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Parkmead shares soar on maiden full year profit

Shares in Parkmead, the oil group headed by Tom Cross, soared by between 7% and 8% in early trade after unveiling its first full year profit and stating that it is now well place to become a key player in the North Sea.

The company made two key acquisitions and two gas discoveries during the year and was awarded more licences in the region.

It reported a maiden full year profit after tax of £1.2 million against a £5.6m loss last time on revenues up 506% from £4.1m to £24.7m. Gross profit doubled from £1.6m to £3.2m.

The figures will give faithful shareholders some reassurance that they have been wise to stick with the company which Cross promised to turn into another major oil and gas explorer.

Cross made £37m from his shareholding in Dana Petroleum which he launched 20 years ago and sold in 2010 to the Korea National Oil Corporation for £1.9 billion.

His appointment that same year as chairman of the fledgling Parkmead investment group prompted investors to pile into the company in the belief that he could repeat the same experience. Shares rose 85% on the announcement of his appointment.

However, shares in the company have tumbled this year to trade at near their year low, exacerbated in recent weeks by the fall in the oil price.

Parkmead’s figures for the year ended 30 June show the group has made significant progress in production and developments. In the year it has been

 ·      awarded five additional oil and gas blocks in the UK 27th Licensing Round, resulting in a total award of 30 blocks across the North Sea, West of Scotland and West of Shetlands

·      made two new gas discoveries, at Pharos in the UK Southern Gas Basin and Diever West onshore the Netherlands

·      completed a site survey at the Skerryvore oil prospect in the Central North Sea, ahead of exploration drilling planned for 2015.

Since the year end the company has been awarded licences in the UK 28th licensing round, gaining stakes in six new licences, spanning nine blocks across the Central and Southern North Sea. These new licence awards take Parkmead’s total number of oil and gas blocks across the UK and the Netherlands to 61, with 48 of these being operated by the group.

The company completed the acquisition of Lochard Energy Group in July 2013, providing Parkmead with its first UK oil production. It also completed the acquisition of an additional 20% interest in the Athena oil field from EWE VERTRIEB in April this year, trebling the group’s UK production, revenue and cash flow.

It said it had made “excellent” progress with the Perth Dolphin Lowlander oil hub project.

Its total assets grew 139% from £53.4m to £127.4 million and raised $66m in January this year to fund continued growth. The company has cash balances of £46.3m and is continuing to explore ways of increasing its financial strength.

Cross said:  “I am pleased to report another excellent year of progress. Parkmead has significantly increased its production base, providing major growth in revenue and cash flow. The company has also recorded its first full year of profit, marking an important milestone.

“These key achievements have been delivered through two important acquisitions, one corporate and one asset, both of which secured increases to Parkmead’s oil production. These new interests complement Parkmead’s existing oil and gas portfolio.

“The company also delivered successful drilling results with two new gas discoveries in the UK and the Netherlands, providing valuable near-term development opportunities. Parkmead was delighted to be awarded six new licences through the recently announced UKCS 28th licensing round, spanning nine attractive offshore blocks.

“Parkmead now has a strong platform from which to become a key E&P player in the North Sea, and we look forward to updating shareholders as we continue to grow into 2015 and beyond.”

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