Kistos Announces PrimaryBid Offer in Relation to Proposed Acquisition

Source: 4/14/2021, Location: Europe

Kistos, the AIM quoted closed-ended investment company which has been established with the objective of creating value for its investors through acquisitions and management of companies or businesses in the energy sector, is pleased to announce a conditional offer for subscription via PrimaryBid (the "PrimaryBid Offer") of new ordinary shares of nominal value 10 pence each in the Company ("New Ordinary Shares"). The price at which the New Ordinary Shares will be placed will be determined at the end of the bookbuild (the "Issue Price"). The Company is also conducting a placing (the "Placing") and subscription (the "Subscription") of New Ordinary Shares at the Issue Price with institutional and other investors as announced on 12 March 2021.

The Company will use the funds raised from the PrimaryBid Offer, the Placing and the Subscription to form part of the consideration to acquire the entire issued and outstanding share capital of Tulip Oil Netherlands B.V. ("TON") from Tulip Oil Holding B.V. (the "Acquisition"), which was announced by the Company on 12 March 2021. TON, via its wholly-owned subsidiary, Tulip Oil Netherlands Offshore B.V., owns an operating interest in the Q10-A offshore gas field and interests in other fields in the Dutch North Sea, including the Q10-B, Q11-B and M10/M11 discoveries, and other exploration and appraisal projects. Upon completion of the Acquisition, which constitutes a reverse takeover for the purposes of Rule 14 of the AIM Rules for Companies, the Company expects to cease to be an investing company under the AIM Rules for Companies and instead become a trading company.

The PrimaryBid Offer, the Placing and the Subscription are conditional on the New Ordinary Shares to be issued pursuant to the PrimaryBid Offer, the Placing and the Subscription being admitted to trading on AIM, the market of that name operated by London Stock Exchange plc ("Admission"). Admission is expected to be take place during the week commencing 17 May 2021. The PrimaryBid Offer will not complete unless the Placing and the Subscription also complete and Admission is also subject to approval of the Acquisition by Kistos' shareholders ("Shareholders") at a general meeting in accordance with the requirements of Rule 14 of the AIM Rules for Companies.

Acquisition highlights:

· The Acquisition comprises a controlling (60%) interest in the Q10-A offshore gas field together with interests in a suite of offshore exploration and production licences in the Dutch North Sea.

· The Q10-A field has 2P reserves of 19.5 mmboe and generated total net production of 5.47 mboe/d in 2020.

· Q10-A is reliant on solar and wind power. Its carbon emissions from production operations were <10g C02e/boe in 2020 and 17g C02e/boe in 2019. These are significantly below the North Sea average of 21 kg C02/boe. The Acquisition is consequently in line with the Company's strategy to acquire assets with a role in the energy transition.

· Plans for the future developments of the assets being acquired by Kistos utilise wind and solar power, which will make Kistos one of the lowest CO2/boe emitters of Scope 1 emissions from upstream operations in North West Europe.

· The group to be acquired recorded aggregated EBITDA of EUR 30.60 million in the year to 31 December 2020 (2019: EUR 36.27 million) and profit before tax in the same period of EUR 16.27 million (2019: EUR 38.66 million).

· The realised gas price in the year to 31 December 2020 was EUR 11.58/mWh (2019: EUR 12.55/mWh). The realised prices and forward curve imply an average 2021 gas price of EUR 18.30/mWh.

· The Q10-B, Q11-B and M10a/M11 discoveries potentially have in total 78.5 mmboe of 2C resources, each with development plans prepared, and provide material growth opportunities for Kistos going forward

· In addition, TON holds various exploration prospects and appraisal projects that provide optionality and upside to investors across the portfolio.

PrimaryBid Offer

The Company values its retail investor base and is therefore pleased to provide private and other investors the opportunity to participate in the PrimaryBid Offer by applying exclusively through the PrimaryBid mobile app available on the Apple App Store and Google Play. PrimaryBid does not charge investors any commission for this service.

The PrimaryBid Offer, via the PrimaryBid mobile app, will be open to individual and institutional investors immediately following the release of this announcement. The PrimaryBid Offer will close at 10.00 a.m. on 19 April 2021. The PrimaryBid Offer may close early if it is oversubscribed.

The Company, in consultation with PrimaryBid, reserves the right to scale back any order at its discretion. The Company and PrimaryBid reserve the right to reject any application for subscription under the PrimaryBid Offer without giving any reason for such rejection.

No commission is charged to investors on applications to participate in the PrimaryBid Offer made through PrimaryBid. It is vital to note that once an application for New Ordinary Shares has been made and accepted via PrimaryBid, an application cannot be withdrawn.

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