The company experienced financial difficulties but its proactive future plans demonstrate its goal to strengthen its presence in the UK, Norway, and Netherlands energy sectors.

Financial Performance

The fiscal year ending December 31, 2024, saw Kistos record earnings per share (EPS) at -0.325 pence. Adjusted EBITDA for the company declined to $95 million from the previous year's $130 million because of ongoing capital investments and decreased earnings. The statutory post-tax loss amounting to $52 million was affected by both a $34 million impairment charge and a $26 million non-cash currency loss.

At year-end, Kistos reported cash reserves amounting to $114 million without $29 million designated as restricted funds. However, the company also faced an increase in net debt to $52 million, which contrasts with the previous year's positive net cash balance of $62 million. The company allocated $144 million towards its capital expenditures, which supported growth projects like the Balder Future initiative.

Strategic Acquisitions and Expansion

Through a series of strategic acquisitions, Kistos has worked to enhance its portfolio strength. Key moves during the period included:

• EDF Onshore Gas Storage Assets Acquisition (April 2024): Kistos increased its reach in the UK midstream market by purchasing storage facilities at Hill Top Farm and Hole House in Cheshire. After successful testing improvements, the working gas capacity at Hill Top Farm expanded by 24% post-acquisition.
• Mime Petroleum AS Acquisition (May 2023): The acquisition on the Norwegian Continental Shelf enhanced Kistos's upstream capacity and enabled the company to participate in the Balder Future initiative.
• Greater Laggan Area (GLA) Acquisition (July 2022): The UK North Sea strategic investment purchased from TotalEnergies has become a pivotal driver for robust production rates.

Operational Highlights

Kistos achieved its guidance targets with an operational average production rate of 8,050 barrels of oil equivalent per day (boepd) throughout FY2024. The company concluded the year with 24.4 MMboe in 2P reserves and 57.5 MMboe in 2C contingent resources, demonstrating a solid and varied asset portfolio.

The Balder Future project reached its post-period milestone with the Jotun FPSO's successful sail away. The project aims to deliver the first oil by Q2 2025 and could increase gross production to 110,000 boepd in the latter part of the year.

Kistos maintains its focus on augmenting gas storage capacity with ongoing engineering projects at the Hole House site to reinforce its strategy of expanding midstream operations.

Future Outlook for FY2025

Kistos confirms its expected production range for FY2025 at 8,000–9,000 boepd while anticipating first oil from the Balder Future project by mid-year. The drilling of six Phase V wells in the Balder Area is currently active, with the company expecting initial production to start before the end of the year. The company's strategic developments enable Kistos to achieve substantial cash flow growth and production capacity expansion while prolonging its Balder assets' operational lifespan to 2045 and beyond.

Kistos continues to seek merger and acquisition opportunities as part of its growth strategy. The company analyses potential entry into new markets to diversify its portfolio and generate immediate shareholder value.

Implications for Investors

The performance of Kistos demonstrates its commitment to aggressive growth-driven strategies even when the company reports negative EPS and statutory losses. The combination of strategic acquisition investments and operational efficiency suggests that the company will maintain strong performance in the future. The increasing net debt, combined with dependency on prompt project completion for initiatives such as Balder Future, exposes the company to significant risks.

The potential returns from its expanded production activities and various revenue sources attract investors interested in the upstream and midstream sectors of the energy market. Gas storage expansion efforts match the increasing European need for energy security.

Strategic Positioning in the Energy Landscape

Andrew Austin, Executive Chairman, emphasised Kistos achieved strong production in FY2024 despite project timeline challenges while meeting their guidance targets. Our midstream operations gain power from strategic additions like Hill Top Farm and Hole House, enabling Balder Future to lead us toward long-term growth.

Austin expressed the company's dedication to creating value through internal expansion and acquisitions and its exploration of opportunities in current and emerging markets.

Summary

Kistos PLC's FY2024 results demonstrate strategic investments and foundational growth throughout the year despite sacrificing short-term profitability. Investors find Kistos attractive due to its high growth prospects and the typical risks associated with resource-heavy energy projects.

The company's success during FY2025 relies on operational execution, M&A activities, and market dynamics management to generate significant shareholder returns.