TIDMPMG
RNS Number : 4034G
Parkmead Group (The) PLC
20 November 2015
20 November 2015
The Parkmead Group plc
("Parkmead", "the Company" or "the Group")
Preliminary Results for the year ended 30 June 2015
Parkmead, the UK and Netherlands focused oil and gas group, is
pleased to report its preliminary results for the year ended 30
June 2015.
HIGHLIGHTS
Successful exploration leading to increased gas production
-- First commercial gas production achieved at the Diever West
gas field in the Netherlands, following a successful fast-track
development
-- The Diever-2 discovery well was flow tested at 29 million
cubic feet per day (approximately 5,000 barrels of oil equivalent
per day)
-- Further production enhancement work planned on Parkmead's low
operating cost Netherlands portfolio, including a new well at the
Geesbrug gas field to maximise gas production, serving as a natural
hedge to the current low oil price environment
-- Awarded nine new oil and gas licences in the UKCS 28th
Licensing Round, covering a total of 12 offshore blocks
-- Awards include significant new acreage and proven oil fields in the vicinity of the major Parkmead-operated Perth Dolphin Lowlander (PDL) oil hub development
-- Detailed technical work undertaken this year has allowed
Parkmead to release non-core acreage, significantly reducing
licence costs
Continued progress on valuable development projects
-- Entered into a Heads of Agreement outlining the structure of
a joint development of the Perth, Dolphin and Lowlander fields
after detailed technical analysis and development planning work
-- The PDL project has been fully appraised, with a combined
total of 13 wells drilled, and has expected recoverable reserves of
approximately 80 million barrels of oil, double the initial
recoverable reserves of a standalone Perth development
-- Platypus gas field development advancing well, with the draft
Field Development Plan (FDP) submission expected in the coming
months
Reserves and resources increasing
-- Considerable 2P reserves of 26.1 million barrels of oil equivalent as at 30 June 2015
-- Contingent resources increased by 129% to 41.9 million
barrels of oil equivalent as at 30 June 2015 (18.3 million barrels
of oil equivalent at 30 June 2014)
Strategically positioned for further acquisitions
-- Six acquisitions, at both asset and corporate level, have
been completed since positioning Parkmead as a new independent oil
and gas company
-- Parkmead is well capitalised with over US$60 million (GBP41.1
million) of total cash resources at June 2015
-- The Parkmead team is evaluating further acquisition
opportunities to take advantage of the current low oil price
environment
Financial Strength
-- Revenue during the period remained relatively strong at
GBP18.6 million (2014: GBP24.7 million)
-- Total assets stood at GBP105.6 million at 30 June 2015 (GBP127.4 million at 30 June 2014)
-- Raised approximately US$21.1 million (GBP13.4 million) in May
2015 to accelerate opportunities
-- Substantial cash balances of GBP41.1 million as at 30 June 2015
Parkmead's Executive Chairman, Tom Cross, commented:
"I am pleased to report another important year of progress for
Parkmead, despite the challenges of the low oil price environment.
Parkmead discovered and has now brought onstream a new gas field at
Diever West, in the Netherlands. This will deliver profitable gas
production and important additional cash flow to the Group. We have
successfully brought this new gas field onstream within 14 months
of discovery, which is an outstanding achievement.
Parkmead is increasing the Group's net gas production in the
Netherlands through a low-cost, onshore work programme. This will
act as a natural hedge to the very low global oil prices.
Our major new licence awards in the UKCS 28th Round were an
impressive result for Parkmead, with 12 new offshore oil and gas
blocks awarded to the Group. We were delighted with the awards
located close to Parkmead's PDL development, as they have the
potential to add significant value to our assets in this area.
Parkmead is well positioned to take advantage of the lower oil
price environment and the opportunities that are arising from this.
We have excellent regional expertise, significant cash resources,
and a growing low-cost gas portfolio. The Group will continue with
its licensing and acquisition-led growth strategy, securing
opportunities that maximise long-term value for our
shareholders."
For enquiries please contact:
The Parkmead Group plc
Tom Cross (Executive Chairman) +44 (0) 1224 622200
Ryan Stroulger (Chief Financial Officer) +44 (0) 1224 622200
Panmure Gordon (UK) Limited (Financial Adviser, NOMAD and Corporate
Broker to Parkmead)
Mark Taylor +44 (0) 20 7886 2500
Karri Vuori +44 (0) 20 7886 2500
James Greenwood +44 (0) 20 7886 2500
Instinctif Partners Limited (PR Adviser to Parkmead)
David Simonson +44 (0) 20 7457 2020
Anca Spiridon +44 (0) 20 7457 2020
CHAIRMAN'S STATEMENT
2015 has been an important year of progress for Parkmead,
despite the challenging low oil price environment. Building on the
excellent momentum generated in 2014, the Company discovered a new
gas field at Diever West in the Netherlands. The field was flow
tested at 29 million cubic feet per day (approximately 5,000
barrels of oil equivalent per day) and was tied into existing
onshore facilities, with first commercial gas production achieved
in November 2015.
Parkmead has also enjoyed a highly successful period of
exploration activity through the recent UK 28th Licensing Round
awards, winning nine new oil and gas licences spanning 12
attractive offshore North Sea blocks. These awards include
significant new acreage and proven oil fields within the vicinity
of the Parkmead operated Perth Dolphin Lowlander (PDL) oil hub
development.
Operations and Portfolio Growth
The Group has made considerable progress towards building an
independent oil and gas company of significant scale, by developing
its current portfolio and adding new assets through the licensing
round process.
Major progress has been made this year across Parkmead's licence
portfolio in the Netherlands. In September 2014, a new onshore gas
field was discovered at Diever West. The Diever-2 well found gas in
a good quality Rotliegendes age sandstone reservoir. A 157 foot gas
column was encountered, with both net pay and porosity values
exceeding pre-drill expectations. The well was flow tested after
the successful discovery and recorded an excellent flow rate of 29
million cubic feet per day (approximately 5,000 barrels of oil
equivalent per day). Diever West has been tied into existing
production facilities under a fast-track and low-cost development,
and first commercial gas production was achieved in November 2015.
Parkmead has worked closely with the field operator, Vermilion
Energy, on the fast-track development of the field and the
joint-venture group successfully brought the field onstream within
just 14 months of discovery. This is an outstanding
achievement.
Parkmead's gas assets in the Netherlands continue to provide a
robust revenue stream and net cash flows to the Company. 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 our net
gas production. These include a new low-cost infill well at
Geesbrug, and a further exploration target at De Mussels. The new
production from Diever West and the additional Geesbrug well are
forecast to more than treble Parkmead's net gas production in the
Netherlands. This gas derived revenue will act as a natural hedge
against low and volatile oil prices.
Parkmead also enjoyed a highly successful year of licensing
round awards. In November 2014, the Group was awarded six new
licences covering a total of nine offshore blocks in the first
tranche of awards under the UKCS 28th Licensing Round. These new
licences contain opportunities across the Central and Southern
North Sea areas, and are all operated by Parkmead. Three of the new
licence awards significantly increase Parkmead's asset base in the
vicinity of the Company's major PDL oil hub development project,
which is one of the largest undeveloped oil projects in the North
Sea. This newly awarded acreage also contains exploration prospects
in addition to sizeable proven oil accumulations, such as the
Buzzard sandstone discoveries at Polecat and Marten. Polecat was
discovered in 2005 and appraised in 2010. The 2010 appraisal well
was flow tested at 4,373 barrels of oil per day. The Marten
discovery was made in 1984, encountering three oil bearing
sandstones of Upper Buzzard age. Three additional blocks were
awarded to Parkmead in the PDL vicinity, one situated adjacent to
the Perth oil field, and two further blocks located approximately
12km north of Perth containing the exciting Upper Jurassic Piper
Formation oil prospects, Fynn and Penny. These new strategically
positioned licences have the potential to add significant value to
the PDL project.
(MORE TO FOLLOW) Dow Jones Newswires
November 20, 2015 02:01 ET (07:01 GMT)
In July 2015, Parkmead was awarded a further three new licences
as part of the 28th Licensing Round covering three offshore blocks.
Two of the new licences are located in the highly prospective West
of Shetland area adjacent to existing Parkmead blocks. Detailed
mapping of these blocks indicate two new exploration targets, Sanda
North and Sanda South, as well as an extension of Parkmead's large
Cretaceous Eddystone prospect. The third licence award in this
suite of awards is located in the Southern Gas Basin, an area where
the Company has a deep technical knowledge of the exploration
plays, and is building a valuable portfolio of targets. Parkmead
has already enjoyed significant success in the Southern Gas Basin
with the gas discoveries at Platypus and Pharos. Seven prospects
and leads have been identified on the new Southern North Sea
licence with Lower Leman targets, the most important of which is a
prospect called Selene.
Parkmead's experienced team of geoscientists have already begun
several work programmes across these licences, with detailed
petrophysics and mapping work underway. Parkmead will continue to
invest heavily in licensing round applications, both in the UK and
overseas, and views this as a key component in the Group's strategy
to build an attractive and balanced portfolio that offers
significant exploration upside.
Key progress has been made during the year towards a joint
development of the Perth, Dolphin and Lowlander fields. A Heads of
Agreement was signed in August 2014 to progress the future joint
development of the PDL fields. The agreement provides the framework
needed to bring the enlarged project together, and outlines partner
cooperation with regards to equity alignment and the future work
programme. Parkmead, as the Perth-Dolphin operator, continues to
work closely with its PDL project partners to maximise oil reserves
and financial returns from the project, and from the wider regional
area. The three fields are fully appraised, with a combined total
of 13 wells drilled, and contain oil in place of over 400 million
barrels. It is expected that recoverable reserves from the PDL oil
hub development will be over 80 million barrels of oil, double the
initial recoverable reserves of Perth as a standalone project.
Results
The Group's revenue for the year to 30 June 2015 was GBP18.6m
(2014: GBP24.7m). As expected, the significant reduction in global
oil prices has in turn reduced the Group's revenue during the
period. During this time, the price of oil has fallen from near
US$110 per barrel, to seven-year lows of below US$50 per barrel.
This has severely impacted the revenues and cash flows of oil and
gas producers globally. Parkmead and its co-venturers have worked
hard to reduce operating costs across the entire asset portfolio to
reflect the substantially altered macro environment. The higher
cost of sales during the period principally reflected Parkmead's
increased working interest in the Athena oil field, acquired
through the purchase of an additional 20 per cent. interest in
Athena from EWE VERTRIEB GmbH in April 2014. Against the backdrop
of lower oil prices and therefore declining revenues compared to
the relatively fixed Athena cost base, the contract for the BW
Athena FPSO was re-negotiated and the new, improved terms became
effective from June 2015, substantially reducing operating
expenditure from this point forward. Administrative expenses
provided a credit of GBP1.2m (2014: GBP5.7m expense), arising
principally from the lower share price impacting the non-cash share
based payment charge. The Group recorded a post-tax loss of GBP31.4
million, which includes a non-cash impairment charge of GBP12.9
million recorded in the period, which relates to the impact on the
Athena field of the collapse in global oil prices.
Parkmead's total assets at 30 June 2015 were GBP105.6m (2014:
GBP127.4m). Available-for-sale financial assets were GBP3.3m (2014:
GBP4.8m). Cash and cash equivalents at year end were GBP41.1m
(2014: GBP46.3m) and Parkmead has minimal debt. The Group's net
asset value was GBP80.5m (2014: GBP99.7m). Parkmead is therefore
well positioned to withstand the current market conditions, and
indeed views the current macro environment as an opportunity for
further growth. This is as a result of experienced portfolio
management and a strong focus on capital discipline.
In line with its strategy, Parkmead has shown a strong track
record for value-adding transactions, at both the asset and
corporate level. The Group's acquisitions to date have expanded its
oil and gas asset portfolio significantly, which now covers the
entire asset life cycle from exploration through to development and
production. In May 2015, the Group raised approximately US$21.1
million through a successful placing of 11,200,000 new ordinary
shares, to accelerate work programmes and offer the Company greater
flexibility to take advantage of opportunities that are becoming
available as a result of lower oil prices.
Following this successful placing, the Group's total ordinary
shares in issue increased to 98,929,160 (2014: 87,729,160).
Due to Parkmead's ongoing growth and investment programme, the
Board is not recommending the payment of a dividend in 2015
(2014:GBPnil).
Investments
The Group's principal available-for-sale investment is its
shareholding in Faroe Petroleum plc ("Faroe") (LSE AIM: FPM.L). As
at 30 June 2015, the value of this investment was GBP3.3m (30 June
2014: GBP4.8m). Faroe's closing share price at 30 June 2015 was
85.25 pence per share.
Outlook
The Directors of Parkmead are pleased with the Group's
continuing progress in building an independent oil and gas company
of increasing scale. With a balanced asset base, new oil and gas
licences and a strong balance sheet, we believe Parkmead is well
positioned to build further on the progress to date and to
capitalise on new opportunities. In addition, we are excited by
Parkmead's new gas production at Diever West and the new licence
awards in the vicinity of the major PDL project, which increase our
strategic position in the region.
As we move towards 2016, Parkmead maintains its appetite for
acquisitions and will also seek to add shareholder value through a
dynamic work programme. 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.
Tom Cross
Executive Chairman
19 November 2015
Notes:
1. Dr Colin Percival, Parkmead's Technical Director, who holds a
First Class Honours Degree in Geology and a Ph.D in Sedimentology
and has over 30 years of experience in the oil and gas industry,
has reviewed and approved the technical information contained in
this announcement. Parkmead's evaluation of reserves and resources
was completed in accordance with the 2007 Petroleum Resources
Management System prepared by the Oil and Gas Reserves Committee of
the Society of Petroleum Engineers and reviewed and jointly
sponsored by the World Petroleum Council, the American Association
of Petroleum Geologists and the Society of Petroleum Evaluation
Engineers.
Group statement of profit or loss
for the year ended 30 June 2015
Note 2015 2014
GBP'000 GBP'000
Continuing operations
Revenue 18,639 24,656
Cost of sales (39,418) (21,426)
Impairment of property, plant and
equipment 2 (12,905) -
------------------------------------------ ----- --------- ---------
Gross profit / (loss) (33,684) 3,230
Exploration and evaluation expenses (266) (507)
Administrative expenses 3 1,237 (5,668)
Gain on bargain purchase 4 - 5,003
------------------------------------------ ----- --------- ---------
Operating profit / (loss) (32,713) 2,058
Finance income 4,074 835
Finance costs (2,193) (1,856)
Profit / (loss) before taxation (30,832) 1,037
Taxation (529) 200
------------------------------------------ ----- --------- ---------
Profit /(loss) for the year attributable
to the equity holders of the Parent (31,361) 1,237
------------------------------------------ ----- --------- ---------
Profit / (loss) per share (pence)
Continuing operations
Basic 5 (35.22) 1.62
Diluted (35.22) 1.59
Group and company statement of profit or loss and other
comprehensive income
for the year ended 30 June 2015
Group Company
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
Profit / (loss) for
the year (31,361) 1,237 (14,451) (8,257)
Other comprehensive
income
Items that may be reclassified
subsequently to profit
or loss
Fair value (loss) /
gain on available-for-sale
financial assets (1,506) 428 (1,506) 427
--------------------------------- --------- --------- --------- ---------
(1,506) 428 (1,506) 427
Other comprehensive
(loss) / income for
the year, net of tax (1,506) 428 (1,506) 427
--------------------------------- --------- --------- --------- ---------
Total comprehensive
(loss) / income for
the year attributable
to the equity holders
(MORE TO FOLLOW) Dow Jones Newswires
November 20, 2015 02:01 ET (07:01 GMT)
of the Parent (32,867) 1,665 (15,957) (7,830)
--------------------------------- --------- --------- --------- ---------
Group and company statement of financial position
as at 30 June 2015
Group Company
2015 2014 2015 2014
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment:
development & production 18,717 29,902 - -
Property, plant and equipment:
other 139 181 135 168
Goodwill 2,174 2,174 - -
Other intangible assets - - - -
Exploration and evaluation
assets 33,630 31,225 - -
Investment in subsidiary
and joint ventures - - 16,640 28,017
Available-for-sale financial
assets 3,315 4,821 3,315 4,821
Deferred tax assets 242 1,235 - -
Total non-current assets 58,217 69,538 20,090 33,006
--------------------------------- --------- --------- --------- ---------
Current assets
Trade and other receivables 5,978 11,560 45,024 26,091
Current tax assets 243 - - -
Cash and cash equivalents 41,121 46,346 26,069 41,589
--------------------------------- --------- --------- --------- ---------
Total current assets 47,342 57,906 71,093 67,680
--------------------------------- --------- --------- --------- ---------
Total assets 105,559 127,444 91,183 100,686
--------------------------------- --------- --------- --------- ---------
Current liabilities
Trade and other payables (14,634) (7,973) (4,821) (8,016)
Interest-bearing loans
and borrowings (412) (2,071) - -
Current tax liabilities - (361) - -
Other provisions - (107) - (107)
--------------------------------- --------- --------- --------- ---------
Total current liabilities (15,046) (10,512) (4,821) (8,123)
--------------------------------- --------- --------- --------- ---------
Non-current liabilities
Interest-bearing loans
and borrowings - (4,178) - (2,000)
Other liabilities (278) (2,140) (276) (2,140)
Deferred tax liabilities (1,284) (1,593) - -
Decommissioning provisions (8,482) (9,305) - -
--------------------------------- --------- --------- --------- ---------
Total non-current liabilities (10,044) (17,216) (276) (4,140)
--------------------------------- --------- --------- --------- ---------
Total liabilities (25,090) (27,728) (5,097) (12,263)
--------------------------------- --------- --------- --------- ---------
Net assets 80,469 99,716 86,086 88,423
--------------------------------- --------- --------- --------- ---------
Equity attributable to
equity holders
Called up share capital 19,533 19,365 19,533 19,365
Share premium 87,805 74,967 87,805 74,967
Merger reserve 27,187 27,187 27,187 27,187
Revaluation reserve (2,710) (1,204) (2,710) (1,204)
Retained deficit (51,346) (20,599) (45,729) (31,892)
--------------------------------- --------- --------- --------- ---------
Total Equity 80,469 99,716 86,086 88,423
--------------------------------- --------- --------- --------- -----------
Group statement of changes in equity
for the year ended 30 June 2015
Share Share Merger Revaluation Retained Total
capital premium reserve reserve earnings
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2013 18,970 30,448 12,631 (1,632) (23,074) 37,343
Profit for the
year - - - - 1,237 1,237
Fair value gain
on available-for-sale
financial assets - - - 428 - 428
------------------------ --------- --------- --------- ------------ ---------- ---------
Total comprehensive
income for the
year - - - 428 1,237 1,665
Issue of new
ordinary shares 276 43,883 - - - 44,159
Issue of new
ordinary shares
on acquisition
of subsidiary 115 - 14,556 - - 14,671
Issue of new
ordinary shares
on asset acquisition 4 636 - - - 640
Share-based
payments - - - - 1,238 1,238
------------------------ --------- --------- --------- ------------ ---------- ---------
At 30 June 2014 19,365 74,967 27,187 (1,204) (20,599) 99,716
------------------------ --------- --------- --------- ------------ ---------- ---------
Loss for the
year - - - - (31,361) (31,361)
Fair value loss
on available-for-sale
financial assets - - - (1,506) - (1,506)
------------------------ --------- --------- --------- ------------ ---------- ---------
Total comprehensive
loss for the
year - - - (1,506) (31,361) (32,867)
Issue of new
ordinary shares 168 12,838 - - - 13,006
Gains arising
on repayment
of employee
share based
loans - - - - 271 271
Share-based
payments - - - - 343 343
------------------------ --------- --------- --------- ------------ ---------- ---------
At 30 June 2015 19,533 87,805 27,187 (2,710) (51,346) 80,469
------------------------ --------- --------- --------- ------------ ---------- ---------
Company statement of changes in equity
for the year ended 30 June 2015
Share Share Merger Revaluation Retained Total
capital premium reserve reserve earnings
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2013 18,970 30,448 12,631 (1,631) (24,872) 35,546
Loss for the
year - - - - (8,257) (8,257)
Fair value gain
on available-for-sale
financial assets - - - 427 - 427
------------------------ --------- --------- --------- ------------ ---------- ---------
Total comprehensive
income (loss)
for the year - - - 427 (8,257) (7,830)
Issue of new
ordinary shares 276 43,883 - - - 44,159
Issue of new
ordinary shares
on acquisition
of subsidiary 115 - 14,556 - - 14,671
Issue of new
ordinary shares
on asset acquisition 4 636 - - - 640
Share-based
payments - - - - 1,237 1,237
------------------------ --------- --------- --------- ------------ ---------- ---------
At 30 June 2014 19,365 74,967 27,187 (1,204) (31,892) 88,423
------------------------ --------- --------- --------- ------------ ---------- ---------
Loss for the
year - - - - (14,451) (14,451)
Fair value loss
on available-for-sale
financial assets - - - (1,506) - (1,506)
------------------------ --------- --------- --------- ------------ ---------- ---------
Total comprehensive
loss for the
year - - - (1,506) (14,451) (15,957)
Issue of new
ordinary shares 168 12,838 - - - 13,006
Gains arising
on repayment
of employee
share based
loans - - - - 271 271
Share-based
payments - - - - 343 343
------------------------ --------- --------- --------- ------------ ---------- ---------
At 30 June 2015 19,533 87,805 27,187 (2,710) (45,729) 86,086
------------------------ --------- --------- --------- ------------ ---------- ---------
Group and company statement of cashflows
(MORE TO FOLLOW) Dow Jones Newswires
November 20, 2015 02:01 ET (07:01 GMT)
Parkmead (LSE:PMG)
Historical Stock Chart
From Aug 2024 to Sep 2024
Parkmead (LSE:PMG)
Historical Stock Chart
From Sep 2023 to Sep 2024