TIDMPMG
RNS Number : 8386U
Parkmead Group (The) PLC
31 March 2023
31 March 2023
The Parkmead Group plc
("Parkmead", "the Company" or "the Group")
Interim Results for the six-month period ended 31 December
2022
Parkmead, the independent energy group focused on growth through
gas, oil and renewable energy projects, is pleased to report its
interim results for the six-month period ended 31 December
2022.
HIGHLIGHTS
Strong operating cashflow, delivered through low-cost onshore
gas production
-- Revenue more than doubled to GBP11.1 million for the period
(2021: GBP4.6 million) as the Company benefited from robust
production through a sustained period of high gas prices
-- Net cash generated from operating activities rose strongly,
by over 400% to GBP8.6 million (2021: GBP1.7 million) equivalent to
8.0 pence per share
-- Gross profit increased to GBP9.8 million (2021: GBP3.8
million) generating a gross margin of 89%
-- Strong gross profits were nevertheless offset by a GBP4.8
million tax charge, principally arising from Netherlands
operations, and a GBP4.0 million windfall tax charge expensed
during the period but due for payment in May 2024
-- Average realised gas price throughout the period of EUR153.04/MWh
-- Average field operating cost in the period of just US$8.6 per
barrel of oil equivalent, generating strong operating cash
flows
-- Strong balance sheet with cash balances of GBP19.2 million
(2021: GBP24.1 million) as at 31 December 2022, equal to 17.6 pence
per share
-- An impairment of GBP12.7 million was recorded during the
period relating to licence P1293, following the decommissioning of
the Athena field
-- Net loss before impairment charge of GBP1.2 million (2021: GBP0.4 million)
-- Total assets of GBP70.3 million at 31 December 2022 (2021: GBP80.5 million)
Successful exploration drilling campaign and robust production
in the Netherlands
-- LDS-01 successfully encountered new commercial gas columns in the primary target horizons
-- Tie-in of LDS-01 is complete with first gas expected imminently
-- Both LDS-01 and LDS-02 were drilled safely, on time and under budget
-- LDS-02 did not encounter commercial volumes of hydrocarbons
in the targeted intervals however the well has been suspended and
is being assessed for reuse as a side-track into nearby targets
-- Average gross production for the period across the Group's
Netherlands assets was 18.0 MMscfd, approximately 3,205 barrels of
oil equivalent per day ("boepd")
-- Papekop field development has made significant progress in
recent months, as the joint venture aims to accelerate the
project
Well planning activities underway on the exciting Skerryvore
exploration targets
-- Well and site survey planning work has commenced with a rig
tendering process due to start in Q2 2023
-- An extensive tender process was completed in January 2023 for
the well management services and the contract was awarded to Exceed
Energy, an industry-leader in well management and performance
solutions
-- Parkmead increased its equity in Skerryvore to 50%, and
progressed the project to Phase C as Licence Exploration Operator
with strong industry partners
-- Skerryvore consists of stacked light oil prospects at Mey and Tor intervals
UKCS 33(rd) Offshore Oil & Gas Licensing Round
-- Parkmead, as one of the leading UK independents, remains
committed to the UKCS oil and gas industry and made selective
applications in the UKCS 33(rd) Offshore Oil and Gas Licensing
Round, the outcome of which will be known later in 2023
Record revenue delivered from Kempstone Hill Wind Farm
-- Revenue of GBP343,000 in the six months to 31 December 2022
-- 245% increase in average exported power price realised
-- Over 95% uptime achieved during the period
-- Greencat Renewables have been appointed to review methods of
increasing electricity generation and utilising spare generation
capacity at the Kempstone Hill
-- Kempstone Hill Wind Farm provides power for up to 1,000 homes
and has an attractive inflation-linked, Feed-in Tariff through
until 2036
-- Electricity is sold through a power purchase agreement which
provides valuable upside through strong wholesale electricity
prices
Multiple new renewable energy projects under consideration
-- Environmental studies are ongoing at Pitreadie which are
expected to form part of a major wind farm planning application
-- Parkmead is also conducting a scoping study on a new site in
Scotland which has the potential for a solar farm
Substantial oil and gas reserves
-- 2P reserves of 45.5 MMBoe as at 1 March 2023 (45.6 MMBoe as at 1 March 2022)
Well positioned for further acquisitions and opportunities
-- Parkmead is actively evaluating further acquisition
opportunities in each of its areas of activity - renewables, gas
and oil
Parkmead's Executive Chairman, Tom Cross, commented:
"I am pleased to report that strong operating performance has
been achieved by Parkmead in the six-month period to 31 December
2022.
In line with our strategy, Parkmead now benefits from stable
revenue generated by clean, renewable sources, onshore Scotland.
This is in addition to our high-quality onshore gas assets across
the Netherlands.
The Group has achieved an increase in revenue of over 140% on
the prior year period, and outstanding growth in net cash generated
from operating activities of over 400%.
Parkmead's successful drilling campaign in the Netherlands has
resulted in the LDS-01 well encountering new commercial gas
volumes. This well has been swiftly tied into production
infrastructure, with first gas due imminently.
We continue to maintain strict financial discipline across all
our existing energy projects. This is in addition to the ongoing
evaluation of acquisition opportunities that will complement the
Group and maximise shareholder value."
Enquiries:
The Parkmead Group plc +44 (0) 1224 622200
Tom Cross (Executive Chairman)
Ryan Stroulger (Finance Director)
Henry Steward (Group Commercial Manager)
finnCap Ltd +44 (0) 20 7220 0500
Marc Milmo / Seamus Fricker - Corporate
Finance
Andrew Burdis / Barney Hayward - ECM
Financial Performance
During the six-month period to 31 December 2022, the Group
increased its revenue by over 140% to GBP11.1 million (2021: GBP4.6
million) as Dutch TTF gas prices continued to remain above
historical averages. The Group's high-quality onshore asset base in
the Netherlands, as well as the addition of renewable wind energy
production in Scotland, has provided a strong underlying operating
profit margin.
Net cash generated from operating activities rose strongly by
over 400% to GBP8.6 million (2021: GBP1.7 million). Parkmead
delivered an operating profit before non-cash impairments of GBP7.6
million for the half year (2021: GBP1.8 million), or 7.0p on a per
share basis. An impairment of GBP12.7 million was recorded during
the period relating to licence P1293, following the decommissioning
of the Athena field. Administrative expenses amounted to GBP2.0
million (2021: GBP1.5 million) which included a non-cash expense of
GBP0.8 million in respect of a revaluation of share appreciation
rights. The Group realised a loss before tax of GBP5.2 million
(2021: GBP1.3 million profit before tax). Taxation for the period,
excluding windfall tax, was GBP4.8 million (2021: GBP1.7 million)
due to high average gas prices achieved and the low-cost nature of
our onshore assets. The loss after taxation, excluding the Athena
impairment charge, was GBP1.2 million (2021: GBP0.4 million).
Due to a windfall tax imposed by the Dutch Government, levied
retrospectively on Parkmead's 2022 gas production, the Group
suffered a non-current tax liability of GBP4.0m which relates to
the whole of the calendar year 2022. This tax is not payable until
May 2024. Whilst frustrating, we understand that this windfall tax
will aid the Netherlands population in accessing lower-cost,
low-carbon energy - an ultimate goal for Parkmead, and why we aim
to increase our domestic natural gas output in the region.
Parkmead continues to maintain a strong balance sheet with total
assets at 31 December 2022 of GBP70.3 million (2021: GBP80.5
million). There was a GBP12.7 million cash spend on decommissioning
activities in the six month period to 31 December 2022. After this
spend, cash and cash equivalents at 31 December 2022 were GBP19.2
million (2021: GBP24.1 million), equivalent to 17.6 pence per
share. Short term decommissioning provisions were GBP4.6 million
(2021: GBP13.5 million). Interest bearing loans receivable were
GBP2.9 million (2021: GBP2.9 million). Debt was strictly maintained
at the low level of just GBP0.9 million (2021: GBP0.5 million).
This debt was inherited as a result of the acquisition of Kempstone
Hill Wind Energy Limited.
Review of Activities
Onshore Netherlands
Our Netherlands production remains some of the most efficient
and profitable in Europe, on a per-barrel basis. Production across
the fields continues to decline at slower rates than expected.
Across the six months to 31 December 2022 gross production averaged
18.0 MMscfd, approximately 3,205 barrels of oil equivalent per day
("boepd").
In December, Parkmead announced the spudding of the 'LDS'
two-well drilling campaign in the Netherlands. The LDS wells were
drilled from the existing Diever well site, reducing cost and
expediting the tie-in process in a success case. We are pleased to
report that both wells were drilled safely, on time and under
budget. LDS-01 successfully encountered commercial gas columns in
the primary target horizons. The well was completed and has been
tied in, with first gas expected imminently. LDS-02 was
unfortunately unsuccessful in encountering commercial volumes of
gas however it has greatly helped the joint venture's understanding
of the regional geology for follow-on prospects. LDS-02 has
therefore been suspended and is currently being assessed for
potential re-entry and sidetrack to other nearby prospects.
The operating cost of the combined fields is very low at just
$8.6 per barrel of oil equivalent. These high-quality assets
underpin our Group's outstanding gross profit margin of 89% and
allows for the company to reinvest in further opportunities.
Onshore gas production is considered to play an important role in a
just transition, and we continue to progress further projects on
our licences, in line with government strategy.
Furthermore, excellent progress continues to be made on the
Papekop development. The permitting process is underway, with
commercial discussions progressing around transportation and
offtake. A potential development of the Papekop field would target
35.6 Bcf of gross gas reserves, with potential for upside through
oil production.
UK Oil and Gas
Greater Perth Area ("GPA")
During the period, Parkmead has completed phase one of a Net
Zero feasibility study with the Scott Area partners, and leading
engineering consultancy, Worley. We are pleased to report that the
tie back of the GPA through Scott provides several viable options
for reinjection of the associated Perth gas, post-processing on
Scott. This represents a significant step forward that aligns with
the NSTA strategy for reduced flaring and Net Zero developments.
The Scott platform lies just 10km southeast of the GPA project and
a tie-back would yield a number of mutually beneficial advantages
for both the Scott partnership and Parkmead. Significant efforts
continue into aligning suitable partners for the possible
development of GPA and the potential life extension of neighbouring
infrastructure through which GPA could be developed.
The GPA forms part of a portfolio of opportunities.
Transportation studies for our base case development concept were
previously completed. These have confirmed there are no technical
hurdles associated with the transportation and processing of fluids
from the Perth producing wells all the way through the offshore
infrastructure to the onshore facilities.
The GPA project has the potential to deliver 100 million barrels
recoverable on a P50 basis. Projects like GPA play an important
role in underpinning the security of energy supply that the UK
requires in its transition to net zero. As a fuel that is primarily
used for transportation, manufacturing and petrochemicals, oil will
continue to feature as a vital commodity in the UK over the coming
years. Therefore, it is very important that the UK continues to
develop such projects in order to reduce reliance on
less-regulated, more carbon-intensive imports. Parkmead believes
that production of hydrocarbons from GPA can be done in a
sustainable fashion in alignment with the UK government's most
recent targets on carbon emissions.
Skerryvore
During the period, Parkmead increased its stake in the
high-impact Skerryvore project from 30% to 50% and gained
regulatory approval to progress into the next phase of the licence.
Parkmead will continue as operator in this current phase, which is
testament to the efforts and capability of the project team.
Skerryvore will be Parkmead's first operated exploration well.
Parkmead's joint venture partners on the licence are Serica Energy
(UK) Limited (20%) and CalEnergy (Gas) Limited (30%).
The Company's detailed technical work programme has confirmed
the considerable multi-interval potential of Skerryvore. The
planned well will target the main stacked exploration prospects, at
Mey and Chalk intervals, which studies indicate could contain
significant volumes of light oil. The licence also contains
additional prospectivity at the Ekofisk and Jurassic levels. A
successful discovery will result in a tie back to nearby
infrastructure in line with the NSTA's MER and Hub Strategy for new
developments.
The area around Skerryvore is currently seeing important
activity on several fronts, with Harbour Energy now in the execute
phase of the adjacent Talbot development project, and NEO Energy
proceeding with the redevelopment of Affleck. Activity is also
ongoing on the Isabella discovery by TotalEnergies. Further
development activity is also taking place in the Norwegian sector
in close proximity to Skerryvore at Tommeliten A, a licence
operated by ConocoPhillips.
Fynn
Parkmead (50% and operator) continues to progress the technical
work on the two undeveloped discoveries at Fynn Beauly and Fynn
Andrew ("Fynn") situated in the Central North Sea, plus additional
prospectivity in the Piper formation.
Fynn Beauly is a very large heavy oil discovery with an
estimated in-place volume of up to 1,343 million barrels across
several blocks. Fynn Andrew, is wholly contained on the offered
blocks and holds 49.5 million barrels of oil-in-place on a P50
basis. Parkmead's partner on the offered blocks is Orcadian Energy
(50% working interest).
UKCS 33(rd) Offshore Oil and Gas Licensing Round
Despite industry concerns over the imposition of the Energy
Profits Levy, Parkmead remains committed to the UKCS oil and gas
industry. Parkmead has therefore made selective applications in the
UKCS 33(rd) Offshore Oil and Gas Licensing Round, the outcome of
which will be known later in 2023.
UK Renewable Energy Portfolio
The acquisition of producing renewable energy assets in February
2022 was a complementary addition to our organic renewable energy
projects at Pitreadie. Since the integration of Kempstone Hill, we
have achieved outstanding uptime of 98%, as well as benefiting from
a large increase in wholesale electricity export prices. This has
resulted in record revenue from the wind farm of GBP343,000 in the
six months to 31 December 2022.
Kempstone Hill is a 1.5MW onshore wind farm in Scotland which
benefits from an attractive inflation-linked, Feed-in Tariff
through to 2036. Electricity is sold through a power purchase
agreement which provides exposure to strong wholesale electricity
prices. We anticipate that a tendering process for a new PPA,
effective Q3 2023, will provide another year of strong revenues
from the asset.
At Pitreadie, commercial discussions continue to progress with
potential joint venture partners. Following positive results of
initial studies, further environmental surveys and planning work
are ongoing in support of a major wind farm planning
application.
Parkmead will continue to add to its renewable energy portfolio
through further acquisitions of producing assets as well as
progressing existing organic projects.
Decommissioning
As mentioned in our FY2022 results, Parkmead decided to progress
legacy decommissioning activities on the UKCS in order to
capitalise on lower supply chain costs, agreed before the
significant inflation in the offshore market. The Company is
pleased to report wells across P218 and P1293 have successfully
been decommissioned safely, on time and on budget. P&A
activities across the P1242 licence are ongoing and a number of
techniques have been successfully implemented, reducing time and
cost across this abandonment programme. The completion of this work
on the UKCS will leave Parkmead with no major abandonment
liabilities going forward.
Outlook
Parkmead has delivered significant results at operating level
from its diversified energy portfolio in the six-month period to 31
December 2022, and through the three months post period end. There
are obvious concerns in the upstream industry about the high and
increasing levels of taxation on primary energy production across
Europe, and how that may impact future investment. Despite this
higher taxation, Parkmead has the benefit of having built multiple
opportunities to create additional value, such as those across the
Netherlands, as well as the progression of our Skerryvore project
in the UK Central North Sea. This is in addition to actively
reviewing acquisition opportunities internationally, which would
complement our existing portfolio of assets. The Board is confident
that the Parkmead team is well positioned to drive the business
forward and to build upon the achievements already made to
date.
Tom Cross
Executive Chairman
31 March 2023
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. Tim Coxe, Parkmead Group's Managing Director, North Sea, who
holds a First-Class Master's Degree in Engineering and over 30
years of experience in the oil and gas industry, has overseen the
review and approval of the technical information contained in this
announcement. Tim is accountable for the company's HSE, Subsurface,
Drilling, Production Operations and Development Project functions.
Reserves and contingent resource estimates have been produced by
Parkmead's subsurface team and are stated as of 1 March 2023.
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.
A glossary of key terms can be found at
https://www.nstauthority.co.uk/site-tools/glossary-of-terms/
Condensed Consolidated statement of profit and loss and other
comprehensive income
for the six months ended 31 December 2022
Six months Six months Twelve months
to 31 December to 31 December to 30 June
2022 2021 2022
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
Continuous operations
Revenue 11,124 4,633 12,129
Cost of sales (1,331) (837) (1,370)
------------------------------------- ------ ---------------- ----------------- ---------------
Gross profit 9,793 3,796 10,759
Exploration and evaluation expenses 2 (153) (465) (1,116)
Impairment of goodwill - - (2,174)
Impairment of property, plant (12,733) - -
and equipment: development &
production
Gain / (loss) on sale of assets 10 - (31)
Administrative expenses 3 (2,049) (1,457) (2,231)
------------------------------------- ------ ---------------- ----------------- ---------------
Operating profit (5,132) 1,874 5,207
Finance income 81 37 73
Finance costs (113) (625) (1,317)
------------------------------------- ------ ---------------- ----------------- ---------------
(Loss) / profit before taxation (5,164) 1,286 3,963
Taxation (4,770) (1,697) (4,777)
Windfall taxation (4,044) - -
------------------------------------- ------ ----------------- ---------------
Loss for the period attributable
to the equity holders of the
Parent (13,978) (411) (814)
------------------------------------- ------ ---------------- ----------------- ---------------
Loss Per share (pence)
Basic 5 (12.79) (0.38) (0.75)
Diluted (12.79) (0.38) (0.75)
Condensed Consolidated statement of financial position
as at 31 December 2022
31 December 31 December 30 June 2022
2022 2021
Notes (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment:
development & production 4,370 14,613 15,843
Property, plant and equipment:
other 6,200 4,391 6,636
Goodwill 1,084 2,174 1,084
Exploration and evaluation assets 34,369 30,685 34,346
Interest bearing loans 4 - 2,900 2,900
Deferred tax assets 187 - 187
----------------------------------- ------
Total non-current assets 46,210 54,763 60,996
----------------------------------- ------ -------------------- -------------------- -------------------
Current assets
Trade and other receivables 1,973 1,597 2,018
Interest bearing loans 4 2,937 - -
Inventory 17 46 42
Cash and cash equivalents 19,179 24,128 23,263
----------------------------------- ------
Total current assets 24,106 25,771 25,323
----------------------------------- ------ -------------------- -------------------- -------------------
Total assets 70,316 80,534 86,319
----------------------------------- ------ -------------------- -------------------- -------------------
Current liabilities
Trade and other payables (10,666) (2,975) (3,545)
Decommissioning provisions (4,562) (13,498) (19,228)
Current tax liabilities (2,848) (1,219) (1,432)
----------------------------------- ------
Total current liabilities (18,076) (17,692) (24,205)
----------------------------------- ------ -------------------- -------------------- -------------------
Non-current liabilities
Other liabilities (1,242) (903) (1,181)
Loan (905) (500) (948)
Deferred tax liabilities (1,925) (1,339) (1,925)
Windfall taxes (4,044) - -
Decommissioning provisions (1,108) (2,739) (1,066)
----------------------------------- ------ -------------------- -------------------- -------------------
Total non-current liabilities (9,224) (5,481) (5,120)
----------------------------------- ------ -------------------- -------------------- -------------------
Total liabilities (27,300) (23,173) (29,325)
----------------------------------- ------ -------------------- -------------------- -------------------
Net assets 43,016 57,361 56,994
----------------------------------- ------ -------------------- -------------------- -------------------
Equity attributable to equity
holders
Called up share capital 19,688 19,688 19,688
Share premium 88,017 88,017 88,017
Merger reserve 3,376 3,376 3,376
Retained deficit (68,065) (53,720) (54,087)
----------------------------------- ------ -------------------- -------------------- -------------------
Total equity 43,016 57,361 56,994
----------------------------------- ------ -------------------- -------------------- -------------------
Condensed Consolidated statement of changes in equity
for the six months ended 31 December 2022
Share Share Merger Retained Total
capital premium reserve deficit
------------------------------ ------------- ------------- ------------- ------------- -------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ------------- ------------- ------------- ------------- -------------
At 30 June 2021 19,688 88,017 3,376 (53,360) 57,721
------------------------------ ------------- ------------- ------------- ------------- -------------
Loss for the period - - - (411) (411)
------------------------------ ------------- ------------- ------------- ------------- -------------
Total comprehensive loss for
the year - - - (411) (411)
------------------------------ ------------- ------------- ------------- ------------- -------------
Share-based payments - - - 51 51
------------------------------ ------------- ------------- ------------- ------------- -------------
At 31 December 2021 19,688 88,017 3,376 (53,720) 57,361
------------------------------ ------------- ------------- ------------- ------------- -------------
Loss for the period - - - (403) (403)
------------------------------ ------------- ------------- ------------- ------------- -------------
Total comprehensive loss for
the year - - - (403) (403)
------------------------------ ------------- ------------- ------------- ------------- -------------
Share-based payments - - - 36 36
------------------------------ ------------- ------------- ------------- ------------- -------------
At 30 June 2022 19,688 88,017 3,376 (54,087) 56,994
------------------------------ ------------- ------------- ------------- ------------- -------------
Loss for the period - - - (13,978) (13,978)
------------------------------ ------------- ------------- ------------- ------------- -------------
Total comprehensive loss for
the year - - - (13,978) (13,978)
------------------------------ ------------- ------------- ------------- ------------- -------------
At 31 December 2022 19,688 88,017 3,376 (68,065) 43,016
------------------------------ ------------- ------------- ------------- ------------- -------------
Condensed Consolidated statement of cashflows
for the six months ended 31 December 2022
Six months Six months Twelve months
to 31 December to 31 December to 30 June
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Cashflows from operating activities
Cashflows from operations 11,779 2,474 8,038
Taxation paid (3,203) (770) (3,508)
--------------------------------------------- ------------------- ------------------- -------------------
Net cash generated from operating
activities 8,576 1,704 4,530
--------------------------------------------- ------------------- ------------------- -------------------
Cash flow from investing activities
Interest received 81 37 73
Acquisition of exploration and evaluation
assets (253) (360) (548)
Proceeds from sale of property, plant
and equipment 163 - 874
Acquisition of property, plant and
equipment: development and production (275) (46) (123)
Acquisition of property, plant and
equipment: other - (1) (3,114)
Decommissioning expenditure (12,754) (233) (1,667)
Net cash on acquisition of Kempstone
Hill - - 360
--------------------------------------------- ------------------- ------------------- -------------------
Net cash used in investing activities (13,038) (603) (4,145)
--------------------------------------------- ------------------- ------------------- -------------------
Cash flow from financing activities
Lease payments (168) (162) (375)
Interest paid (31) (24) (45)
Repayment of loans and borrowings (43) - (542)
--------------------------------------------- ------------------- ------------------- -------------------
Net cash used in financing activities (242) (186) (962)
--------------------------------------------- ------------------- ------------------- -------------------
Net increase / (decrease) in cash
and cash equivalents (4,704) 915 (577)
Cash and cash equivalents at beginning
of period 23,263 23,378 23,378
Effect of foreign exchange rate differences 620 (165) 462
--------------------------------------------- ------------------- ------------------- -------------------
Cash and cash equivalents at end
of period 19,179 24,128 23,263
--------------------------------------------- ------------------- ------------------- -------------------
Notes to the Interim financial statements
1. Accounting policies
General Information
These condensed consolidated interim financial statements of The
Parkmead Group plc and its subsidiaries (the "Group") were approved
by the Board of Directors on 30 March 2023. The Parkmead Group plc
is the parent company of the Group. Its shares are quoted on AIM,
part of the London Stock Exchange. The registered office is located
at 20 Farringdon Street, 8th Floor, London, England, EC4A 4AB.
The condensed consolidated interim financial statements for the
period 1 July 2022 to 31 December 2022 are unaudited. In the
opinion of the Directors, the condensed consolidated interim
financial statements for the period presents fairly the financial
position, and results from operations and cash flows for the period
in conformity with the generally accepted accounting principles
consistently applied. The condensed consolidated interim financial
statements incorporate unaudited comparative figures for the
interim period 1 July 2021 to 31 December 2021 and the audited
financial year ended 30 June 2022.
The financial information set out in this interim report does
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Group's statutory accounts for the year
ended 30 June 2022 which were prepared under International
Financial Reporting Standards ("IFRS") as adopted for use in the UK
were filed with the Registrar of Companies. The auditors reported
on those accounts and their report was unqualified and 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.
Basis of preparation
The interim financial information in this report has been
prepared under the historical cost convention using accounting
policies consistent with International Financial Reporting
Standards (IFRS) as adopted by the UK 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 UK. The financial information has been prepared
on the basis of UK-adopted international accounting standards that
the Directors expect to be adopted and applicable as at 30 June
2022.
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 2022.
Going concern
The Directors have made an assessment of the Group's ability to
continue as a going concern. As at 31 December 2022 the Group had
GBP43.0 million of net assets of which GBP19.2 million is held in
cash, of which GBP4.7 million is held as restricted cash.
The Group's production in the Netherlands has been uninterrupted
by COVID-19 and the Group and Company employees have utilised
technology to work remotely where required. The Group's current
cash reserves are the principal source of funding and are expected
to more than exceed its estimated liabilities. Based on these
circumstances, the Directors have considered it appropriate to
adopt the going concern basis of accounting in preparing these
interim results.
2. Exploration and evaluation expenses
Exploration and evaluation expenses includes impairment charges
of GBP18,000 recorded in respect of exploration licences
relinquished in the period (Six months to 31 December 2021:
GBP318,000, Twelve months to 30 June 2022: GBP860,000).
3. Administrative expenses
Administrative expenses include an expense in respect of a
non-cash revaluation of share appreciation rights (SARs) totalling
GBP800,000 (Six months to 31 December 2021: GBP238,000 charge, 12
months to 30 June 2022: GBP418,000 charge). The SARs may be settled
by cash or shares and are therefore revalued with the movement in
share price.
Administrative expenses also includes a non-cash share based
payment charge of GBPNil due to options which have been granted,
lapsed or forfeited (Six months to 31 December 2021: GBP51,000, 12
months to 30 June 2022: GBP87,000 credit).
Administrative expenses also include a foreign exchange gain of
GBP620,000 (Six months to 31 December 2021: GBP165,000 expense, 12
months to 30 June 2022: GBP462,000 gain).
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. Interest charged by Parkmead during the period
amounted to GBP37,000 (Six months to 31 December 2021: GBP37,000,
Twelve months to 30 June 2022: GBP73,000).
On 26 July 2021, The Parkmead Group plc entered into a 24-month
extension of the loan.
5. Loss per share
Loss per share attributable to equity holders of the Company
arise as follows:
Six months Six months Twelve months
to 31 December to 31 December to 30 June
2022 2021 2022
(unaudited) (unaudited) (audited)
Loss per 1.5p ordinary share (pence)
Basic (12.79) (0.38) (0.75)
Diluted (12,79) (0.38) (0.75)
-------------------------------------- ---------------- ---------------- --------------
The calculations were based on the following information:
Six months Six months Twelve months
to 31 December to 31 December to 30 June
2022 2021 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Loss attributable to ordinary shareholders (13,978) (411) (814)
-------------------------------------------- ---------------- ---------------- --------------
Weighted average number of shares
in issue
Basic weighted average number of shares 109,266,931 109,266,931 109,266,931
-------------------------------------------- ---------------- ---------------- --------------
Dilutive potential ordinary shares
Share options 10,778,154 10,778,154 10,778,154
-------------------------------------------- ---------------- ---------------- --------------
Basic loss per share is calculated by dividing the 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 loss
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 net loss per share. When the Group makes a
loss the outstanding share options are anti-dilutive and so are not
included in dilutive potential ordinary shares.
6. Notes to the statement of cashflows
Reconciliation of operating (loss) / profit to net cash flow
from operations
Six months Six months Twelve months
to 31 December to 31 December to 30 June
2022 2021 2022
GBP'000 GBP'000 GBP'000
Operating (loss) / profit (5,132) 1,874 5,207
Depreciation 326 341 726
Amortisation and exploration write-off 18 318 860
(Gain) / loss on sale of property,
plant and equipment (10) - 31
Provision for share based payments - 51 87
Currency translation adjustments (620) 165 (462)
Impairment of Goodwill - - 2,174
Impairment of property, plant and 12,733 - -
equipment: development & production
Decreases / (increase) in receivables 45 (359) (667)
Decrease in stock 25 20 24
Increase in payables 4,394 64 58
---------------------------------------- ---------------- ---------------- --------------
Net cash flow from operations 11,779 2,474 8,038
---------------------------------------- ---------------- ---------------- --------------
7. Post balance sheet events
In January 2023 Parkmead E&P and joint venture partners
completed a six-well decommissioning campaign across the P1293
licence (former Athena wells). The final remaining subsea
infrastructure will be removed, and recycled where possible,
throughout Q2 2023.
Decommissioning activities on the P1242 licence (former Platypus
wells) commenced in March 2023.
The two-well LDS drilling campaign in the Netherlands was
completed safely, on time and under budget between November 2022
and February 2023. LDS-01 will be used as a gas-producing well and
has already been successfully tied in to surrounding
infrastructure. The LDS-02 well did not encounter a sufficient
hydrocarbon column and has been suspended for potential
re-entry.
A former subsidiary, Deo Petroleum Limited, has been restored to
the Register of Companies. This is in relation to ongoing work
across the Greater Perth Area licences.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU No. 596/2014) which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018. Upon the publication of
this announcement, this inside information is now considered to be
in the public domain.
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END
IR WPUBUWUPWGQU
(END) Dow Jones Newswires
March 31, 2023 02:00 ET (06:00 GMT)
The Parkmead (AQSE:PMG.GB)
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