Posted: 31/03/21

Parkmead, the independent energy group focused on growth through gas, oil and renewable energy projects, is pleased to report its interim results for the six-month period ended 31 December 2020. 

 

HIGHLIGHTS 

 

Excellent progress on Platypus gas and Greater Perth Area oil projects

 

• Parkmead has agreed in principle to become operator of the Platypus gas project, subject to regulatory approval. It has entered into advanced commercial discussions with the Platypus supply chain, as well as progressing discussions with the OGA and also Perenco UK, in their role as operator of the Cleeton host facility
• CalEnergy Resources is Parkmead’s partner on the project
• Platypus has previously reached some key milestones ahead of its development, including submission of a draft Field Development Plan and Environmental Statement, which are in the process of being updated
• The mid case recoverable gas reserves from Platypus are expected to be 103 billion cubic feet (“Bcf”), with peak gas production of over 60 million cubic feet of gas per day (“MMscfd”) 
• There is potential for additional gas volumes from the adjacent Platypus East structure. These could be tied into the planned Platypus infrastructure 
• Parkmead continues to assess draft commercial offers received from the Scott field partnership for the potential tie-back of the Greater Perth Area (“GPA”)
• Infrastructure studies completed in 2020 have confirmed that there are no technical hurdles to produce Perth oil from the wells all the way through to the onshore facilities 
• Parkmead is also in discussions with other operators in the GPA vicinity where new opportunities have arisen during the year
• Every $10/bbl increase in the oil price adds approximately £130 million to the P50 post-tax NPV of the Perth field development alone

 

Major new UK licence secured and significant progress on large Skerryvore project

 

• Seismic reprocessing work covering the Skerryvore prospect and surrounding area is nearing completion
• This will further mature the collection of prospects 
• Rock physics and inversion studies at Skerryvore will shortly commence after current tendering process
• Skerryvore’s main prospects are three stacked targets, at Mey and Chalk level, which together could contain 157 million barrels of oil equivalent (“MMBoe”)
• Parkmead has accepted the award of Licence P.2516 (Parkmead 50% and operator) containing two undeveloped oil discoveries, Fynn Beauly and Fynn Andrew, as well as an oil prospect in the Piper Formation
• The licence covers Blocks 14/20g & 15/16g situated in the Central North Sea and is adjacent to Parkmead's extensive GPA project
• Fynn Beauly is a very large oil discovery which extends across a number of blocks
• The entire discovery is estimated to contain oil-in-place of between 602 and 1,343 million barrels, with Licence P.2516 containing a section of the discovery to the south holding oil-in-place of between 77 and 202 million barrels
• Fynn Andrew is wholly contained on the licence and holds 50 million barrels of oil-in-place on a P50 basis 
• The addition of these blocks to Parkmead's portfolio adds 34.4 million barrels of 2C resources to the Group

 

Strong financial position and robust producing assets, despite very low gas price environment 

 

• Gross profit achieved of £0.8 million (2019: £0.8 million) despite the historic low gas prices seen in the period, demonstrating the high-quality nature of Parkmead’s onshore Netherlands assets
• Gross profit margin increased to 50% (2019: 38%)
• Well capitalised, with cash balances of US$33.6 million (£24.5 million) as at 31 December 2020, equivalent to 22.4 pence per share
• Substantial total assets of £86.8 million at 31 December 2020 (2019: £88.8 million)
• Net assets remained strong at £68.9 million at 31 December 2020 (2019: £70.1 million)
• Parkmead maintains strict financial discipline with very low operating costs
• Revenue for the period was £1.5 million (2019: £2.1 million) 
• Gas prices fell to historic lows during the period as a result of the market conditions resulting from the COVID-19 pandemic, falling to under €5/MWh
• Prices have recovered very strongly since and have increased to between approximately €16/MWh and €18/MWh during Q1 2021
• Parkmead’s Netherlands assets remain very low cost to operate, with an average field operating cost of just US$9.9 per barrel of oil equivalent

 

Divestment of non-core acreage and acceleration of renewable energy project

 

• Two successful sales of two separate areas of non-core land from UK renewable energy portfolio achieved an aggregate consideration of £4.0 million (with the second sale of £3.3 million being completed post period end)
• Sites with the largest renewable energy potential have been retained and high-graded
• Technical studies are already underway on a  specific location within the Group’s onshore land portfolio for the potential development of a large wind farm
• This area of land lies adjacent to the Mid Hill Wind Farm which encompasses 33 Siemens wind turbines with a generating capacity of around 75 megawatts
• Other renewable opportunities exist across the Group’s asset portfolio
• Parkmead’s early commitment to building a balanced energy business through its focus on gas, widely seen as the primary transition fuel, pre-empted the recent energy transition debate
• Member of OGUK’s Vision 2035 which aims to provide a roadmap to a lower carbon energy mix

 

Robust, high-quality Netherlands portfolio; multiple new opportunities identified

 

• Average gross production for the period across the Group’s Netherlands assets was 32.8 MMscfd, approximately 5,648 barrels of oil equivalent per day (“boepd”)
• Multiple exploration opportunities exist around the Diever field, such as the Boergrup and De Bree prospects, both of which contain stacked targets with similar characteristics to Diever
• A new seismic reprocessing project is being carried out which will help define and high-grade the extensive prospectivity around Diever
• Dynamic reservoir modelling suggests Diever held initial gas-in-place of approximately 108 Bcf, more than double the post-drill static volume estimate of 41 Bcf
• Diever is the 8th highest producing field in the Netherlands to the end of 2020, according to official data
• Concept selection planning at the Papekop oil and gas discovery is continuing, a proven field with 24.2 million barrels of oil-in-place and 39.4 Bcf of gas-in-place

 

Substantial oil and gas reserves and resources

 

• 2P reserves of 45.7 MMBoe as at 1 March 2021 (45.7 MMBoe as at 1 March 2020) 

 

Well positioned for further acquisitions and opportunities

 

• Eight acquisitions, at both asset and corporate level, have been completed to date
• Parkmead is actively evaluating further acquisition opportunities in each of its areas of activity – renewables, gas and oil

 

 

Parkmead’s Executive Chairman, Tom Cross, commented:

 

“I am pleased to report excellent progress in the six-month period to 31 December 2020 across the Group, despite our revenues being impacted by the low gas price environment. Parkmead has made significant advances within its asset portfolio, whilst retaining financial strength. This creates a very good foundation from which to build as the energy sector continues to recover from the COVID-19 pandemic.

 

Parkmead is already taking advantage of the strong position we have achieved, accelerating a number of growth steps since the period end.

 

We are delighted to be moving ahead, in principle, as operator of the Platypus gas development. This has the potential to add significant value to Parkmead.

 

Our team continues to work intensively to evaluate and execute further value-adding opportunities which could provide additional upside for the Group.

Parkmead is well positioned for the future. We have excellent UK and Netherlands regional expertise, significant cash resources, and a growing portfolio of high-quality assets. The Group will continue to build upon the inherent value in its existing interests with a balanced, acquisition-led, growth strategy to secure opportunities that maximise future value for our shareholders.” 

 

 

Enquiries:

 

The Parkmead Group plc+44 (0) 1224 622200

Tom Cross (Executive Chairman)

Ryan Stroulger (Chief Financial Officer)

 

finnCap Ltd  (NOMAD and Broker to Parkmead)+44 (0) 20 7220 0500

Marc Milmo / Emily Watts / Matthew Radley – Corporate Finance

Andrew Burdis / Barney Hayward – ECM

 

See the full statement using the link: Interim Results for the six-month period ended 31 December 2020