Parkmead Cuts Losses on Low Gas Production Costs and Operating Reductions
UK- and Netherlands-focused Parkmead Group has rallied substantially in its interim financial results for the six months leading up to December 31 2015, thanks in large part to low gas production costs at its fields in the Netherlands and lower operating costs.
The results show that Parkmead has reduced the company's post-tax loss by more than £10mn, from £14.9mn in 2014 to £4.8mn, a reduction which Parkmead credits to "a significant reduction in operating costs...combined with no impairment charge being recorded" compared to the previous year.
The company also posted net assets of £74.6mn at 31 December 2015, compared to £82.8mn in 2014, and revenue of £7mn at December 31 2015, compared £10.1mn in 2015. It also says it has a strong cash position of £29.6mn as of December 31 2015.
Gas production in the Netherlands has been a particular highlight for Parkmead, with four of its onshore fields there averaging an operating cost of US$14 per boe. Its newest field in the Netherlands, the Diever West field, which was brought onstream in just 14 months from the time of discovery, is operating at an ever low cost, in the region of US$12 per boe.
The company plans to further enhance its operations in the Netherlands, including adding new wells at the Geesbrug and Wijk en Aalburg gas fields. This, Parkmeand saif, would "maximise production, serving as a natural hedge to the current low oil price environment."
In addition to its increasing production in the Netherlands, the company also continues to operate and expand in the UK. Last year, Parkmead was awarded a new UK offshore licence, covering Block 205/13, which is located near to an existing Parkmead licence in the West Shetland area. The company is now targeting two new prospects in the new licences, Sanda North and Sanda South.
In contrary to many explorers and producers, Parkmead sees the current low oil price as a situation that is creating opportunity for the firm.
"Parkmead is well positioned to take advantage of the lower oil price environment and the opportunities that are arising from this," CEO Tom Cross said on March 24. "We have excellent regional expertise, significant cash resources and a growing, low-cost gas portfolio. The group will continue with its licensing and acquisition-led growth strategy, securing opportunities that maximise long-term value for our shareholders.”
Erica Mills