Parkmead, the UK and Netherlands focused independent energy group, is pleased to report its preliminary results for the year ended 30 June 2019.
Parkmead delivers major growth in cash flow and operating profit
· Revenue increased by 18% to £8.3 million (2018: £7.0 million)
· Strong cash flow from operations, up 59% to £4.7 million (2018: £3.0 million)
· Gross profit for the period of £5.7 million (2018: £4.1 million), an increase of 41%
· Operating profit climbed to £5.1 million (2018: £5.3 million loss)
· Total asset base grew to £82.3 million at 30 June 2019 (2018: £78.9 million)
· Well capitalised, with cash balances of £30.7 million (US$39.0 million) as at 30 June 2019
· Low-cost Netherlands gas production provides excellent cash flow to Parkmead
Significant progress on Platypus, GPA and Skerryvore oil and gas projects
· Field Development Plan draft and Environmental Statement submitted to the OGA and OPRED, respectively, for the development of the Platypus gas project in the UK Southern North Sea
· Selected development concept is a subsea tie-back to the Cleeton platform, significantly reducing initial capital expenditure and field operating cost
· Mid case technical recoverable reserves from Platypus of 106 billion cubic feet ("Bcf")
· Platypus East (previously Possum) provides significant upside to the Platypus project, potentially adding a further 50 Bcf of reserves; geological probability of success (GPoS) of 73%
· Platypus alone is expected to produce 47 million cubic feet of gas per day ("MMscfd") at peak production, according to operator estimates, with a field life of approximately 20 years
· Parkmead is in commercial discussions with the Scott field partnership in order to potentially agree terms for a tie-back of the Greater Perth Area ("GPA") to the Scott facilities
· Parkmead is also holding discussions with a number of leading, internationally-renowned service companies in relation to the GPA project
· New seismic purchased in Q3 2019 covering the Skerryvore prospect and surrounding area, which will be reprocessed in 2020 to mature the collection of prospects
Strategic move into renewable energy opportunities
· Renewable energy opportunities accessed through strategic acquisition of Pitreadie Farm Limited ("Pitreadie")
· Studies are being conducted on the potential for a wind farm project, solar farm and a biomass production facility on the acquired land
· One of the large areas of land owned by Pitreadie lies adjacent to the Mid Hill Wind Farm which encompasses 33 Siemens wind turbines
Increase in Diever West gas production and expanded Netherlands activity
· Production at the Diever West gas field for the financial year averaged 44.6 MMscfd, which equates to approximately 7,676 barrels of oil equivalent per day ("boepd"), a 13% increase on the average gross production for the 12 month period ended 30 June 2018 of 39.6 MMscfd
· Dynamic reservoir modelling suggests Diever West has approximately 108 billion cubic feet ("Bcf") of gas-in-place, more than double the previous, post-drill static volume estimate of 41 Bcf
· Multiple further exploration opportunities exist around Diever West, such as the Boergrup and De Bree prospects, both of which contain stacked targets
· A new seismic reprocessing project will be undertaken, starting in Q4 2019, which will help define and high-grade the extensive prospectivity around Diever West
· Low-cost onshore gas portfolio in the Netherlands produces from four separate gas fields with an average operating cost of just US$11.9 per barrel of oil equivalent, generating strong cash flows
· Further production enhancement work planned on Parkmead's Netherlands portfolio, including compression optimisation work at Grolloo during 2020 to maximise production, plus development planning at the Ottoland and Papekop oil and gas discoveries
Substantial oil and gas reserves and resources
· Net 2P reserves of 46.0 million barrels of oil equivalent ("MMBoe") as at 30 September 2019 (46.3 MMBoe as at 30 September 2018)
· Net 2C resources of 100.8 MMBoe as at 30 September 2019 (101.8 MMBoe as at 30 September 2018)
Well positioned for further acquisitions and opportunities
· Eight acquisitions, at both asset and corporate level, have been completed to date
· Parkmead actively evaluating further acquisition and licensing growth opportunities
Parkmead's Executive Chairman, Tom Cross, commented:
"I am pleased to report an excellent year of progress for Parkmead. The Group has increased revenue to £8.3 million and delivered major growth in cash flow and operating profit. This is an outstanding achievement for Parkmead and creates a strong foundation from which to continue its momentum.
We have achieved important milestones on the valuable Platypus gas project. The innovative subsea tie-back plan reduces the cost of the project significantly. The Platypus project has the potential to open up further development upside in this prolific area of the Southern North Sea, in which Parkmead holds additional appraisal and exploration interests.
Through a strategic acquisition, we have begun looking at a number of renewable energy opportunities. Renewable energy is directly in line with Parkmead's business plan, broadening and enhancing the Group's energy asset base.
The team at Parkmead continues to work intensively to evaluate and execute further value-adding opportunities which could provide additional upside to the Group.
Parkmead is well positioned for the future. We have excellent UK and Netherlands regional expertise, significant cash resources, and a growing portfolio of high-quality assets. The Group will continue to build upon the inherent value in its existing interests with a balanced, acquisition-led, growth strategy securing opportunities that maximise long-term value for our shareholders."