Kistos Holdings Investment thesis
Results of companies

Kistos FY22 results

Kistos presented its 2022 results this week, which were significantly impacted by the imposition of WFT and EPL, resulting in an effective tax rate of 89.6%. In this article, we will focus on analyzing the fine print of the results, trying to understand what may lie ahead, and modeling the company from a conservative standpoint (applying our best understanding to the taxes).

Kistos FY22 results

Pro forma – including full year of GLA (UK acquisition in January 2022 effective since July)

Net Income: €26MM (including Q11-B impairment) + €47MM (They have provisioned the 47MM of taxes for the WFT in the Netherlands, but they believe they don’t have to pay it because less than 75% of their activity comes from the sale of hydrocarbons (which seems surreal since the company is dedicated to that). However, 26% of the profits of the Dutch entity of Kistos are derived from financial products (selling energy produced in GLA – UK through financial products at higher TTF prices than the UK’s NBP).

Note that the tax-effective rate is assuming that the portion from the Netherlands is not returned and the rebates in the UK are not utilized.

Highlights of the year

  • Acquisition of a 20% working interest in the GLA from TotalEnergies (UK)
  • Appraisal well drilled on the Q11-B gas discovery failed to encounter gas in the primary Slochteren target
  • Decision taken to continue utilising the P15-D platform for export in the Netherlands
  • Acquisition of Mime Petroleum (Norway) in 2023


In the 12 months ending December 2022, net production from the Q10-A gas field offshore the Netherlands (Kistos 60% and operator) averaged 4,700 barrels of oil equivalent (boe) per day. This is a decrease compared to the 6,077 boe per day in the first half of 2022, indicating that production in the second half of 2022 was around 3,400 boepd (including maintenance). This highlights the severity of both the decline-related issues and the operational problems with the P15D pipeline. Further drilling campaigns are being evaluated to maintain production in the Q10-A field, but the company has made it clear that they will invest as little as possible in the Netherlands (unlike the UK, there are no tax deductions for capital expenditures).

Production from GLA in 2022 averaged 5,900 boe per day after the acquisition (6,200 boe per day net to Kistos on a pro forma basis). This indicates a significant decline compared to the 6,500 boe per day in the first half of 2022.

The Glendronach Final Investment Decision (FID) is expected in the second half of 2023. It is anticipated that Glendronach will add around 2,100 boepd of production for Kistos during the first two years and then gradually decline, with production expected to cease in 2029-2030.


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