Output from the Greater Laggan Area West of Shetland is expected to be “maximised” following the award of licences on new blocks.
Independent North Sea operator Kistos Holdings (AIM:KIST) confirmed its joint venture in the region has been been offered seven new blocks, or part blocks, in the Greater Laggan Area, West of Shetland.
The AIM-listed firm holds a 33.3% interest in the acreage along with French energy giant, TotalEnergies (Paris:TTE), which is currently the operator.
However, Kistos is set to have a new partner in the fields after TotalEnergies sold its oil and gas fields West of Shetland, along with the Shetland Gas Plant, to the Prax Group.
Prax was founded in 1999 by Sanjeev and Arani Kumar Kumar Soosaipillai and also bought Hurricane Energy, operator of the Lancaster oilfield west of Shetland, in a £250million deal last year.
The blocks were awarded as part of the North Sea Transition Authority’s (NSTA) 33rd offshore oil and gas licensing round.
The full list of blocks include 206/2a, 214/27, 214/28a, 214/29a, 214/22a, 214/23a and 214/24a.
The GLA consists of four producing subsea fields – Laggan, Tormore, Glenlivet
and Edradour – that are tied back to the Shetland Gas Plant (SGP).
In a stock market announcement, Kistos said the blocks were applied for during the 33rd Offshore licencing round, with submissions made in January 2023.
TotalEnergies has agreed to sell a 20% stake in a package of West of Shetland assets to Kistos Energy, headed up by former RockRose Energy CEO, in a deal worth more than $165 million.
The firm said the awarded licenses were were “previously held by the GLA JV” prior to Kistos’ acquisition in 2022.
The statement said the award would “extend the life of existing infrastructure and maximise economic output”.
“The award of these blocks, which include the previously identified Ballechin exploration prospect, supports the JV partners’ efforts to identify opportunities to extend the life of existing infrastructure and maximise economic output.
“The work programme includes studies on a seismic dataset that is already owned by the JV partners.”
Panmure Liberium analyst Ashley Kelty noted the Ballechin prospect is estimated to offer more than 100mmboe of prospective resource.
He added: “While it remains too early to determine what prospects may be drilled and the timing thereof, we believe the new licenses could offer significant longer-term potential for Kistos.”
