drop in the high gas prices which
followed Russia’s invasion of Ukraine, the shares
have been marked substantially lower by the
market.
This has created what looks a pretty compelling
opportunity for risk-tolerant investors to buy a
company with enviable balance sheet flexibility,
scope for significant growth in free cash flow from
its existing portfolio and ambitions to target further
deals in the northern European energy space.
The company is run by Andrew Austin, who
may be familiar to followers of the sector from
his previous ventures – including Rockrose Energy
(taken over in July 2020 in a £243 million deal).
Kistos’ current producing assets are based in
the Netherlands and, in line with the company’s
strategy of delivering hydrocarbons with lower
accompanying emissions, the platform on its core
Q10-A field is powered through wind and solar
generation.
The company is also developing assets in
Norway and to the west of Shetland. It received
a boost in the latter region when Shell (SHEL)
Said without a hint of bias ;-)
On the other hand AJ Bell have just listed Kistos as one of 5 Small Cap Stars to Buy Today.
Maybe they know something we (you) don't. I'm an AA believer after RockRose so if it goes anywhere near 100 I'll be raiding the piggy bank.
It's sst1 paranoia - understandable I guess. One weirdo is enough for any board.
Welcome all to the heavenly land of HVO. May your investments flourish in the garden of Mo.
I suspect the brief from the IIs (JP Morgan plus whoever) was for the Broker to buy all they could under 30p and then review.
Well it looks to me like they've got all they're going to get at that level. If they want more they'll have look at 32 and then 35.
That's been the trading pattern for the last month or so. Shows that shares are still be collected for IIs off retail.
Free float going down all the time.
Does seem to be. It's starting to look as though there's life in our favourite 'dog'
AA is a major shareholder in Kistos and it's effectively his baby. The only way you'd get him involved in Serica is if you merged the 2 companies.
As said below Serica is out of Kistos' reach now from a straight takeover perspective.
AA will come good.
I enjoyed the ride up (and my sell down) from 110 to 600, although I wish I sold out completely at those dizzy heights, never mind, my memories of Rockrose were too strong.
Sub 150 now would seem to be a perfect level to rebuild a larger position, but is it the bottom? Surely it can't go near the IPO price. We're certainly a million miles from the Employee Incentive Scheme levels, ironically the issue of that timed closely with he beginning of this fall.
One things for sure, AA doesn't sit on his hands. Something will come along soon, or cash will be returned to shareholders in some form.
Maybe another go at Serica?
If I was in your position I'd be averaging down as it's a cracking company. I suspect the same amount invested again will get you to a minimum of breakeven or potentially a small profit on takeover.
If no takeover occurs and it gets to trade normally for the next 5 years you'll be back in the money on your original investment and well up on your new one.
Not advice of course, just what I'd do, subject to having available funds of course.
Don't confuse delisting with a PE (or any) other takeover.
The board with the support of enough shareholders can delist a company at any time (see Brandshield) and then you're in the position of having an illiquid stock or sell out at fire sale prices (which is what they'd like you to do). If you don't sell you'll still receive a dividend and cash if they sell, but you have far less protection and things are far more likely to not end well.
That won't happen here in my opinion. I can't see BC having enough support to simply delist.
BC or ANOther will have to make an offer (when they pass 30%), and that offer will have to be acceptable to the majority of shareholders (excl BC who won't have a vote). I can't see that it will go on the cheap. At the moment BC are picking up as much as they can on the cheap but the rest will cost considerably more.
It could just be that they see a great value investment and they'll stop at 29.9% pending a future buy out by someone else and a great return for them.
...and so it continues again.
28.3% now, getting very close.
I wonder who they managed to get 3.75million shares off at only 56p?
This rubbish is only happening because sst1 is over on HVO trying to trash it endlessly, swamping it with twisted bias and generally spoiling the board.
Nobody from HVO wants to be over here. I know you can't control the idiot (and I feel sorry for you) but it's a simple and only response if LSE won't deal with him.
I wonder if sst1 bought in at 40p. If so, it's not surprising he's so desperate to talk this up so he can sell and recoup some of his cash.
They might well buy in but it will be at the upcoming placing. Why would they buy now at 4p only to be massively diluted, when they'll be able to buy in a few months (or weeks) at 2p.
So many green boxes. So desperate.
One thing that peaked my curiosity is why are they suddenly presenting a 5 year target?
You might project that far ahead internally, but I've not seen it put into open forum often. Most CEOs would simply see it as putting a target on their back, effectively giving critics a stick to beat them with. Mo may well believe it, he may even be confident of it, but why bother telling us? Who's asked for it? Why?
Answers on a post card....
PS - That favourite comment of his surfaced again. Under promise and over deliver.
New information - They have a contracted Option to take a whole new floor at Canary Wharf when needed, and also an admission that they could expand into another country if they want to (so it's obviously been discussed).
Simply put, HVO have got no meaningful competition. As the market grows, they'll accommodate it.
I'm not sure what I can say that won't sound rampy. So I won't. DYOR
Canary Wharf increases the head on turnover capacity to £90-95million, plus Venn is expanding at pace.
Mo never fails to impress me.
If he's forecasting the SP back in the 40s then that's the most sensible thing he's ever said. I'm sure even he can't find negatives in that excellent trading update this morning. He'd be a fool to try, and certainly not credible.
I still can't see in the green boxes anyway. Life is good.