Parkmead in talks to buy more North Sea interests

Tom Cross of Parkmead
Tom Cross of Parkmead
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TOM Cross, founder of Aberdeen-based oil and gas explorer Parkmead, yesterday revealed he is running the rule over a dozen potential acquisitions in the North Sea and Netherlands as the fall in the oil price continues to throw up opportunities.

Cross, who built Dana Petroleum from a £180,000 start-up into a £2 billion business before its sale, said that a third of the Aberdeen firm’s staff were actively working on potential asset deals and were “knee deep in analysis”.

Since the oil price began falling, Cross said banks and shareholders in other oil companies had been in contact to encourage Parkmead to look at acquisitions.

“There are more things on the table form us now than there were when the oil price was $100 a barrel,” he said.

Cross said he expected “things to happen quite quickly” on a number of acquisitions given the pressure the oil price fall had put on some sellers.

Parkmead had £39.4 million in cash at the year end and Cross said there were also said a number of banks ready to provide the company with debt finance if required.

The comments from Cross, pictured, came as the firm announced figures for the six months to 31 December showing revenues rose to £10.1m from £9.9m but the firm made a pre-tax loss of £17m, compared to a profit of £3.1m after a £12.9m impairment charge related to the impact of the oil price fall on its Athena field. As the oil price fell the company focused more on its gas activities where exploration successes led to a trebling of production during the period.

“We learned a lot from building Dana and the importance of having balance in our portfolio. Parkmead is well-positioned to take advantage of the low oil price environment and the opportunities that are arising from this,” said Cross.

In a note headed “Dana MK 2”, analysts at SP Angel said the results underlined the progress that the company has made over the past three years.

“Throughout all of the portfolio management and exploration, the one thing that is clear is that the lessons that have been learned in the development and disposal of Dana Petroleum are being applied to great success here; Parkmead is a great example of how a management team can make a difference to investors,” the note said.

Brendan Long of Charles Stanley also highlighted the potential benefits from the North Sea tax breaks announced in the budget. He said the changes will allow Parkmead to retain 25 per cent more of its profits from some developments.

“We reiterate our conviction buy rating for Parkmead and our belief that Parkmead is the leading mid-cap oil & gas company operating in Europe.”

Shares in Parkmead closed up 1p at 114p.

• Deloitte has strengthened its North-east team with the appointment of director Oliver Pendred to its Aberdeen office. He joins from Deloitte’s London-based energy and resources tax group.

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