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Interim Results for the six-month
period ended 31 December 2017
Parkmead, the UK and Netherlands-focused independent energy group, is pleased to report its interim results for the six-month period ended 31 December 2017.
Parkmead doubles gross profit and demonstrates financial strength
- Gross profit for the period of £1.4 million (2016: £0.7 million)
- Parkmead is cash flow positive on an operating basis
- Strong total asset base of £75.8 million at 31 December 2017
- Strict financial discipline maintained
- Well capitalised, with cash balances of US$33.0 million (£24.4 million) at 31 December 2017
- Debt free
- Increased volumes at the Diever West gas field
- Low-cost Netherlands gas production provides positive cash flow growth
67% increase in oil and gas reserves
- 2P reserves of 46.3 million barrels of oil equivalent (“MMBoe”) at 1 March 2018, a 67% increase from Parkmead’s 1 March 2017 reserves position of 27.8 MMBoe
- 2C resources increased by 25% to 73.9 MMBoe at 1 March 2018 (59.1 MMBoe at 1 March 2017)
Major progress on valuable development projects; potential Greater Perth Area tie-back
- Significantly increased equity in the Perth and Dolphin oil fields in UK Central North Sea in February 2018, which lie at the core of Parkmead’s Greater Perth Area (“GPA”) oil hub project
- Increased equity in the Perth and Dolphin fields raises Parkmead’s 2P reserves to 46.3 MMBoe
- Parkmead now in full control of the GPA oil hub project with operatorship and 100% equity
- Agreement signed with Nexen Petroleum, a subsidiary of China National Offshore Oil Corporation (CNOOC), to undertake a detailed engineering study for the potential subsea tie-back of the GPA project to the Nexen-operated Scott facilities in the Central North Sea
- Nexen’s Scott facilities lie approximately 10km southeast of Parkmead’s GPA project
- New reservoir study commissioned with AGR Tracs International in relation to well stimulation, which could lead to increasing oil flow rates and oil reserves recovery from the two fields by analysing the effect of fracture stimulation on the reservoir
Doubled gas volumes at Diever West. Gross production reaches 45 MMscfd
- 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
- Average gross production during February 2018 at Diever West was 45.5 million cubic feet per day (“MMscfd”), approximately 7,833 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 has recommenced following compression work
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
- Current oil and gas environment provides a good opportunity to continue the Group’s growth trajectory
Parkmead’s Executive Chairman, Tom Cross, commented:
“I am pleased to report excellent progress in the period to 31 December 2017. The Group has doubled gross profit, through a combination of Parkmead’s increased gas production in the Netherlands and the proactive cost reduction programme in the UK.
We are delighted to have significantly increased production at the Diever West gas field, which builds Parkmead’s cash flow. New reservoir modelling indicates that Diever West could be more than double the size originally expected.
We are also pleased with the major progress made with the Greater Perth Area project. By increasing our stake in the Perth and Dolphin oil fields, Parkmead’s oil and gas reserves grow by some 67%.
The study with Nexen will examine one path to potentially unlock the substantial value of the GPA project for the benefit of the UK and Parkmead shareholders, as well as providing further value for the existing infrastructure partners.
The team at Parkmead is working intensively to evaluate and execute further opportunities which could build value and provide additional upside to the Company. Parkmead is analysing both oil and gas, and wider energy related opportunities, which could broaden and enhance the Group’s revenue stream.
Parkmead is well positioned for the future. 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
Instinctif Partners Limited (PR Adviser to Parkmead) +44 (0) 20 7457 2020
For full details, please find the pdf attached here