RE: SP18 Jan 2022 11:28
Cane,
Kistos acquired the assets in late May 2021, and therefore the interim results only reflect 1 month of production. A loss was made purely because of financing and transaction costs. If you look at proforma results, a modest profit was made. Since then, production has been increased since September and gas prices have rocketed. I estimate that there were days last month where Kistos made £1.2m net. Expect year end results to be very strong and have a very high yield.
Production costs are very low at less than EUR5/Mwh. With the current gas price around EUR80/Mwh that's a profit margin of 94%. Costs are so low that if the gas price were to completely crash Kistos will still make a profit, while everyone else in the North Sea will be loss-making. The gas from the field also has an incredibly low carbon footprint.
Then there are the other development reserves. I did some modelling on it and they could be worth upward of £1bn - hence why people are awaiting the imminent drill results.
Finally, there is future deal flow. Kistos are always looking at deals and are currently in negotiations on several assets. Kistos have stated that they are able to fund both Capex commitments and acquisitions out of current cash flows without any additional financing. AA record at making deals is very strong (RockRose: 42x in 4 years)
I don't believe the market has yet fully grasped the current value and potential of Kistos