Scotland/Herald11 May 2017 08:55
Parkmead shares up as latest deal lifts North Sea
7 hrs ago / Scott Wright, Deputy Business Editor
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SHARES in Parkmead leapt by nearly six per cent after the oil and gas company doubled its stake in a key North Sea area, giving a further shot in the arm to the embattled basin.
Parkmead, led by North Sea veteran Tom Cross, showed its appetite for doing deals at the current crude price by striking a deal to acquire a 50 per cent interest in two blocks in the Southern Gas Basin from Verus Petroleum. The acquisition doubles Parkmead’s equity in the area, which includes the Farne Extension prospect and four further leads, to 100 per cent.
Parkmead, which operates the licence, said the collection of prospects and leads within the area have the potential to contain an initial 175 billion cubic feet of gas.
The deal is the latest boost this week for the North Sea, which has suffered drastically following the plunge in Brent crude prices since the latter part of 2014.
On Wednesday Repsol Sinopec underlined the foreign-owned company’s commitment to the area as the venture started production from the flagship Montrose Area Redevelopment. That came after oil and gas junior Hurricane Energy raised hopes of an oil and gas boom West of Shetland after an export report concluded more than 500 million barrels could be recovered from its Lancaster field.
And last week oil and gas majors Royal Dutch Shell and BP signalled their commitment to the North Sea. Shell said it will continue to invest in the area, though it declined to rule out offloading more UK assets, while BP said the outlook for the North Sea looks positive amid expectations that the crude price will remain above $50 per barrel.
Mr Cross, who built Dana Petroleum into a £1.9 billion business, is on record as saying the downturn caused by the crude price plunge presented opportunities to buy North Sea assets at attractive prices.
The Verus deal comes shortly after Parkmead bought stakes in three Big North Sea finds from Atlantic Petroleum.
And the Aberdeen-based company reiterated yesterday that it continues to assess further value-adding opportunities, including UK and Netherlands-based acquisitions.
It declared that its strong and debt free balance sheet put it in a good position to take advantage of the improving conditions.
Brent crude was trading just below $50 per barrel at 5pm last night, having dipped to about $27 per barrel at the depths of the downturn last year.
Mr Cross said: “We are delighted to double our stake in this attractive area, which expands Parkmead’s
portfolio in the Southern Gas Basin.
“Parkmead has a 100 per cent track record of drilling success in the UK Southern Gas Basin to date, with successful wells drilled at Platypus and Pharos.
“The team at Parkmead is working intensively to evaluate and execute further value-adding acquisitions in our core areas of the UK and Net
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