Kistos PLC (AIM:KIST) shares rose 21% to 178.85p this morning after the North Sea-focused energy group unveiled a sizeable move into the Middle East, agreeing to buy stakes in two producing oil and gas areas in Oman.
The company has struck a $148 million deal with Mitsui E&P Middle East to acquire 5% of Block 9 and 20% of Blocks 3 and 4.
These are onshore assets that are already in production, which is why Kistos says the purchase will be cash-generative from day one. The outlay will be funded from existing cash.
The new interests are expected to add 25.6 million barrels of oil equivalent of proven and probable reserves and deliver an extra 9,000 to 10,000 barrels of oil equivalent a day next year. Most of that output (about 91%) is oil, with the rest gas. At roughly $5.80 a barrel of reserves, the price is on the lower side for producing assets.
Andrew Austin, executive chairman, called the deal “a significant milestone” and said it would lift group reserves to 50 million barrels of oil equivalent from the start of next year.
He added that the move provided “a platform for long-term growth and enhanced cash flow” and would increase production to about 20,000 barrels a day in 2026.