from last year IC extract15 Aug 2019 17:30
Likely newsflow on the commercialisation of licences covering the Perth and Dolphin fields in the
Moray Firth area, which contains very large oil fields including Piper, Claymore and Tartan, is another
potential share price driver. Perth and Dolphin are two substantial Upper Jurassic Claymore
sandstone accumulations that have tested 32°-38° API oil at production rates of up to 6,000 barrels of
oil per day (bopd) per well. That’s worth noting, because Parkmead is in commercial discussions with
the Scott field partnership, led by China National Offshore Oil Corporation, to explore terms of a subsea tie-back via the Scott platform located six miles away from Parkmead’s Greater Perth Area (GPA)
oil hub. Parkmead is also holding discussions with a number of leading, international oil service
companies.
The point being that newsflow from either Verbier, the GPA project, further production gains in the
Netherlands, or an off-take agreement for Platypus, all have scope to drive Parkmead’s share price
significantly higher, and put a more realistic valuation on its 2P reserves of 46m barrels of oil
equivalent (boe), and 2C reserves of 100.9m boe.
This is not lost on investors, which is why Parkmead’s shares are up 55 per cent since I included
them in my 2018 Bargain Shares Portfolio. However, I believe that they could double – or even treble
in value – if the company commercialises either the Platypus or GPA project. The downside risk looks
limited given cash backs up more than half Parkmead’s market capitalisation, and the profitable Dutch
gas operations means that the company actually generates positive cash flow. Strong buy.
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