Posted: 17/11/17

Parkmead, the UK and Netherlands focused independent energy group, is pleased to report its preliminary results for the year ended 30 June 2017.

 

HIGHLIGHTS 

 

Parkmead delivers full-year gross profit and demonstrates financial strength 

 

• Gross profit for the period of £1.2 million (2016: £4.6 million loss) 
• Strong total asset base of £82.2 million at 30 June 2017 
• Maintains strict financial discipline
• Well capitalised, with cash balances of US$34.3 million (£26.4 million) as at 30 June 2017
• Debt free
• Low-cost Netherlands gas production provides positive cash flow to Parkmead
• All revenues from Netherlands production received in Euros, mitigating recent currency fluctuations 

 

Doubled gas volumes at Diever West. Significant increase in gas production

 

• New dynamic reservoir modelling suggests Diever West has approximately 108 billion cubic feet (“Bcf”) of gas-in-place volumes, more than double the post drill static volume estimate of 41 Bcf
• The Group has substantially increased production from its Diever West gas field by perforating the Akkrum reservoir formation 
• Gross production at the end of October 2017 at Diever West was 39.3 million cubic feet per day, approximately 6,764 barrels of oil equivalent per day (“boepd”)
• Low-cost onshore gas portfolio in the Netherlands produces from four separate gas fields with an average operating cost of just US$10 per barrel of oil equivalent, generating positive cash flows 
• Further production enhancement work planned on Parkmead’s Netherlands portfolio, including a new well at the Geesbrug gas field to maximise production and early development planning at the Ottoland discovery 
• Production at the Brakel field is set to recommence within the next few months following compression work that is currently being undertaken

 

Major progress on valuable development projects. Additional licence acquisitions

 

• Doubled stakes in the Polecat and Marten oil fields to 100% in the UK Central North Sea, which are jointly estimated to hold over 90 million barrels of oil in place
• Increased stakes in the Perth and Dolphin oil fields to 60.05%, building Parkmead’s oil reserves
• Greater Perth Area (“GPA”) invitation to tender announced to the service provider market, covering the pre-FEED, FEED and subsequent development phases of the project 
• 13 alliance submissions received from 35 companies across all project components of drilling, subsea construction and export route options
• In discussions with a number of leading, international service companies and oil companies 
• Parkmead has received financial proposals for significant parts of the development, reducing the capital expenditure needed to bring the project onstream
• New minimal platform concept at the Platypus gas field further increases the value of this development 
• The Platypus joint venture group is working towards optimising the export route for Platypus ahead of an offtake agreement, with various export options available given the availability of infrastructure in the UK Southern Gas Basin
• Acquisition of a 50% interest in UK North Sea Licence P.2209 covering the Farne Extension prospect and a further four prospective leads, potentially containing 175 Bcf of gas initially in place on a most likely, P50 basis 

 

Substantial oil and gas reserves and resources

 

• Net 2P reserves of 27.7 million barrels of oil equivalent as at 30 September 2017 
• Net 2C resources of 62.0 million barrels of oil equivalent as at 30 September 2017

 

Well positioned for further acquisitions 

 

• Seven acquisitions, at both an asset and corporate level, have been completed to date
• Parkmead evaluating further acquisition opportunities and prioritising those that provide growth

 

Parkmead’s Executive Chairman, Tom Cross, commented:

 

“2017 has been an important year of progress for Parkmead. The Group moved into gross profit as a result of increased gas production and the cost reduction programme in the UK. This is an outstanding achievement for Parkmead at a time when global oil prices have remained low.

 

Parkmead’s gas production acts as a natural hedge in the challenging oil price environment.

 

We are delighted to have significantly increased production at the Diever West gas field, which increases Parkmead’s cash flow. New reservoir modelling indicates that Diever West could be more than double the size originally expected.

 

We are also pleased to have been able to increase our stakes in core areas of the Group’s portfolio during the year, particularly around the Greater Perth Area oil hub in the UK North Sea, where Parkmead has strengthened its position. The Group is in discussions with leading, international service companies and oil companies with regards to the Greater Perth Area.

 

The team at Parkmead is working intensively to evaluate and execute further value-adding opportunities which could provide additional cash flow to the Company. Parkmead is analysing both oil and gas, and wider energy sector opportunities, which could broaden and enhance the Group’s revenue stream.

 

Parkmead is well positioned for growth. We have excellent regional expertise, significant cash resources, and a growing, low-cost gas portfolio. The Group will continue to build upon the inherent value in its existing interests with a balanced, acquisition-led growth strategy, securing opportunities that maximise long-term value for our shareholders.”

 

 

For enquiries please contact: 

 

The Parkmead Group plc    +44 (0) 1224 622200

Tom Cross (Executive Chairman)

Ryan Stroulger (Chief Financial Officer)

 

Panmure Gordon (UK) Limited

(Financial Adviser, NOMAD and Corporate Broker to Parkmead)   +44 (0) 20 7886 2500

Adam James

James Greenwood

Atholl Tweedie

 

Instinctif Partners Limited (PR Adviser to Parkmead)   +44 (0) 20 7457 2020

David Simonson

George Yeomans

 

 For full details please find the pdf version attached here