Posted: 18/11/16

Parkmead, the UK and Netherlands focused oil and gas group, is pleased to report its preliminary results for the year ended 30 June 2016.

 

HIGHLIGHTS 

 

Successful fast-track development. Substantial increase in gas production

 

• Increased Netherlands gas production more than six fold
• First commercial gas production achieved at the Diever West gas field in the Netherlands, following a successful fast-track development
• Gas production has continuously outperformed expectations, averaging approximately 34 million cubic feet per day during June 2016 (approximately 5,850 barrels of oil equivalent per day)
• Diever West field brought onstream within just 14 months of discovery
• Low-cost onshore gas portfolio in the Netherlands produces from four separate gas fields with an average operating cost of US$14 per barrel of oil equivalent, ensuring that Parkmead is cash flow positive on an operating basis
• Further production enhancement work planned on Parkmead’s Netherlands portfolio, including a new well at the Geesbrug gas field to maximise production, serving as a natural hedge to the current low oil price environment

 

Attractive new licence awards strengthen asset base

 

• Awarded a new oil and gas licence in the West of Shetland area, targeting the Sanda North and Sanda South prospects which have the potential to contain 280 million barrels of recoverable oil on a most likely, P50 basis 
• New West of Shetland licence completes Parkmead’s total award of six new oil and gas licences in the UKCS 28th Licensing Round, covering 10 offshore blocks
• Detailed technical work undertaken this year has allowed Parkmead to release non-core acreage, considerably reducing licence costs  

 

Major progress on valuable development projects. Additional licence acquisitions

 

• New minimal platform concept at the Platypus gas field further increases the attractiveness of the development 
• Doubled stake in the Polecat and Marten oil fields in the Central North Sea in August 2016, which are jointly estimated to hold over 90 million barrels of oil in place
• Increased stake in the Perth and Dolphin fields to 60.05% in September 2016, building Parkmead’s oil reserves
• Perth and Dolphin are at the core of Parkmead’s Perth-Dolphin-Lowlander (PDL) oil hub project which has been fully appraised, with a combined total of 13 wells drilled, and has expected recoverable reserves of approximately 80 million barrels of oil 
• The Polecat and Marten fields have the potential to be highly valuable to Parkmead as, given their close proximity to PDL, they could be jointly developed as part of the Greater PDL Area project 

 

Increasing oil and gas reserves and resources

 

• Considerable 2P reserves of 27.9 million barrels of oil equivalent as at 30 September 2016, a 19% increase from Parkmead’s 31 December 2015 reserves position of 23.5 million barrels of oil equivalent 
• 2C resources increased by 41% to 59.1 million barrels of oil equivalent as at 30 September 2016 (41.9  million barrels of oil equivalent at 31 December 2015)

 

Well positioned for further acquisitions 

 

• Six acquisitions, at both an asset and corporate level, have been completed to date
• The Parkmead team is evaluating further acquisition opportunities to take advantage of the current low oil price environment 

 

Financial Strength 

 

• Strong total asset base of £87.5 million at 30 June 2016
• Parkmead maintains strict financial discipline
• Well capitalised, with cash balances of US$37.9 million (£28.3 million) as at 30 June 2016
• Parkmead remains debt free
• Since January 2016, Parkmead has been cash flow positive on an operating basis 
• All revenues from Netherlands gas production received in Euros, mitigating recent currency fluctuations 

 

Parkmead’s Executive Chairman, Tom Cross, commented:

 

“I am pleased to report an excellent year of progress for Parkmead, despite the challenges of the low oil price environment. Parkmead discovered and brought onstream a new gas field at Diever West, in the Netherlands, within just 14 months. This field is delivering profitable gas production and important additional cash flow to the Group. 

 

Parkmead is increasing the Group’s gas production in the Netherlands through a low-cost, onshore work programme. This acts as a natural hedge to low global oil prices. 

 

The Group’s reserves and resources have significantly increased in 2016 through two licence acquisitions. Parkmead has strengthened its position around the important PDL oil hub in the UK North Sea. 

 

Our new licence awards in the 28th Round were an outstanding result for Parkmead, with 10 new offshore oil and gas blocks awarded to the Group. We are delighted with the new award in the West of Shetland region targeting two prospects, Sanda North and Sanda South. West of Shetland is an area we understand well and has the potential to add major value to the Company.

 

Parkmead is well positioned to take advantage of the ongoing lower oil price environment, and the opportunities that are arising from this. 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 licensing and 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

 

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

David Simonson

George Yeomans

 

For full details please find the pdf version here