Looking good,less downside risk, order still being filled IMHO.....22 Jul 2025 11:13
Low downside risk, high upside potential
At £16.4m, Parkmead is trading at only a small premium to its last reported cash balance of £13m
at 30 June 2025. With a further £7m of firm cash payments due into the business over the next 19
months and potential payments of up to a further £120m as a result of the recently completed Serica
transaction, Parkmead offers a low-risk investment opportunity with significant upside potential. The
Company made strong progress across all elements of its business in 1H25, including delivering
solid operational performance at both the Kempstone Hill wind farm and its Dutch gas business,
and the advancement of the Company’s flagship Glenskinnan Renewable Energy Park, where a
planning application is to be submitted in 4Q25.
— Low risk, high value upside: Parkmead is in a strong financial position, with cash of £13m as at 30 June
2025 (79% of Parkmead’s market cap) following the completion of the sale of subsidiary Parkmead E&P to
Serica Energy. In addition to the £7m already received from Serica, Parkmead will be receiving additional
deferred firm cash payments totalling £7m, payable in instalments of £3.1m and £3.9m on 27 February 2026
and 27 February 2027, respectively. Two further contingent payments of up to £30m and £90m are
conditional on future field development approvals on the Skerryvore and Fynn licences, respectively,
providing the Company and its shareholders with the potential to realise significant additional upside in the
future – all without any shareholder dilution and at zero cost to Parkmead.
— Strong operational performance: In 1H25, Parkmead’s Dutch fields delivered an average net production of
155boepd (2H24: 181boepd). The Dutch business benefited from stronger market conditions with average
realised pricing of €41.86/MWh in 1H25 (2H24: €38.16/MWh). Parkmead’s 100% owned and operated
Kempstone Hill wind farm continued to perform strongly in 1H25, with operational efficiencies of 96-99%
over the past 12 months.
— Balance sheet provides platform for future growth: Parkmead’s strong balance sheet provides a platform by
which it can fund the next phase of its growth plans in natural gas, renewables and international E&P. In the
Netherlands, the co-venturers are working to identify several short-cycle, rapid-payback drilling and
workover opportunities with a view to boosting future production. At the flagship Glenskinnan renewable
energy project, public consultations were completed in April 2025, with Parkmead and developer Galileo
Empower now working to finalise mutual commercial arrangements ahead of submitting a planning
application to the Scottish Government in 4Q25. Parkmead is also well positioned to pursue value-adding
acquisition opportunities. The Board is focused on targeting the acquisition of further cashflow-generating
renewable energy assets onshore UK and on international E&P opportunities, with the aim of delivering
val