Sale of
Parkmead (E&P) Ltd

Posted: 12/12/24

Sale of Parkmead (E&P) Ltd

Parkmead, the independent energy group focused on growth through gas, oil and renewable energy projects, is pleased to announce the signing of an agreement to effect the sale (the “Sale”) of its wholly owned subsidiary, Parkmead (E&P) Ltd (the “Subsidiary”), to Serica Energy (UK) Ltd (“Serica”).

 

The Subsidiary currently holds Parkmead’s UK offshore oil licences together with its Netherlands onshore gas licences. The Netherlands asset portfolio is excluded from the scope of the transaction and will be retained by the Group.  Therefore, Parkmead is retaining 100% of its revenue producing assets, which comprise its Dutch natural gas fields and its UK wind farm, all of which are onshore.

 

The consideration for the Sale being received by Parkmead consists of £14 million of firm cash consideration and up to £120 million of contingent cash consideration, payable as follows:

 

A summary of the consideration being received is below:

Consideration Overview

 

Initial Payment

£5m

Deferred Payments

£9m

Total Firm Consideration

£14m

 

 

Contingent Skerryvore Payment

Up to £30m

Contingent Fynn Beauly Payment

Up to £90m

Total Contingent Consideration

Up to £120m

Total Consideration (Firm & Contingent)

Up to £134m


Completion is subject to the fulfilment of certain conditions, including the receipt of NSTA approval to the change of control of the Subsidiary, and the completion of a Parkmead intragroup transfer of the Company’s licence interests in the Netherlands between two Parkmead subsidiaries.  These conditions are anticipated to be satisfied in the first half of 2025. As reported in Parkmead’s full-year audited results, on 30 June 2024 the Subsidiary had £197 million in carried forward ring-fence corporation tax losses.  For the year ended 30 June 2024, the Subsidiary (excluding the retained Netherlands assets) contributed a profit before taxation of £6,000 reflecting net cash credits received from JV partners. As at 30 June 2024, the net assets of the Subsidiary (excluding the retained Netherlands assets) was £1,063,000.

 

Following Completion, Parkmead will continue to hold all its other energy assets.  These include its revenue generating portfolio of onshore gas fields in the Netherlands and, in the UK, its operated Kempstone Hill Wind Farm and its potential solar and wind energy development projects at Pitreadie. 

 

Rationale for the transaction

 

Parkmead has been carefully considering the outlook for its UK North Sea oil licences, and the potential capital requirements needed were they to be progressed through appraisal and development. The offshore sector is facing continuing challenges in the form of the current political environment towards UK oil & gas, and the focus of the UK Government on its Net Zero Strategy. In this context, Parkmead believes that the opportunity to progress these UK North Sea oil licences would be best served within the portfolio of a larger, North Sea focused company, enabling Parkmead to apply its expertise and the Company’s resources on growing its Netherlands gas assets and its projects in renewable energies.

 

This transaction therefore represents an excellent result for Parkmead shareholders, for the following key reasons:

 

Future Strategy

 

 

Parkmead’s Executive Chairman, Tom Cross, commented:

 

“I am delighted to announce this important transaction for Parkmead.  Through the sale of these UK offshore oil licences we have no further capital investment requirements, whilst retaining a very attractive share of the upside should any developments at Skerryvore or Fynn Beauly proceed.  The addition of the near-term, firm £14 million cash consideration, together with Parkmead’s existing cash, means the Group is well-funded to pursue the next phase of its growth plans in natural gas, renewable energies and international E&P.”

 

Gneiss Energy Limited is acting as financial advisor to Parkmead on the Sale.

 

The Parkmead Group plc

+44 (0) 1224 622200

Tom Cross (Executive Chairman)

 

Andrew Smith (Executive Director – Business Development)

 

 

 

Gneiss Energy Limited – Financial Advisor

+44 (0) 20 3983 9263

Jon Fitzpatrick / Paul Weidman

 

 

 

Cavendish Capital Markets Limited

+44 (0) 20 7220 0500

Marc Milmo / Seamus Fricker – Corporate Finance

 

Iain MacArthur – Sales