Kistos cultivates $263m maiden deal to buy Tulip Oil

Kistos, the AIM-listed investment company set up by RockRose Energy founder Andrew Austin, has agreed its maiden acquisition to acquire Tulip Oil Netherlands in a deal valued at €220 million ($263 million).

Tulip 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, as well as exploration and appraisal projects.

A contingent €163 million will also be payable “on certain development milestones”, said Kistos.

Kistos said the acquisition constitutes a reverse takeover and its shares have been temporarily suspended from trading on AIM, London's junior market.

Upon completion, Hague-based Tulip Oil Holdings will become a shareholder and debtholder in Kistos and will continue to be a 90% shareholder in its German-focused operation Rhein Petroleum.

Kistos said the deal will be funded through a combination of cash, the assumption by Kistos of an existing bond and through the issue of new debt and equity in Kistos.

It expects to carry out an equity placing to existing and new investors and is looking at options for including retail investors.

The buyer will also issue new warrants of €5 million of ordinary shares at a premium of 30% to the price of any equity placing to Tulip.

Kistos said it is working with advisers in Norway to explore the options for the new debt instrument.

Austin, chairman of Kistos, said: “We are very excited to be beginning the next phase of Kistos’ journey with the acquisition of these profitable and cash generative assets.”

The Q10-A field has proven and probable reserves of 19.5 million barrels of oil equivalent and generated total net production of 5470 barrels of oil equivalent per day in 2020.

Both Tulip and Kistos touted the low-carbon nature of the gas production from the assets being acquired.

Kistos raised £31.75 million ($42 million) through an initial public offering in November.

Also on the Kistos board as non-executive directors are Richard Benmore and Julia Barlow, both of whom worked with Austin at RockRose and IGas Energy, and former Ophir Energy chief executive Alan Booth.

Austin made about £66 million after RockRose Energy, which he founded in 2015, announced in July last year it was being bought in a near £250 million deal by privately held Viaro Energy, a London-headquartered subsidiary of energy trading group Viaro.

Tulip chairman Leo Koot said: “We are very proud for our Dutch portfolio to be the foundation of Kistos growth story.

“The Tulip team has built a strong portfolio of producing, development, and exploration assets and has an excellent reputation for exploration successes and on-time and on-budget project delivery.”

Tulip management said they now plan to focus their attention on Rhein Petroleum, which recently drilled the Stieg 1 well.

“We plan to build a material business producing German oil for the German economy with a minimum carbon footprint,” Koot said.

Tulip is being advised by Jefferies International and Stibbe on the transaction.