WTI (Sep) $82.61 -46.70, Brent (Sep) $88.36 -$8.42, Diff -$5.75 -$1.72.

USNG (Sep) $2.77 -10c, UKNG (Aug) 136.63p, TTF (Sep) €56.425 -€5.525.

Oil price

Oil is down another two bucks this morning after Donald Trump said on Air Force One that the ceasefire was ‘requested by Iran and its surrogates’ and there fore he would give it a chance. Now if you believe some reports it means that his forces in the Gulf get a chance to restock weapons and missiles, if you are less sceptical he sees the breach of $100 oil as having an unfortunate knock-on to domestic inflation and interest rate worries ahead of the mid-term elections in November. TACO?

Kistos

Kistos has provided an operational and unaudited financial update for the H1 2026 period, ended 30 June 2026.

Highlights

Production and reserves

·    H1 2026 pro forma production(1) of 20,500 boepd

·    Guidance for FY26 pro forma production(1) is maintained at 19,000 – 21,000 boepd

·    Pro forma 2P reserves(2) of 47.6 MMboe (which equates to a 65% reserves replacement ratio in the first 6 months), following the sanctioning of the Balder Next project in June 2026, 2C resources are estimated at 52.4 MMboe (Company Estimates)

Operational and corporate

·    Strong operational uptime across the Company’s asset portfolio

·    GLA and Balder FPU carried out their planned shutdowns during H1 2026. Additionally, the planned shutdown of the Jotun FPSO is due to be completed by the end of July

·    The FPSO debottlenecking project is well underway, which will look to increase processing capacity and operational flexibility, allowing for the removal of the Balder FPU in 2028

·    With Balder Phase V drilling now complete, the COSL Pioneer has commenced drilling the single Phase VI trilateral well, while the King well has been drilled from the Ringhorne platform. Both wells are expected to be brought on production during H2 2026.

·    Successful transition of operatorship of the Greater Laggan Area to Serica Energy paves the way for significant organic growth opportunities to extract near-term value from infill drilling and the development of further third-party tie-backs to the Shetland Gas Plant 

Oman Update

·    Completion of the acquisition of Blocks 3&4 in Oman is progressing, with all necessary approvals obtained, including Ministerial Approval, with completion expected following the issuance of the Royal Decree

·    Progress on the completion of Block 9, Oman, which is under a different EPSA framework, continues to progress smoothly and is expected later in H2 2026

·    Both Blocks 3&4 and Block 9 have a 1 January 2025 effective date

·    During H1 2026, the Block 9 Joint Venture signed an amendment to the EPSA with Oman’s Ministry of Energy and Minerals. The revised agreement came into effect on 1 July 2026, following ministry approval, which looks to enhance production and supports future reserves growth

Financial Update

As at, and for the 6 months ended 30 June 2026:

·   Pro forma EBITDA(3) of approximately $205 million; on a non-pro forma basis EBITDA was approximately $155 million

·   Average realised prices of $104/bbl for oil and 97p/therm for gas

·   Cash of $259 million(4), including near cash equivalents (compared to $179 million as at 31 December 2025)

·   Adjusted net debt(5) of $23 million

Andrew Austin, Executive Chairman of Kistos, commented: 

“We have generated a significant amount of cash in H1, supported by a period of strong operational performance in the first half of the year across our asset portfolio, and keeping us on track to achieve our production guidance of 19-21 kboepd in 2026. The sanction of Balder Next in June has further added to our 2P reserves which, with the addition of our new interests in Oman, have more than doubled in the past year.

We are on track to realise organic growth opportunities across the portfolio, with the further development of the Balder area and the potential within the GLA, now under new operatorship, to extract near-term value from infill drilling and tie-backs to the Shetland Gas Plant and the enhancement to Block 9’s EPSA terms.

We continue to see a range of M&A opportunities across our core geographies, we continue to focus on value accretive opportunities, and believe our track record and ability to execute transactions makes us an attractive counterparty to work with.”

No surprise here that Kistos has provided yet another excellent operational update in this interim period and of course with energy prices being elevated they have indeed ‘generated a significant amount of cash in H1’. 

This means that production guidance of 19-21 kboepd for this year is ‘on track’ and with the opportunities detailed in this update all looking exceptional all is looking good on this front, I expect good long-term growth across the portfolio.

They mention Balder Next offering further development, the GLA potential under new operatorship giving the likely ‘extraction of near-term value from infill drilling and tie-backs to the Shetland Gas Plant and enhancement to Block 9’s EPSA terms’.

It also wouldn’t be Kistos if it didn’t suggest that they are looking at a range of M&A opportunities and they will always be looking at ‘value accretive situations and of course they have ‘an excellent track record and ability to execute transactions which make them an attractive counterparty to work with’…

Kistos have performed well as one might expect, at 269p the shares are up over 4% this morning to go with the 11% rise m/m, up 20% over 6 months and 95% year on year. My target price of 500p still stands and inclusion in the upcoming Bucket List update which is imminent is assured. 

(1)  Pro forma production figures for the 6 months ended 30 June 2026 include production from the Oman Acquisition as if the acquisition of Blocks 3&4 and Block 9 had completed on 1 January 2026. 

(2)  Pro forma reserves and resources figures as at 30 June 2026 include the Oman Acquisition as if the acquisition of Blocks 3&4 and Block 9 had completed on 1 January 2026. 

(3)  Pro forma EBITDA is defined as Group results as if the Oman Block 3&4 and Block 9 acquisitions had completed on 1 January 2026, based on draft results provided by the seller.

(4)  Includes $95 million in escrow for the acquisition of Blocks 3&4 in Oman (31 December 2025 $30 million) and $36 million of near-cash receivable (31 December 2025 $32 million), assuming receipt of the 2025 Norwegian tax rebate as at 30 June 2026.

(5)  Adjusted net debt of $23 million is defined as $304 million face value of interest-bearing debt, less $259 million of cash and near-cash equivalents, $15 million of restricted funds and a $7 million prepayment for a new acquisition. 

 Sir Ian Wood

RIP Sir Ian Wood, one of the best and apart from effectively founding the Wood Group which became a legendary company in the oil service company sector was a huge benefactor for youth opportunities at the Robert Gordon University in Aberdeen and elsewhere. 

And finally…

Not much today so the big event without doubt is the big invitational match which kicks off Guildford cricket week as the GCC take on the MCC at the home of cricket, Woodbridge road….