Losses sharply reduced
Parkmead ready to swoop on more oil field assets
The Aberdeen based company, chaired by former Dana Petroleum boss Tom Cross (pictured), said it was “evaluating further acquisition opportunities to take advantage of the current low oil price environment”.
Reporting a reduction in year-end losses to £6.4 million from £30.8m last year, Mr Cross said the company is building a “balanced independent oil and gas group of breadth and scale”, by developing its current portfolio and adding assets through acquisition and the licensing round process.
Major milestones have been achieved across Parkmead’s licence portfolio in the Netherlands. In November 2015, first commercial production was achieved at the Diever West gas field which has performed well above expectations.
However, the company shared the industry-wide effects of the lower oil price. Group revenue for the year to 30 June 2016 was £10.4m (2015: £18.6m).
During the financial year the price of Brent crude oil averaged $43 per barrel and fell to a 13-year low of $26 per barrel in January.
“This is a significant reduction from the previous year’s average oil price of US$74 per barrel and has therefore severely impacted the revenues and cash flows of oil and gas producers globally,” said Mr Cross.
“Parkmead and its co-venturers have worked tirelessly to reduce operating costs across the entire asset portfolio to reflect the considerably altered macro environment.”
The group is well-capitalised and debt free and Mr Cross said it is “well positioned to withstand the current market conditions”.
He added that it “views the current macro environment as an opportunity for further growth. This positive position is a direct result of experienced portfolio management and a strong focus on capital discipline.”
Because of these opportunities to invest and acquire assets the board is not recommending a dividend.
Mr Cross said: “We believe Parkmead is well positioned to build further on the progress to date and to capitalise on new opportunities.
“In particular, we are delighted by the outperformance of production achieved at Diever West and the significant additional oil reserves secured in the UK North Sea at Perth and Dolphin, which strengthens our strategic position in the region.
“Parkmead maintains its appetite for acquisitions. We will also seek to add shareholder value through a dynamic work programme to maximise the inherent value in our existing assets.
“The group has built 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 make further progress.”