Explorer to exploit low oil price
Parkmead raises £13m for North Sea buying spree
It has placed 11.2 million shares at 120p with institutional and other investors.
The company said it has built “a strong platform for future growth and has been actively executing its accelerated strategy to become a key E&P player in the North Sea”.
In a statement it said the last 18 months have proved to be “an excellent period” for Parkmead, which saw strong progress across the group’s growing oil and gas portfolio.
It said a number of enhanced production opportunities are available across Parkmead’s existing Netherlands portfolio which the company intends to capitalise on, with the aim of significantly increasing its net gas production.
Last November Parkmead was awarded six licences covering nine offshore blocks in the UK 28th Licensing Round, which meant that Parkmead ranked fourth in the total number of licences awarded by the government in the first tranche of this licensing round.
The latest awards take Parkmead’s total number of oil and gas blocks across the UK and the Netherlands to 61, with 48 of those operated by the group. These new licences complement Parkmead’s existing asset base of oil and gas production, exploration prospects and the major Perth, Dolphin and Lowlander oil development.
The company said the management team has taken a disciplined approach to guard its financial strength and this has meant that it is funded to meet its current capital commitments and therefore in a good position to capitalise on opportunities that are becoming available as a result of lower oil prices.
“The current environment in the oil & gas sector is undoubtedly generating significant corporate opportunities. There has already been active consolidation in the sector as companies seek to benefit from scale (with one of the largest transactions being Royal Dutch Shell plc’s recommended offer for BG Group plc) and a number of divestments and asset sales as companies are actively reviewing their portfolios and considering exits for their non-core assets.
“In addition, a number of companies are finding themselves in a distressed situation given capital structures that are not suited to the current oil price environment.
The board of Parkmead believes that through its management team’s track record of acquisitive growth, it is well positioned to capitalise on these opportunities in the sector.
“Given Parkmead’s track record and its stated strategy of continued acquisitive growth, the board of directors believe that by adding cash to its balance sheet, Parkmead will strengthen its ability to act expeditiously as and when opportunities arise over the next few months.”
The Placing Price represents a discount of just 1.4% to the closing mid market price of 121.75p per share on Friday, being the last practicable date prior to the announcement of the placing.
Tom Cross, executive chairman (pictured), Ryan Stroulger, finance director and Philip Dayer, non-executive director, will subscribe for 83,333, 20,833 and 33,333 shares, respectively, in the placing.
Following these subscriptions Tom Cross will hold 19.05% of the company, Ryan Stroulger 0.16% and Philip Dayer 0.15%.
Mr Cross said: “The current climate in the oil & gas sector is creating a significant number of opportunities, both at an asset and corporate level. This successful placing has put Parkmead in an excellent position to capitalise on these opportunities.”