Kistos Acquires 20% in Greater Laggan Area Offshore Assets from TotalEnergies

Oil and gas firm Kistos has acquired a 20% stake in the Greater Laggan Area producing offshore gas fields in the UK and associated infrastructure alongside various interests in certain other exploration licenses, including a 25% interest in the Benriach prospect, from TotalEnergies.

The completion of the acquisition, first announced in January, marks Kistos’ entry into the United Kingdom Continental Shelf ("UKCS"), adding about 6,000 boe/d (net) to Kistos’ production in 2022, with 2P reserves increasing by 6.2 MMboe. 

"This substantially increases Kistos' total production base to approximately 12,000 boe/d," the company said.

Kistos in January said it would pay a firm consideration of $125 million, as well as two contingent payments, the first one up to $40 million depending on the gas price in 2022, and the second one in the event of the development of discovery on an exploration license.

Kistos has acquired a 20% working interest in the producing Laggan, Tormore, Edradour, and Glenlivet gas fields, located offshore the UK, West of Shetland. The acquisition includes a 20% interest in the undeveloped Glendronach gas field. The Glendronach field was discovered in 2018 and it is anticipated that the development will utilize existing infrastructure a final investment decision is expected later this year.

 The acquisition also includes a 25% interest in block 206/4a, which contains the 638 Bcf (operator's P50 resource estimate) Benriach prospect.

According to Kistos, emissions from the Greater Laggan Area production operations are forecast to be approximately 13 kg CO₂e/boe in 2022, "which is significantly below the North Sea average of 22 kg CO₂e/boe, as estimated in the NSTA’s "UKCS natural gas carbon footprint analysis of 26 May 2020."

Glendronach will be developed via a single production well. The net cost of the project is estimated to be approximately £20 million and Kistos’ share of this expenditure is expected to be subject to the super deduction in the UK's Energy Profits Levy.

Andrew Austin, Executive Chairman of Kistos, said: "We look forward to working with TotalEnergies and our partners within the GLA. The addition of the GLA interest to our portfolio is an important step towards expanding and diversifying our producing asset base in one of the largest gas hubs in the UK. In addition to the immediate significant increase in our daily production, these assets also offer investors significant upside potential from the Glendronach development project and the highly prospective Benriach exploration target. Progression of these two projects is expected to meet the investment criteria for the UK’s recently implemented Energy Profits Levy."

Back in January, it was said that Ffollowing completion of the transaction, TotalEnergies E&P UK Limited would hold a 40% operated interest in the Laggan, Tormore, Glenlivet, Edradour, and Glendronach fields, including infield facilities and the onshore Shetland Gas Plant, alongside partners Kistos Energy Limited (20%), Ineos E&P UK Limited (20%) and RockRose UKCS15 Limited (20%).

Kistos holds the following interests within the GLA:

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