Cross talks up Parkmead’s ‘exciting’ future as it prepares to start drilling

OIL entrepreneur Tom Cross yesterday said his latest venture, Parkmead, was now entering an “exciting” period of development as it prepares for the start of a drilling and appraisal campaign.

His comments came as the company announced an operating loss of £2.5 million for the six months to 31 December, up from £532,507 last year, reflecting costs involved in significantly increasing staffing levels in Aberdeen. Total assets rose by 8 per cent to £13.4m.

Executive chairman Cross, who previously founded North Sea success story Dana Petroleum, said it had been a period of “significant progress towards building a new independent oil and gas company”.

“It has seen the delivery of strong commercial activity for the group with the acquisition of assets well known to the Parkmead team in the North Sea,” said Cross.

The company has also recently acquired its first producing assets in the Netherlands and a number of applications are under way for the ongoing UK Continental Shelf 27th licensing round.

Cross said the recruitment of a number of industry experts to join the team, the securing of an £8m shareholder loan facility in November 2011 and a recent successful share placing raising a further £8.53m last month “positions the group very well for future growth”.

The coming months will see appraisal drilling at the company’s Platypus gas field and exploration drilling at the Pharos gas prospect.

“We look forward to updating our shareholders with news on these projects and with our progress towards further commercial transactions,” added Cross.

Analysts from Fox Davies described the figures as representing “the end of the beginning” for Parkmead.

“These results mark the end of the company’s journey from investment vehicle to junior exploration and production,” said a research note.

With significant cash in the bank and the 2012 appraisal and development programme funded, the note commented that “all the ingredients for near-term growth are now in place”.

Alongside last month’s announcement that the company was acquiring production assets in the Netherlands, Cross said he was investing more than £3.45m as part of the placing which was at a significant discount to the prevailing share price.

He said the investment highlighted his commitment to Parkmead and reflected his belief in the future opportunities for the company.

Under the asset acquisition deal, Parkmead is buying a portfolio of onshore assets for £6.2m. The assets include interests in four producing gas fields and two oil fields.

Parkmead is hotly followed by private investors hopeful that Cross will repeat the success he had with Dana which delivered stellar returns for investors before its takeover by the Korea National Oil Company.

Shares in Parkmead have already risen more than six-fold since Cross was named as chairman late in 2010. Shares rose by 0.25p yesterday to 19.75p.