TIDMPMG
RNS Number : 4467U
Parkmead Group (The) PLC
29 March 2019
29 March 2019
The Parkmead Group plc
("Parkmead", "the Company" or "the Group")
Interim Results for the six-month period ended 31 December
2018
Parkmead, the UK and Netherlands-focused group, with four
business areas, is pleased to report its interim results for the
six-month period ended 31 December 2018.
HIGHLIGHTS
Major growth in revenue and profits
-- Revenue increased by 95% to GBP5.3 million (2017: GBP2.7 million)
-- Gross profit more than doubled for the period to GBP3.8
million (2017: GBP1.4 million), an increase of 181%
-- Net profit for the period of GBP2.2 million (2017: GBP4.5 million loss)
-- Interim earnings per share of 2.23 pence (2017: loss per share of 4.57 pence)
-- Parkmead is cash flow positive on an operating basis
-- Strong total asset base of GBP79.9 million at 31 December 2018 (2017: GBP75.8 million)
-- Well capitalised, with cash balances of US$30.1 million
(GBP23.6 million) as at 31 December 2018 (2017: GBP24.4
million)
-- GBP6.2 million received post period-end from sale of the
Group's stake in Faroe Petroleum plc
-- Maintained strict financial discipline
-- Debt free
-- Low-cost Netherlands gas production, plus benchmarking &
economics consultancy, provides positive cash flow to Parkmead
Strong gas production achieved; multiple new opportunities
identified
-- Average gross production at Diever West for the six-month
period was 48.1 million cubic feet per day ("MMscfd"),
approximately 8,293 barrels of oil equivalent per day ("boepd"), a
54% increase on the average gross production for the six-month
period ended 31 December 2017 of 31.2 MMscfd
-- A change in production tubing successfully completed, leading to increased deliverability
-- Excellent regional gas prices in the Netherlands during the period
-- Numerous exploration opportunities identified nearby Diever
West, with similar characteristics
-- Boergrup and Leemdijk prospects de-risked by nearby productive fields
-- Dynamic reservoir modelling suggests Diever West has
approximately 108 billion cubic feet ("Bcf") of gas-in-place, more
than double the post-drill static volume estimate of 41 Bcf
-- Onshore gas portfolio in the Netherlands produces from four
separate gas fields with an average operating cost of just US$12.3
per barrel of oil equivalent
-- Further production enhancement work is planned on Parkmead's Netherlands portfolio
Progress on valuable development projects; potential Greater
Perth Area tie-back
-- Parkmead has entered into commercial discussions with the
Scott field partnership, led by China National Offshore Oil
Corporation (CNOOC) International, in order to explore terms for a
tie-back of the Greater Perth Area ("GPA") oil hub project to the
Scott facilities
-- A tie-back to Scott is one path to potentially unlock the
substantial value of the GPA project
-- Parkmead also holding discussions with a number of leading,
internationally-renowned service companies in relation to the GPA
project
-- CNOOC's Scott facilities lie approximately 10km southeast of Parkmead's GPA project
-- Parkmead now in full control of the GPA oil hub project with operatorship and 100% equity
-- Platypus gas field joint venture partnership is optimising
export route ahead of an offtake agreement, with various export
options available
-- First gas at Platypus targeted for 2021 at rates in excess of
50 MMscfd per day, with further potential upside from the Possum
prospect
-- Verbier appraisal drilling by Equinor could significantly
increase the value of nearby oil and gas assets already owned by
Parkmead, such as Polecat and Marten, given the available
infrastructure options
37% increase in oil and gas resources
-- 2C resources increased by 37% to 100.9 million barrels of oil
equivalent ("MMBoe") as at 1 March 2019 (73.9 MMBoe as at 1 March
2018)
-- Considerable 2P reserves of 46.0 MMBoe as at 1 March 2019 (46.3 MMBoe as at 1 March 2018)
Well positioned for further acquisitions and opportunities
-- Seven acquisitions, at both asset and corporate level, have been completed to date
-- Parkmead is actively evaluating further growth opportunities,
including wider energy-related opportunities
Parkmead's Executive Chairman, Tom Cross, commented:
"I am pleased to report excellent progress in the six-month
period to 31 December 2018. Parkmead has delivered major growth in
its revenue and profits. This is an outstanding achievement,
creating a strong foundation from which to build.
Parkmead benefits from increasing balance within the Group, with
four complementary areas of the business: Netherlands Gas, UK Oil
and Gas, Performance Benchmarking and Economics, and Future
Opportunities. The combination of these components adds strength
and quality to Parkmead's operations.
We are delighted to have significantly grown gas production at
the Diever West field, which increases Parkmead's cash flow.
We are also pleased with the major advances made within the
Greater Perth Area project. The Group is in discussions with
leading, international service companies and oil companies in
relation to driving forward the GPA project.
The team at Parkmead is working intensively to evaluate and
execute further value-adding opportunities, which could provide
additional upside to the Company. These are primarily
energy-related and include wider opportunities, which could broaden
and enhance the Group's asset base and revenue stream.
Parkmead is well positioned for the future. We have excellent UK
and Netherlands regional expertise, significant cash resources, 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, securing opportunities
that maximise long-term value for our shareholders."
For enquiries please contact:
The Parkmead Group plc +44 (0) 1224 622200
Tom Cross (Executive Chairman)
Ryan Stroulger (Chief Financial Officer)
Arden Partners plc +44 (0) 20 7614 5900
(Financial Adviser, NOMAD and Corporate
Broker to Parkmead)
Ciaran Walsh
Maria Gomez de Olea
Instinctif Partners Limited (PR Adviser +44 (0) 20 7457 2020
to Parkmead)
David Simonson
Sarah Hourahane
Dinara Shikhametova
Review of Activities
Parkmead has delivered significant growth across its oil and gas
operations in the UK and the Netherlands, continuing to build a
high-quality portfolio.
In May 2018, Parkmead was provisionally awarded nine new UK oil
and gas blocks and part blocks spanning five new licences in the UK
30th Licensing Round. These new licences were formally awarded in
the second half of 2018 and Parkmead's experienced team have begun
various work programmes across the blocks. These newly awarded
licences are all operated by Parkmead and are located in the
Central North Sea, Southern North Sea and West of Shetland
areas.
Two of the new awards cover the highly prospective Skerryvore
area and contain seven new prospects, three of which are stacked.
The Skerryvore Mey prospect overlies two stacked Chalk prospects
(Skerryvore Ekofisk and Skerryvore Tor) which are associated with
Skerryvore, a Zechstein salt diapir. The Chalk in these prospects
is thought to have been re-worked, which significantly improves
permeability over conventional Chalk reservoirs. These three
stacked prospects have the potential to contain 157 million barrels
of recoverable oil equivalent on a P50 basis.
An additional Paleocene Mey prospect (Skerryvore West) and one
Chalk prospect (Skerryvore North) are also identified on the
blocks. The proposed work programme includes rock physics studies,
reprocessing 3D seismic and a contingent well. Parkmead's
co-venturers on the licence are Serica Energy, Zennor Petroleum and
CalEnergy Gas. Parkmead's equity stake is 30%.
These new awards also include acreage containing the Lowlander
oil field, in close proximity to Parkmead's GPA project. Lowlander
lies 17km north west of the Parkmead operated Perth field which is
at the centre of the Company's GPA oil hub project. Lowlander is an
Upper Jurassic Piper sandstone discovery, appraised by five wells
and contains 2C oil resources of 20.5 million barrels of
recoverable oil on a P50 basis. The Lowlander field is
strategically important to Parkmead because it could be developed
in conjunction with the GPA project. The block also contains
Midlander, an Upper Jurassic turbidite sandstone discovery to the
north east of Lowlander that could add to Parkmead's resource base
in the area. The work programme consists of obtaining 3D seismic
and a drill or drop well.
The addition of the Lowlander field increases Parkmead's 2C
resources by 37% to 100.9 MMBoe.
Parkmead has been awarded one new licence adjacent to an
existing block that is already operated by the Group in the West of
Shetland area.
Block 205/12 (Parkmead 100%) is situated in the Faroe-Shetland
Basin immediately to the west of the Parkmead operated block
205/13, which contains the Sanda prospect. One large prospect,
Davaar, has been identified in Block 205/12 and is a combination
structural and stratigraphic trap in the Vaila Formation. The
Palaeocene Vaila Formation is the primary play fairway on this
acreage and forms the reservoir in the adjacent Foinaven,
Schiehallion and Loyal oil fields and the Laggan and Tormore gas
fields. Parkmead will undertake reprocessing of the existing legacy
seismic with a new 3D seismic shoot, contingent on the results, and
a drill or drop well. Davaar has the potential to contain 204
million barrels of recoverable oil on a P50 basis.
Parkmead has been awarded a new licence in the Southern Gas
Basin. This is an area where the Company has a deep technical
knowledge of exploration plays and is building a portfolio of
targets. Parkmead has already had significant success in the
Southern Gas Basin with the gas discovery at Platypus. The field
was subsequently appraised with a horizontal well and flow tested
at a rate of 27 MMscfd (approximately 4,600 boepd on an equivalent
basis).
Blocks 47/10d & 48/6d (Parkmead 75%) contain the Blackadder
prospect and Teviot gas discovery. The Permian Rotliegendes
Sandstone is the primary play fairway on the acreage and is proven
productive by the numerous discoveries in the area including West
Sole, Hyde and Amethyst. The work programme contains a drill or
drop well. Parkmead's co-venturer on this licence is Cluff Natural
Resources.
Considerable progress has been made at Parkmead's Platypus gas
field development. The joint venture partnership is currently
working towards optimising the export route for Platypus ahead of
an offtake agreement. Various export options are available to the
partnership, given the extensive availability of infrastructure in
the UK Southern Gas Basin. First gas at Platypus is targeted for
2021 at rates in excess of 50 MMscfd per day, not including the
additional upside from the Possum prospect which is planned to be
drilled as part of the development.
Parkmead has entered into commercial discussions with the Scott
field partnership, led by China National Offshore Oil Corporation
(CNOOC) International, in order to explore terms for a tie-back of
the GPA oil hub project to the Scott facilities. The Scott
facilities lie just some 10km southeast of the GPA project and a
tie-back could yield a number of mutually beneficial advantages for
both the Scott partnership and Parkmead. A tie-back to Scott is one
path to potentially unlock the substantial value of the GPA
project. Parkmead is also holding discussions with a number of
leading, internationally-renowned service companies in relation to
the GPA project.
Planned 2019 appraisal drilling near to Parkmead licences
Parkmead notes the appraisal drilling which is occurring close
to the Parkmead operated Polecat and Marten oil fields in the UK
Central North Sea. It has been announced that Equinor have
commenced appraisal drilling at the Verbier discovery located in
Blocks 20/5b & 21/1d, approximately 12km east of Polecat and
Marten. Verbier is estimated to contain between 25 and 130 MMBoe.
The appraisal drilling will seek to refine the potential volume
range of the discovery. Verbier lies in the same play fairway as
Polecat and Marten and shares many similarities with these fields.
In light of the Maximising Economic Recovery (MER) strategy adopted
in the UK North Sea and infrastructure options in the area, the
Verbier appraisal results could have the potential to significantly
increase the value of nearby oil and gas assets already owned by
Parkmead.
Strong Netherlands asset base
The Parkmead portfolio includes producing gas fields with a very
low operating cost. This profitable gas production from the
Netherlands provides important cash flow to the Group.
Average gross production at Diever West for the six-month period
was 48.1 MMscfd, approximately 8,293 boepd. The Group substantially
increased production from the Diever West gas field in 2018. After
perforating the Akkrum formation section of the reservoir, a change
in production tubing was successfully completed on the field. This
intervention has led to the production achieving its full potential
from the two perforated intervals.
The Diever West field has performed above expectations since its
first production. Dynamic reservoir modelling suggests that the
field holds approximately 108 billion cubic feet of gross
gas-in-place, this is more than double the earlier, post-drill
static volume estimate of 41 billion cubic feet.
A large number of further exploration opportunities exist within
the Drenthe VI concession, which contains the Diever West field.
The Boergrup prospect, located to the west of Diever, is a stacked
Rotliegendes/Vlieland sandstone structure situated between three
productive fields; De Hoeve, Vinkega and Diever West. A further
significant prospect on the Drenthe VI licence is Leemdijk.
Leemdijk consists of three fault bounded dip closures which are
potentially in communication, forming one larger structure.
Detailed work has begun on the Ottoland oil and gas discovery,
located on the same Andel Va block as the Brakel gas field. The
Ottoland discovery well encountered 75ft of net oil pay in two
Triassic sandstone formations. Seismic interpretation and depth
migration studies, followed by structural and static modelling,
will refine the volumetrics ahead of a development plan,
potentially including a new horizontal well. In addition, seismic
reprocessing has been completed on the Andel Vb licence ahead of
updating the prospectivity estimates for this area.
At Parkmead's producing Geesbrug gas field, the potential for a
new low-cost infill well is being studied in order to maximise
production. In addition, compressor optimisation work at the
Grolloo field is expected to be carried out in 2019.
Results
During the six-month period to 31 December 2018, the Group
generated revenues of GBP5.3 million (2017: GBP2.7 million).
Parkmead more than doubled its gross profit for the period to
GBP3.8 million (2017: GBP1.4 million profit) delivering a net
profit of GBP2.2 million (2017: GBP4.5 million loss).
This is a significant achievement and is testament to the
success of the Group's onshore gas portfolio and careful financial
discipline. The Group's gas portfolio in the Netherlands generates
positive cash flows and Parkmead's four separate gas fields have an
average operating cost of just US$12.3 per barrel of oil
equivalent.
Administrative expenses/credits amounted to a GBP0.3 million
credit (2017: GBP0.3 million expense). Underlying administrative
expenses (not including non-cash share based payment
credits/charges) are continually being monitored and reviewed to
ensure that Parkmead maintains a strong balance sheet.
Parkmead's total assets as at 31 December 2018 stood at GBP79.9
million (2017: GBP75.8 million). Financial assets were GBP5.7
million (2017: GBP4.1 million). Cash and cash equivalents at year
end were GBP23.6 million (2017: GBP24.4 million). Parkmead is very
carefully managed and remains debt free. Interest bearing loan
assets were GBP3.0 million (2017: GBP1.7 million). The Group's net
asset value was GBP66.6 million (2017: GBP65.2 million). Parkmead
is therefore well positioned for growth. This positive position is
a direct result of experienced portfolio management and a strong
focus on the Company's capital discipline.
Investments
The Group's largest investment is in Faroe Petroleum plc (LSE
AIM: FPM.L). As at 31 December 2018, this investment was carried at
a value of GBP5.7 million.
In January 2019, post reporting period end, a recommended cash
offer for Faroe Petroleum was made by DNO ASA of 160 pence for each
share in Faroe Petroleum. This offer was successful, and as a
result, Parkmead received GBP6.2 million at the end of January
2019.
Outlook
Parkmead has delivered considerable growth in both its financial
position and asset base in the six-month period to 31 December
2018. This was achieved by more than doubling Parkmead's gross
profit and increasing gas production from the low-cost onshore
Netherlands portfolio, as well as increasing the Group's asset base
through the success in the UK 30th Licensing Round.
The Directors of Parkmead are pleased with the Group's
continuing progress in building a high-quality business of
increasing breadth and scale. Parkmead has a strong core of
profitable gas production and a balanced portfolio with significant
upside. Therefore, we believe Parkmead is well positioned to build
further on the progress to date and to capitalise on new
opportunities. We are delighted by the operational enhancements
achieved at Diever West and the increased cash flow this has
resulted in.
Parkmead clearly benefits from increasing balance within the
Group, with four complementary arms of the business: Netherlands
Gas, UK Oil and Gas, Benchmarking and Economics, and Future
Opportunities. The combination of these components adds strength
and value to Parkmead's operations.
As we move further into 2019, Parkmead maintains its appetite
for acquisitions and is looking carefully at a number of
opportunities. The Board of Directors believes that Parkmead is
well positioned to drive the business forward and to build upon the
achievements already made to date.
Tom Cross
Executive Chairman
28 March 2019
This announcement contains inside information for the purposes
of Article 7 of Regulation 596/2014. Upon the publication of this
announcement, the information contained herein is now considered to
be in the public domain.
Notes:
1. Dr Colin Percival, Parkmead's Technical Director, who holds a
First Class Honours Degree in Geology and a Ph.D in Sedimentology
and has over 35 years of experience in the oil and gas industry,
has reviewed and approved the technical information contained in
this announcement. Reserves and contingent resource estimates are
stated as at 1 March 2019. Parkmead's evaluation of reserves and
resources was prepared in accordance with the 2007 Petroleum
Resources Management System prepared by the Oil and Gas Reserves
Committee of the Society of Petroleum Engineers and reviewed and
jointly sponsored by the World Petroleum Council, the American
Association of Petroleum Geologists and the Society of Petroleum
Evaluation Engineers.
Glossary of key terms
boped Barrels of oil equivalent per day
Bcf Billions of cubic feet of gas
Gas in place The total quantity of gas that is estimated to exist originally in naturally
occurring reservoirs
Oil in place The total quantity of oil that is estimated to exist originally in naturally
occurring reservoirs
Contingent Resources Those quantities of petroleum estimated, as of a given date, to be potentially
recoverable
from known accumulations by application of development projects but which are not
currently
considered to be commercially recoverable due to one or more contingencies.
Contingent Resources
are a class of discovered recoverable resources
Recoverable resources Those quantities of hydrocarbons that are estimated to be producible from discovered
or undiscovered
accumulations
Proved and Probable or "2P" Those additional Reserves which analysis of geoscience and engineering data indicate
are less
likely to be recovered than Proved Reserves but more certain to be recovered than
Possible
Reserves. It is equally likely that actual remaining quantities recovered will be
greater
than or less than the sum of the estimated Proved plus Probable Reserves (2P). In
this context,
when probabilistic methods are used, there should be at least a 50 per cent.
probability that
the actual quantities recovered will equal or exceed the 2P estimate
Reserves Reserves are those quantities of petroleum anticipated to be commercially recoverable
by application
of development projects to known accumulations from a given date forward under
defined conditions.
Reserves must further satisfy four criteria: they must be discovered, recoverable,
commercial,
and remaining (as of the evaluation date) based on the development project(s)
applied. Reserves
are further categorized in accordance with the level of certainty associated with the
estimates
and may be sub-classified based on project maturity and/or characterized by
development and
production status
P50 Reflects a volume estimate that, assuming the accumulation is developed, there is a
50% probability
that the quantities actually recovered will equal or exceed the estimate. This is
therefore
a median or best case estimate
2C Denotes the best estimate scenario, or P50, of Contingent Resources
FEED Front End Engineering Design
Group statement of profit or loss
for the six months ended 31 December 2018
Six months Six months Twelve months
to 31 December to 31 December to 30 June
2018 2017 2018
Notes (unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Revenue 5,274 2,707 7,022
Cost of sales (1,432) (1,339) (2,960)
Gross profit 3,842 1,368 4,062
Exploration and evaluation expenses 2 (162) (4,815) (5,244)
Administrative (expenses)/credit 3 304 (301) (4,153)
----------------------------------------------- --------- ---------------- ---------------- --------------
Operating profit / (loss) 3,984 (3,748) (5,335)
Finance income 76 19 92
Finance costs (269) (352) (645)
Profit / (loss) before taxation 3,791 (4,081) (5,888)
Taxation (1,586) (437) (1,259)
----------------------------------------------- --------- ---------------- ---------------- --------------
Profit / (loss) for the period attributable
to the equity
holders of the Parent 2,205 (4,518) (7,147)
---------------------------------------------------------- ---------------- ---------------- --------------
Earnings / (loss) per share (pence)
Basic 6 2.23 (4.57) (7.22)
Diluted 2.04 (4.57) (7.22)
Group statement of profit or loss and other comprehensive income
for the six months ended 31 December 2018
Twelve
Six months Six months months
to 31 December to 31 December to 30 June
2018 2017 2018
Notes (unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Profit / (loss) for the period 2,205 (4,518) (7,147)
----------------------------------------------- --------- ---------------- ---------------- ----------------
Other comprehensive income
Items that will not be reclassified
subsequently to profit or loss
Gain on disposal of financial
assets 5 130 - -
Fair value gain on financial
assets 5 15 - -
----------------------------------------------- --------- ---------------- ---------------- ----------------
145 - -
Items that may be reclassified
subsequently to profit or loss
Fair value gain on financial
assets - 855 2,473
----------------------------------------------- --------- ---------------- ---------------- ----------------
- 855 2,473
Income tax relating to components
of other comprehensive income - - -
Other comprehensive income for
the period, net of tax 145 855 2,473
Total comprehensive profit /(loss)
for the period attributable to
the equity holders of the Parent 2,350 (3,663) (4,674)
----------------------------------------------- --------- ---------------- ---------------- ----------------
Group statement of financial position
as at 31 December 2018
At 31
December At 31 December At 30 June
2018 2017 2018
Notes (unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment: development
& production 12,442 12,850 12,292
Property, plant and equipment: other 154 39 38
Goodwill 2,174 2,174 2,174
Exploration and evaluation assets 31,381 29,360 30,308
Financial assets 5 5,715 4,082 5,700
Interest bearing loans 2,967 1,711 2,930
Deferred tax assets 3 3 3
Total non-current assets 54,836 50,219 53,445
-------------------------------------------- ------ ------------ --------------- -----------
Current assets
Trade and other receivables 1,466 1,168 1,294
Current tax asset - - 343
Cash and cash equivalents 23,552 24,415 23,804
Total current assets 25,018 25,583 25,441
-------------------------------------------- ------ ------------ --------------- -----------
Total assets 79,854 75,802 78,886
-------------------------------------------- ------ ------------ --------------- -----------
Current liabilities
Trade and other payables (4,774) (2,608) (5,407)
Current tax liabilities (576) (440) (1,279)
Total current liabilities (5,350) (3,048) (6,686)
-------------------------------------------- ------ ------------ --------------- -----------
Non-current liabilities
Other liabilities (32) (82) (275)
Deferred tax liabilities (1,284) (1,284) (1,284)
Decommissioning provisions (6,598) (6,171) (6,417)
-------------------------------------------- ------ ------------ --------------- -----------
Total non-current liabilities (7,914) (7,537) (7,976)
-------------------------------------------- ------ ------------ --------------- -----------
Total liabilities (13,264) (10,585) (14,662)
-------------------------------------------- ------ ------------ --------------- -----------
Net assets 66,590 65,217 64,224
-------------------------------------------- ------ ------------ --------------- -----------
Equity attributable to equity holders
Called up share capital 19,533 19,533 19,533
Share premium 87,805 87,805 87,805
Revaluation reserve (310) (1,943) (325)
Retained deficit (40,438) (40,178) (42,789)
-------------------------------------------- ------ ------------ --------------- -----------
Total equity 66,590 65,217 64,224
-------------------------------------------- ------ ------------ --------------- -----------
Group statement of changes in equity
for the six months ended 31 December 2018
Share capital Share Revaluation Retained Total
premium reserve deficit
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 2017 19,533 87,805 (2,798) (35,660) 68,880
Loss for the
period - - - (4,518) (4,518)
Fair value gain
on financial
assets - - 855 - 855
Total comprehensive
income / (loss)
for the period - - 855 (4,518) (3,663)
Share-based payments - - - - -
---------------------- -------------- --------- ------------ --------- --------
At 31 December
2017 19,533 87,805 (1,943) (40,178) 65,217
---------------------- -------------- --------- ------------ --------- --------
Loss for the
period - - - (2,629) (2,629)
Fair value gain
on financial
assets - - 1,618 - 1,618
---------------------- -------------- --------- ------------ --------- --------
Total comprehensive
loss for the
period - - 1,618 (2,629) (1,011)
Share-based payments - - - 18 18
---------------------- -------------- --------- ------------ --------- --------
At 30 June 2018 19,533 87,805 (325) (42,789) 64,224
---------------------- -------------- --------- ------------ --------- --------
Profit for the
period - - - 2,205 2,205
Gain on disposal
of financial
assets - - - 130 130
Fair value gain
on financial
assets - - 15 - 15
Total comprehensive
income for the
period - - 15 2,335 2,350
Share-based payments - - - 16 16
---------------------- -------------- --------- ------------ --------- --------
At 31 December
2018 19,533 87,805 (310) (40,438) 66,590
---------------------- -------------- --------- ------------ --------- --------
Group statement of cashflows
for the six months ended 31 December 2018
Twelve
Six months Six months months
to 31 December to 31 December to 30 June
2018 2017 2018
(unaudited) (unaudited)
Notes GBP'000 GBP'000 GBP'000
Cashflows from operating activities
Cashflows from operations 7 3,164 1,077 2,973
Taxation paid (1,949) (457) (777)
------------------------------------------- ------ ---------------- ---------------- ------------
Net cash generated from operating
activities 1,215 620 2,196
------------------------------------------- ------ ---------------- ---------------- ------------
Cash flow from investing activities
Interest received 40 19 62
Acquisition of exploration and evaluation
assets (1,633) (895) (1,892)
Acquisition of property, plant and
equipment: development and production - (74) (81)
Acquisition of property, plant and
equipment: other (144) (4) (19)
Proceeds from financial assets 130 - -
Loans issued - (1,711) (2,900)
Net cash used in investing activities (1,607) (2,665) (4,830)
------------------------------------------- ------ ---------------- ---------------- ------------
Cash flow from financing activities
Interest paid (22) (1) (34)
Net cash used in financing activities (22) (1) (34)
------------------------------------------- ------ ---------------- ---------------- ------------
Net decrease in cash and cash equivalents (414) (2,046) (2,668)
------------------------------------------- ------ ---------------- ---------------- ------------
Cash and cash equivalents at beginning
of period 23,804 26,396 26,396
Effect of foreign exchange rate
differences 162 65 76
------------------------------------------- ------ ---------------- ---------------- ------------
Cash and cash equivalents at end
of period 23,552 24,415 23,804
------------------------------------------- ------ ---------------- ---------------- ------------
Notes to the Interim financial statements
1 Accounting policies
Basis of preparation
The interim financial information in this report has been
prepared using accounting policies consistent with International
Financial Reporting Standards (IFRS) as adopted by the European
Union and IFRS Interpretations Committee (IFRIC) interpretations.
IFRS is subject to amendment and interpretation by the
International Accounting Standards Board (IASB) and IFRIC and there
is an ongoing process of review and endorsement by the European
Commission. The financial information has been prepared on the
basis of IFRS that the Directors expect to be adopted by the
European Union and applicable as at 30 June 2019.
The Group has chosen not to adopt IAS 34 - Interim Financial
Statements, in preparing these financial statements.
The accounting policies applied in this report are the same as
those applied in the consolidated financial statements for the year
ended 30 June 2018, with the exception of IFRS 9 "Financial
Instruments" and IFRS 15 "Revenue from contracts with customers"
which are new standards applicable mandatory for the year ending 30
June 2019. These new standards are not expected to have a material
impact on the financial statements.
Non-statutory accounts
The financial information set out in this interim report does
not constitute the Group's statutory accounts.
The financial information for the year ended 30 June 2018 has
been extracted from the audited statutory accounts. The statutory
accounts for the year ended 30 June 2018 have been delivered to the
Registrar of Companies. The auditors reported on those accounts;
their report was unqualified, did not contain a statement under
either Section 498 (2) or Section 498 (3) of the Companies Act 2006
and did not include references to any matters to which the auditor
drew attention by way of emphasis.
The financial information for the 6 months ended 31 December
2018 and 31 December 2017 is unaudited.
2 Impairment of exploration and evaluation assets
Exploration and evaluation expenses includes impairment charges
of GBPNil recorded in respect of exploration licences relinquished
in the period. (Six months to 31 December 2017: GBP4,508,000,
Twelve months to 30 June 2018: GBP4,966,000).
3 Administrative (expenses)/credit
Administrative (expenses)/credit include a credit in respect of
a non-cash revaluation of share appreciation rights (SARs)
totalling GBP704,000 (Six months to 31 December 2017: GBP345,000
credit, Twelve months to 30 June 2018: GBP2,488,000 debit). The
SARs may be settled by cash or shares and are therefore revalued
with the movement in share price. The valuation was impacted by the
decrease in The Parkmead Group plc share price between 30 June 2018
and 31 December 2018.
Administrative (expenses)/credit also includes a credit for
foreign exchange gains of GBP177,000 (Six months to 31 December
2017: GBP17,000 credit, Twelve months to 30 June 2018: GBP16,000
credit).
4 Interest bearing loans
On 27 July 2017, The Parkmead Group plc entered into a credit
facility with Energy Management Associates Limited, whereby
Parkmead agreed to lend up to GBP2,900,000 to Energy Management
Associates Limited.
The Loan has a period of two years, with a fixed interest rate
of 2.5 per cent.
GBP2,900,000 has been lent to Energy Management Associates
Limited by The Parkmead Group Plc as at 31 December 2018. Interest
charged during the period amounted to GBP37,000. (Six months to 31
December 2017: GBP11,000, Twelve months to 30 June 2018:
GBP41,000). Outstanding interest due at 31 December 2018 was
GBP67,000.
Notes to the Interim financial statements
5 Financial assets
In the previous year's financial statements, fair value gains or
losses on equity investments were recognised in other comprehensive
income in accordance with IAS 39 but were classified as 'items that
may be reclassified subsequently to profit or loss.' In this year's
financial statements, in accordance with IFRS 9, the Group has
elected to recognize fair value gains and losses on its investment
in Faroe Petroleum and gain on disposal of Webroot in the statement
of other comprehensive income. However, any subsequent disposals
would be recognised in the statement of other comprehensive income
rather than recognised through the statement of profit or loss.
Hence they have been classified as such in the current year
financial statements. The Group have chosen not to restate prior
year comparatives.
The Group's largest investment is in Faroe Petroleum plc. As at
31 December 2018, it was valued at a fair value of GBP5.7
million.
In January 2019, post period end, a recommended cash offer for
Faroe Petroleum was received from DNO ASA of 160 pence for each
share in Faroe Petroleum. This offer was successful and Parkmead
received GBP6.2 million at the end of January 2019.
6 Earnings / (loss) per share
Earnings / (loss) per share attributable to equity holders of
the Company arise as follows:
Twelve
Six months Six months months
to 31 December to 31 December to 30 June
2018 2017 2018
(unaudited) (unaudited)
Earnings / (loss) per 1.5p ordinary
share (pence)
Basic 2.23 (4.57) (7.22)
Diluted 2.04 (4.57) (7.22)
--------------------------------------- ---------------- ---------------- ------------
The calculations were based on the following information:
Twelve
Six months Six months months
to 31 December to 31 December to 30 June
2018 2017 2018
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Earnings / (loss) attributable
to ordinary shareholders 2,205 (4,518) (7,147)
Weighted average number of shares
in issue
Basic weighted average number of
shares 98,929,160 98,929,160 98,929,160
------------------------------------ ---------------- ---------------- ------------
Dilutive potential ordinary shares
Share options 9,314,068 9,314,068 9,314,068
------------------------------------ ---------------- ---------------- ------------
Basic earnings/(loss) per share is calculated by dividing the
profit or loss for the period by the weighted average number of
ordinary shares outstanding during the period.
Diluted earnings per share is calculated by dividing the profit
for the period by the weighted average number of ordinary shares
outstanding during the period plus the weighted average number of
ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.
Diluted loss per share
Loss per share requires presentation of diluted loss per share
when a company could be called upon to issue shares that would
decrease net profit or increase net loss per share. When the Group
makes a loss the outstanding share options are therefore
anti-dilutive and so are not included in dilutive potential
ordinary shares.
Notes to the Interim financial statements
7 Notes to the statement of cashflows
Reconciliation of operating loss to net cash flow from
operations
Twelve
Six months Six months months
to 31 December to 31 December to 30
2018 2017 June 2018
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Operating profit / (loss) 3,984 (3,748) (5,335)
Depreciation 173 364 536
Amortisation and exploration write-off - 4,508 4,966
Provision for share based payments 16 (333) 18
Currency translation adjustments (162) (65) (76)
Increase in receivables (171) (241) (368)
Increase/(decrease) in payables (676) 592 3,232
Net cash flow from operations 3,164 1,077 2,973
---------------------------------------- ---------------- ---------------- -----------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR EAKDNASLNEEF
(END) Dow Jones Newswires
March 29, 2019 03:02 ET (07:02 GMT)
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