AIM listed Kistos, the closed-ended investment company which has been established with the objective of creating value for its investors through the acquisition and management of companies or businesses in the energy sector, has entered into a binding share purchase agreement, subject to customary conditions precedent, to acquire the entire issued and outstanding share capital of Tulip Oil Netherlands B.V. ("TON") from Tulip Oil Holding B.V. 

Proposed transaction

• Kistos proposes the acquisition of TON, which, via its wholly-owned subsidiary, Tulip Oil Netherlands Offshore B.V. ("TONO"), 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.
• The total upfront consideration for the Acquisition, subject to completion adjustments, is EUR 220 million. This consideration will be satisfied through a combination of cash, the assumption by Kistos of an existing bond instrument issued by TONO, the issue of a new debt instrument and the issue to the Seller of equity in Kistos.  Kistos will also issue warrants over EUR 5 million of ordinary shares at a premium of 30% to the price of any equity placing to TOH. In addition, contingent consideration of up to EUR 163 million is payable on certain development milestones.
• It is anticipated that the Company will carry out an equity placing to existing and new investors in connection with the Acquisition. The Company is exploring how the Placing can be accessed by retail shareholders. Both the Seller and various Directors of the Company will participate in the Placing.
• The Company is working with debt advisors in Norway to explore the options for the new debt instrument which will be issued as part of the consideration.
• Upon completion of the Acquisition, the Company expects to cease to be an investing company under the AIM Rules for Companies and instead become a trading company. The Group will continue to review acquisition opportunities as they arise.

The completion of the Acquisition is subject to, inter alia:

• certain regulatory consents and confirmations;
• finalisation of the Placing and the debt financing associated with the Acquisition;
• the publication of an AIM admission document;
• shareholder approval of the Acquisition; and
• Admission of the enlarged share capital of Kistos to trading on AIM.

Andrew Austin, Chairman of Kistos, commented:
"We are very excited to be beginning the next phase of Kistos' journey with the acquisition of these profitable and cash generative assets, which have probably the lowest carbon footprint of any production assets in the North Sea. To be producing gas, a vital transition fuel, from normally unmanned platforms powered by solar and wind is exactly what we set out to do. In addition, we see potential for significantly increased production from discovered hydrocarbons within the licences being acquired by Kistos.

"The team at Tulip have done a fantastic job to date in getting this low carbon production operation up and running and we are looking forward to working with them and our partners at EBN in replicating this success and being a model for future low impact developments."

KeyFacts Energy: Tulip Oil Netherlands country profile   l   Kistos UK country profile