Posted: 31/03/23

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 2022.

 

HIGHLIGHTS

 

Strong operating cashflow, delivered through low-cost onshore gas production

 

• Revenue more than doubled to £11.1 million for the period (2021: £4.6 million) as the Company benefited from robust production through a sustained period of high gas prices
• Net cash generated from operating activities rose strongly, by over 400% to £8.6 million (2021: £1.7 million) equivalent to 8.0 pence per share
• Gross profit increased to £9.8 million (2021: £3.8 million) generating a gross margin of 89%
• Strong gross profits were nevertheless offset by a £4.8 million tax charge, principally arising from Netherlands operations, and a £4.0 million windfall tax charge expensed during the period but due for payment in May 2024
• Average realised gas price throughout the period of €153.04/MWh
• Average field operating cost in the period of just US$8.6 per barrel of oil equivalent, generating strong operating cash flows
• Strong balance sheet with cash balances of £19.2 million (2021: £24.1 million) as at 31 December 2022, equal to 17.6 pence per share
• An impairment of £12.7 million was recorded during the period relating to licence P1293, following the decommissioning of the Athena field
• Net loss before impairment charge of £1.2 million (2021: £0.4 million)
• Total assets of £70.3 million at 31 December 2022 (2021: £80.5 million)

 

Successful exploration drilling campaign and robust production in the Netherlands

 

• LDS-01 successfully encountered new commercial gas columns in the primary target horizons
• Tie-in of LDS-01 is complete with first gas expected imminently 
• Both LDS-01 and LDS-02 were drilled safely, on time and under budget
• LDS-02 did not encounter commercial volumes of hydrocarbons in the targeted intervals however the well has been suspended and is being assessed for reuse as a side-track into nearby targets
• Average gross production for the period across the Group’s Netherlands assets was 18.0 MMscfd, approximately 3,205 barrels of oil equivalent per day (“boepd”)
• Papekop field development has made significant progress in recent months, as the joint venture aims to accelerate the project

 

Well planning activities underway on the exciting Skerryvore exploration targets

 

• Well and site survey planning work has commenced with a rig tendering process due to start in Q2 2023
• An extensive tender process was completed in January 2023 for the well management services and the contract was awarded to Exceed Energy, an industry-leader in well management and performance solutions 
• Parkmead increased its equity in Skerryvore to 50%, and progressed the project to Phase C as Licence Exploration Operator with strong industry partners
• Skerryvore consists of stacked light oil prospects at Mey and Tor intervals

 

UKCS 33rd Offshore Oil & Gas Licensing Round

 

• Parkmead, as one of the leading UK independents, remains committed to the UKCS oil and gas industry and made selective applications in the UKCS 33rd Offshore Oil and Gas Licensing Round, the outcome of which will be known later in 2023

 

Record revenue delivered from Kempstone Hill Wind Farm

 

• Revenue of £343,000 in the six months to 31 December 2022
• 245% increase in average exported power price realised
• Over 95% uptime achieved during the period
• Greencat Renewables have been appointed to review methods of increasing electricity generation and utilising spare generation capacity at the Kempstone Hill 
• Kempstone Hill Wind Farm provides power for up to 1,000 homes and has an attractive inflation-linked, Feed-in Tariff through until 2036
• Electricity is sold through a power purchase agreement which provides valuable upside through strong wholesale electricity prices

 

Multiple new renewable energy projects under consideration

 

• Environmental studies are ongoing at Pitreadie which are expected to form part of a major wind farm planning application
• Parkmead is also conducting a scoping study on a new site in Scotland which has the potential for a solar farm

 

Substantial oil and gas reserves

 

• 2P reserves of 45.5 MMBoe as at 1 March 2023 (45.6 MMBoe as at 1 March 2022)

 

Well positioned for further acquisitions and opportunities

 

• 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 that strong operating performance has been achieved by Parkmead in the six-month period to 31 December 2022. 

 

In line with our strategy, Parkmead now benefits from stable revenue generated by clean, renewable sources, onshore Scotland. This is in addition to our high-quality onshore gas assets across the Netherlands. 

 

The Group has achieved an increase in revenue of over 140% on the prior year period, and outstanding growth in net cash generated from operating activities of over 400%.

 

Parkmead’s successful drilling campaign in the Netherlands has resulted in the LDS-01 well encountering new commercial gas volumes. This well has been swiftly tied into production infrastructure, with first gas due imminently.

 

We continue to maintain strict financial discipline across all our existing energy projects. This is in addition to the ongoing evaluation of acquisition opportunities that will complement the Group and maximise shareholder value.”

 

Enquiries:

 

The Parkmead Group plc       +44 (0) 1224 622200

 

Tom Cross (Executive Chairman)

Ryan Stroulger (Finance Director)

Henry Steward (Group Commercial Manager)

 

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

 

Marc Milmo / Seamus Fricker - Corporate Finance

Andrew Burdis / Barney Hayward - ECM

 

 

Please see the full pdf version of the announcement here, or in the Financial Reports section of the website.