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Explorer expands in North Sea

Parkmead doubles stake in two oil fields

Tom CrossParkmead, the Aberdeen-based oil explorer and producer headed by tycoon Tom Cross, has doubled its stake in the Polecat and Marten oil fields in the UK Central North Sea. 

The company secured its first 50% interest in these blocks as part of the UK 28th Licensing Round awards, when it won nine new oil and gas licences covering 12 offshore blocks.

The Polecat and Marten fields lie approximately 20km east of the significant Buzzard field, and are located close to Parkmead’s large Perth-Dolphin-Lowlander (PDL) hub project in the prolific Moray Firth area of the Central North Sea.

Polecat and Marten are two sizeable existing Buzzard sandstone oil accumulations, which are jointly estimated to hold over 90 million barrels of oil in place and over 33 million barrels of contingent resources. Mr Cross, Parkmead executive chairman, says the fields could be “highly valuable”.

Through this acquisition, Parkmead has increased the group’s total contingent resources by 39%, from 42.5 to 59.1 million barrels of oil equivalent.

Polecat was discovered in 2005 and appraised in 2010 and Marten in 1984, encountering three oil bearing sandstones of Upper Buzzard age. Parkmead benefits from the large amount of existing data on the block, gathered as a result of wells already drilled in the area.

The Diever West gas field, located onshore in the Netherlands, continues to perform above expectations and gross production in July 2016 averaged 34 million cubic feet per day (approximately 5,850 barrels of oil equivalent per day).

Parkmead worked closely with its joint venture partners on the fast-track development of Diever West, and the partnership successfully brought the field onstream within just 14 months of discovery.

The profitable gas production from Diever West, and Parkmead’s wider portfolio of gas fields in the Netherlands, provides important cash flow to the Group. The company’s low-cost onshore portfolio in the Netherlands produces gas from four separate fields with a very low average operating cost of just $14 per barrel of oil equivalent.

A number of enhanced production opportunities have been identified within Parkmead’s existing Netherlands portfolio, which the Group intends to capitalise on with the aim of further increasing its net gas production.

These include a new low-cost infill well at Geesbrug, a sidetrack at Wijk en Aalburg and workovers at Brakel and Grolloo. In addition, a further Rotliegendes exploration target, De Mussels, has been identified. Parkmead’s gas production in the Netherlands serves as a natural hedge to low and volatile oil prices.

Further value-adding opportunities

Parkmead continues to analyse value-adding opportunities, including UK and Netherlands-based acquisitions, and is focused on strengthening its positions in core areas of the Group’s portfolio. Parkmead has maintained a strong and clean balance sheet.  

Mr Cross said: “We are delighted to have doubled our stake in these two oil fields, which significantly increases Parkmead’s contingent oil and gas resources by some 39%.

“Polecat and Marten could be highly valuable to Parkmead’s PDL project by contributing an additional 90 million barrels of oil in place to the already large oil and gas reserves base at PDL.

“We are also pleased to report the continued outperformance of the Diever West gas field which has been producing at stable rates of around 30 million cubic feet per day since coming onstream, significantly ahead of expectations.

“Parkmead is working intensively to evaluate and execute further value-adding opportunities in its core areas of the UK and Netherlands.

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