Cross loans Parkmead £8m to fund key deals

PARKMEAD Group, the fledgling oil and gas explorer, has made its first major acquisition since former Dana Petroleum boss Tom Cross took control of the company, buying a 15 per cent stake in several southern North Sea blocks from a subsidiary of Exxon Mobil.

Cross, who joined as executive chairman a year ago, helped fund the deal with an £8 million loan to Aim-quoted Parkmead, which yesterday saw its shares jump more than 15 per cent. The loan is expected to fund several further acquisitions – possibly before the end of the year.

The deal will see Cross climb back into bed with his former firm Dana, which in 2010 discovered the Platypus gas field contained within one of the blocks and which continues to hold a 45 per cent stake in the project. Dana was bought by the Korea National Oil Corporation for £1.9 billion last year.

The oil millionaire said Parkmead had to move quickly to secure the holding, which also covers the Possum gas prospect, as drilling in the Platypus field is due to start early next year.

The company has been offered lending facilities by a number of banks – with the sums involved reaching “a multiple” of £8m – but Cross said a cash loan was the quickest option in this case.

But he added: “Later you’ll see us do the traditional thing like a major facility with one of the banks.”

The loan will leave Parkmead “more than fully funded” for its programme of acquisitions.

Cross said the deal with Exxon’s XTO UK was particularly gratifying as Parkmead’s management team has only been in place for six months.

“Here we are just six months into a new company and we have done a deal with the biggest oil company in the world and that’s not easy,” he said. “We are probably already where Dana was in year three or four.”