Parkmead, the independent energy group focused on growth through gas, oil and renewable energy projects, is pleased to report its preliminary results for the year
ended 30 June 2022.
Record revenue, up 236%, with strong cashflow and profits recorded at operating and pre-tax levels
- Revenue more than tripled to £12.1 million (2021: £3.6 million), as the Company benefited from the continued strength in gas prices
- Gross profit increased significantly to £10.8 million (2021: £1.8 million), demonstrating the high-quality of Parkmead’s onshore Netherlands assets
- Gross margin increased to 89% (2021: 49%)
- Net cash generated from operating activities of £4.5 million (2021: £1.3 million used in operating activities)
- Adjusted EBITDA of £9.1 million (2021: £1.0 million loss)
- Operating profit achieved of £5.2 million (2021: £12.8 million loss) or 4.8p on a per share basis
- Record profit before tax of £4.0 million (2021: £13.4 million loss) or 3.7p on a per share basis
- Revenue in excess of €9.0 million from the Netherlands in the four-month period to 31 October 2022, as Parkmead remains 100% unhedged
- Parkmead maintains strict financial discipline with very low operating costs
Gas royalty acquisition proving highly beneficial
- Acquisition of Netherlands gas royalty completed in July 2021, doubling Parkmead’s effective financial interest from 7.5% to 15% in the Grolloo, Geesbrug and Brakel gas fields
- Parkmead is benefiting strongly from this gas royalty deal, completed ahead of the increase in energy prices
- Low-cost onshore gas portfolio in the Netherlands produces from four separate gas fields with an average field operating cost of just US$8.6 per barrel of oil equivalent (“boe”), generating strong cash flows
- Average netback for the year from the Netherlands of approximately $120 per boe
- Average gross production for the period across the Group’s Netherlands assets was 21.7 million cubic feet per day (“MMscfd”), approximately 3,740 barrels of oil equivalent per day (“boepd”)
Operational wind farm acquired, delivering immediate electricity revenues
- Acquisition of 1.5MW onshore wind farm in Scotland through purchase of Kempstone Hill Wind Energy Limited (“KHWEL”) for £3.29 million
- Acquisition was immediately revenue and cash flow enhancing
- The Kempstone Hill wind farm provides power for up to 1,000 homes and has an attractive inflation-linked, Feed-in Tariff through until 2036
- Electricity is sold through a power purchase agreement (“PPA”); Parkmead renegotiated the PPA in August 2022 securing a 245% increase in its export electricity prices
- Parkmead assessing a number of opportunities to further enhance the Kempstone Hill Wind Farm, such as the potential inclusion of solar power generation, and expanding sales of electricity to local industrial users
Substantial gas and oil reserves and resources
- Proven and Probable (2P) reserves of 45.5 million barrels of oil equivalent (“MMboe”) as at 30 September 2022 (45.5 MMboe as at 30 September 2021)
Well positioned for further acquisitions and opportunities
- Parkmead maintains its appetite for energy acquisitions. The Group is well positioned, with a strong balance sheet, to capitalise on opportunities within in the sector
Post period end:
New two-well drilling campaign in the Netherlands commencing
- Spudding of ‘LDS’ two-well drilling campaign from the Diever site expected imminently
- The LDS project will target a combined Pmean Gas in Place of 37.2 billion cubic feet (“Bcf”), in the prolific Rotliegendes reservoirs found on the licence
Increased stake in Skerryvore to 50%; Greater Perth Area farm out launched
- Parkmead increased its stake in the high-impact Skerryvore project from 30% to 50%
- Planned well will target the main stacked exploration prospects, at Mey and Chalk level, which studies indicate could contain 157 million barrels of oil equivalent (MMboe) in the P50, most likely case
- Greater Perth Area (“GPA”) farm-out process launched in September 2022
- New UK Energy Profits Levy has created a powerful investment incentive for major producers to invest in new UK North Sea developments, with an investment allowance of up to 91%
- Core Perth field alone holds approximately 55 million barrels of recoverable oil equivalent ("MMboe") on a most likely, P50 basis
- Wider GPA project has the potential to deliver between 75 and 130 MMboe on a P50 basis
- GPA has been fully appraised and no further appraisal drilling is needed; constituent wells have been flow tested at rates of up to 6,000 boepd
Parkmead’s Executive Chairman, Tom Cross, commented:
“I am delighted to report an excellent year of progress for Parkmead. We have delivered record gas revenue and strong pre-tax profits through our high-quality Dutch assets.
The innovative royalty deal which we completed last summer is proving to be highly advantageous and is adding considerable value. Parkmead is 100% unhedged and is benefiting from these additional gas sales at higher prices.
We will be spudding the first of our LDS wells imminently in the Netherlands. This will target new onshore gas resources which, in a success case, will be tied in quickly to production. Parkmead has already commenced well planning work on the high-impact Skerryvore project in the UK.
A strong contribution is being made by the Kempstone Hill Wind Farm, producing 100% renewable energy direct to the grid. This UK onshore wind farm is complementary to the Group’s low-carbon, onshore operations in the Netherlands.
Our team continues to identify and evaluate further acquisitions that would enhance our existing business.
Parkmead is well positioned for the future. We have excellent UK and Netherlands regional expertise, strong financial discipline, 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 to secure opportunities that maximise future value for our shareholders”