TIDMPMG
RNS Number : 7982H
Parkmead Group (The) PLC
27 March 2020
27 March 2020
The Parkmead Group plc
("Parkmead", "the Company" or "the Group")
Interim Results for the six-month period ended 31 December
2019
Parkmead, the UK and Netherlands focused energy group, with four
business areas, is pleased to report its interim results for the
six-month period ended 31 December 2019.
HIGHLIGHTS
Strong financial position and robust producing assets, despite
current low gas price environment
-- Well capitalised, with cash balances of US$33.6 million (GBP25.9
million) as at 31 December 2019 (2018: GBP23.6 million), equivalent
to 23.9 pence per share
-- Total asset base increased by 11% to GBP88.8 million at 31 December
2019 (2018: GBP79.9 million)
-- Net assets increased to GBP70.1 million at 31 December 2019
(2018: GBP66.6 million)
-- In September 2019 the Company issued 9,645,669 new ordinary
shares as part of the renewable energy acquisition of Pitreadie
Farm Limited ("Pitreadie")
-- Parkmead maintains strict financial discipline with very low
operating costs
-- Revenue for the period was GBP2.1 million (2018: GBP5.3 million),
principally due to the considerable reduction in gas prices
-- Gross profit achieved of GBP0.8 million (2018: GBP3.8 million)
-- Gas prices have fallen from highs of approximately EUR25.7/MWh
in October 2018 to lows not seen in over a decade of around
EUR8.6/MWh in February 2020 due to the oversupply of Liquefied
Natural Gas (LNG) into the European market
-- Parkmead's Netherlands assets remain very low cost to operate
-- Netherlands gas production, plus benchmarking & economics consultancy,
provides positive operating cash flow to Parkmead of GBP0.9
million in the period
Strategic move into renewable energy opportunities; significant
wind farm potential
-- Studies are being conducted on the Group's acquired onshore
land for the potential development of a large wind farm
-- One of the large areas of land acquired by Parkmead lies adjacent
to the Mid Hill Wind Farm which encompasses 33 Siemens wind
turbines with a generating capacity of around 75MW
-- Other renewable opportunities exist within the acquired land
base
-- Renewable energy opportunities accessed through strategic acquisition
of Pitreadie, where a gain on purchase was recorded of GBP0.36
million
-- Parkmead's early commitment to building a balanced energy business
through its focus on gas, widely seen as the primary transition
fuel, pre-empted the recent energy transition debate
-- Member of Vision 2035 which aims to provide a roadmap to a lower
carbon energy mix
Increased activity across Netherlands portfolio; multiple new
opportunities identified
-- Exit gross production at the Group's Netherlands assets averaged
39.9 million cubic feet per day ( "MMscfd") for December 2019
, approximately 6,868 barrels of oil equivalent per day ("boepd")
-- The Brakel field was brought back to full production during
the period following the completion of a work programme
-- Gross Brakel production reached 3.0 MMscfd , approximately 516
boepd, during the period
-- Concept selection planning at the Papekop oil and gas discovery
has begun, a proven field with 24.2 million barrels ("MMBbl")
of oil-in-place and 39.4 billion cubic feet ("Bcf") of gas-in-place
-- Further production enhancement work planned on Parkmead's Netherlands
portfolio, including compression optimisation work at Grolloo
during 2020 to maximise production, plus development planning
at the Ottoland oil and gas discovery
-- Multiple exploration opportunities exist around Diever West,
such as the Boergrup and De Bree prospects, both of which contain
stacked targets with similar characteristics to Diever West
-- A new seismic reprocessing project began in Q4 2019, which will
help define and high-grade the extensive prospectivity around
Diever West
-- Dynamic reservoir modelling suggests Diever West held initial
gas-in-place of approximately 108 Bcf, more than double the
post-drill static volume estimate of 41 Bcf
Significant progress on Skerryvore, GPA and Platypus oil and gas
projects
-- New seismic purchased in Q3 2019 covering the Skerryvore prospect
and surrounding area, which is being reprocessed throughout
2020 to mature the collection of prospects
-- Skerryvore's main prospects are three stacked targets, at Mey
and Chalk level, which together could contain 157 million barrels
of oil equivalent ("MMBoe")
-- Parkmead is in commercial discussions with the Scott field partnership,
including CNOOC, in order to potentially agree terms for a tie-back
of the Greater Perth Area ("GPA") to the Scott facilities
-- Parkmead is also holding discussions with a number of leading,
internationally-renowned service companies in relation to the
GPA project
-- Field Development Plan draft and Environmental Statement submitted
to the OGA and OPRED, respectively, for the development of the
Platypus gas project in the UK Southern North Sea
-- Selected development concept is a subsea tie-back to the Cleeton
platform and commercial discussions are ongoing
Substantial oil and gas reserves and resources
-- 2P reserves of 45.7 MMBoe as at 1 March 2020 (46.0 MMBoe as
at 1 March 2019)
Well positioned for further acquisitions and opportunities
-- Eight 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 2019 across the Group, despite our revenues
being impacted by the low gas price environment. Parkmead has
delivered growth in its asset base whilst retaining financial
strength. This creates a very good foundation from which to build
and gives us confidence that we will remain robust in the context
of broader global uncertainty brought about by the COVID-19
pandemic.
Through a strategic acquisition, we are evaluating a number of
renewable energy opportunities. Renewable energy is directly in
line with Parkmead's business plan, broadening and enhancing the
Group's energy asset base.
Potential has been identified for a large wind farm project on
the Group's newly acquired land.
We are also pleased with the advances made within the Greater
Perth Area project. The Group is in discussions with a number of
leading, international service companies and oil companies in
relation to driving forward the GPA project.
The team at Parkmead continues to work intensively to evaluate
and execute further value-adding opportunities which could provide
additional upside for the Group.
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
Victoria Hodge
Tim Dainton
Instinctif Partners Limited (PR Adviser +44 (0) 20 7457 2020
to Parkmead)
Mark Garraway
Sarah Hourahane
Dinara Shikhametova
Review of Activities
Parkmead has delivered significant growth in its asset base
across the UK and the Netherlands, continuing to build a
high-quality portfolio.
In August 2019, Parkmead announced that it had signed a Share
Purchase Agreement to acquire the entire issued share capital of
Pitreadie, a company owning extensive land in Scotland with
interesting and varied renewable energy potential. The completion
of the acquisition was announced in September 2019.
As part of a broader strategic shift, the acquisition provides
Parkmead with its first renewable energy opportunities, with
potential already identified for the installation of a large wind
farm project.
The acquisition also broadens Parkmead's operations and will add
a third revenue-generating business area to the Group.
One of the large areas of land acquired spans 1,238 acres and is
located some 15 miles west of Aberdeen. Excellent average wind
speeds exist on the site of between 7-10 m/s. This site lies
adjacent to the Mid Hill Wind Farm which contains 33 Siemens wind
turbines with a generating capacity of around 75MW. Woodland
planting has already been undertaken on part of this large site,
which has the potential for a commercial biomass supply operation.
Parkmead will be conducting a detailed analysis for optimising the
land use of the various sites within the Pitreadie portfolio
throughout 2020.
The consideration for the acquisition was satisfied by the issue
of 9,645,669 new ordinary Parkmead shares. As part of the
Acquisition, Parkmead assumed GBP3.6 million of Bank of Scotland
debt held by Pitreadie. The land and property assets acquired,
assuming no upside from renewable opportunities, were valued at
GBP7.59 million by CKD Galbraith LLP, a leading independent
property consultancy.
The renewables sector is a natural expansion of Parkmead's
energy operations and is fully in line with the Group's strategy to
re-balance Parkmead's energy portfolio. Parkmead recognises the
transition that is taking place in the energy market, supported by
legislation, from fuels with a higher carbon content to lower
carbon alternatives such as natural gas and renewables. Natural gas
and renewables play increasingly key roles in the generation of
electricity.
Gas is widely seen as the primary transition fuel as the UK
targets a net zero carbon position by 2050. Parkmead identified gas
as a major growth market in 2011 and acquired its Netherlands gas
portfolio a year later. The acquisition has been a tremendous
success for Parkmead and the Group has increased its production
almost tenfold since 2014.
Parkmead remains of the strong belief that oil and gas will have
a very important role to play in the energy mix in future years.
This is evidenced by a range of forecasts showing robust and
increased demand for oil and gas going forward.
Parkmead's early commitment to building a balanced energy
business has pre-empted much of the recent debate on energy
transition, positioning the Company well in this new investment
arena.
Parkmead has an exceptional team of scientific and commercial
experts, who have a track record of good decision making and
successful delivery of projects over many years. Within our team of
economists, engineers and geoscientists there is a deep reservoir
of energy knowledge that we believe can be applied to the
fast-growing renewables sector.
Development studies work is progressing on Parkmead's GPA
project, which has the potential to deliver 75-130 MMBoe on a P50
basis. The Company is in 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. Scott lies just
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.
New seismic was purchased covering Parkmead's Skerryvore
prospect and surrounding area in Q3 2019. This new data will be
reprocessed and interpreted during 2020 in order to mature the
growing collection of prospects across this licence. The Skerryvore
Mey prospect overlies two stacked Chalk prospects (Skerryvore
Ekofisk and Skerryvore Tor) which are associated with 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.
In October 2019, Parkmead announced that a Field Development
Plan draft and Environmental Statement for the Platypus gas project
were submitted to the OGA and OPRED, respectively. These two
documents were submitted on behalf of the co-venturers by Dana
Petroleum, a subsidiary of the Korean National Oil Corporation
(KNOC). Parkmead's co-venturers in the Platypus project are
CalEnergy Gas (15%), Zennor Petroleum (11%) and Dana Petroleum
(59%). Parkmead's equity in the project is 15%.
The Platypus field is located in the UK Southern North Sea in
Blocks 47/5b and 48/1a, approximately 18 km north west of the West
Sole gas field and 15 km south west of the Babbage field. The
Platypus gas field was discovered in 2010 and was successfully
appraised with a horizontal well in 2012 which was flow tested at a
rate of 27 million cubic feet of gas per day (approximately 4,600
barrels of oil per day on an equivalent basis).
As a result of the successful appraisal well, the field
development studies have been progressed leading to confirmation of
concept selection and submission of the Field Development Plan
draft and Environmental Statement. These are subject to the
standard regulatory review and approvals.
The selected development concept will consist of two wells
connected to a subsea manifold, with gas export to the Cleeton
platform via a 23km pipeline. Produced fluids will arrive at the
Cleeton facilities before being routed directly to the Dimlington
Terminal for separation and processing.
Increased activity across the Netherlands asset base
Exit gross production at the Group's Netherlands assets averaged
39.9 MMscfd for December 2019, approximately 6,868 boepd. A planned
two week maintenance programme was carried out at the Garijp
treatment centre in September 2019, taking Diever West offline
during this short time period.
The Brakel field was brought back to full production during the
period following the completion of a work programme. Gross
production at Brakel reached 3.0 MMscfd, approximately 516 boepd,
during the period.
The Diever West field has performed above expectations since
first production. Dynamic reservoir modelling suggests that the
field holds approximately 108 Bcf gross gas-in-place, this is more
than double the earlier, post-drill static volume estimate of 41
Bcf.
A number of further exploration opportunities exist within the
Drenthe VI concession, which contains the Diever West field. Two of
these are the Boergrup and De Bree prospects, both of which have
stacked independent targets in the Vlieland and Rotliegendes
(Boergrup) and Rotliegendes and Carboniferous (De Bree). A new
seismic reprocessing project commenced in Q4 2019, which will help
define and high-grade the extensive prospectivity around Diever
West.
Parkmead's Netherlands portfolio includes producing gas fields
with a very low operating cost. Despite the current low gas price
environment, this provides important cash flow to the Group via
profitable gas production.
Detailed work has begun on the Ottoland oil and gas discovery,
located on the same Andel Va block as the Brakel gas field. Seismic
interpretation and depth migration studies have been completed,
followed by the construction of a dynamic simulation model used to
analyse well locations and scenarios. Further modelling work will
be undertaken ahead of development concept selection.
New structural and static modelling has been completed at the
Papekop oil and gas discovery, refining the volume estimates.
Concept selection planning has begun at Papekop and compression
optimisation work will be carried out at the Group's Grolloo field
during 2020.
Results
During the six-month period to 31 December 2019, the Group
generated revenues of GBP2.1 million (2018: GBP5.3 million). This
reduction is mainly a result of the considerable fall in gas
prices. Gas prices have fallen from highs of approximately
EUR25.7/MWh in October 2018 to lows not seen in over a decade of
around EUR8.6/MWh in February 2020 due to the oversupply of
Liquefied Natural Gas (LNG) into the European market. Gross profit
for the period was GBP0.8 million (2018: GBP3.8 million). Detailed
technical work undertaken across the wider Parkmead portfolio has
allowed the Group to release non-core acreage, such as licence
P.2218, considerably reducing licence costs. The release of this
acreage led to a non-cash impairment charge of GBP1.3 million which
contributed to the net loss of GBP1.7 million for the period (2018:
GBP2.2 million profit).
Parkmead's Netherlands portfolio remains very low cost to
operate, demonstrating the robust nature of these high-quality
assets.
Administrative expenses/credits amounted to a GBP0.8 million
expense (2018: GBP0.3 million credit). 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 2019 stood at GBP88.8
million (2018: GBP79.9 million). Parkmead is very carefully managed
and retains an excellent financial positon. Cash and cash
equivalents at year end were GBP25.9 million (2018: GBP23.6
million). Interest bearing loan assets were GBP2.9 million (2018:
GBP3.0 million). GBP3.6 million of debt was held during the period
(2018: GBPnil), assumed through the purchase of Pitreadie. The
Group's net asset value was GBP70.1 million (2018: GBP66.6
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.
Development of the Senior Management Team
As Parkmead grows, the board continuously plans for the
developing needs of the Group. The last 12 months have seen
significant progress across our key projects in oil and gas, plus a
strategic move into renewable energy opportunities. Therefore, the
board has recruited a number of experienced new staff to ensure
Parkmead can deliver the maximum value from its enhanced,
high-quality asset base.
The Company has made a carefully integrated series of
appointments to firstly increase the team's capabilities, and
secondly to prepare for planned retirements. This has included
appointing a new Managing Director for the North Sea, a new Group
Financial Controller and a new Managing Director for Aupec Ltd.
Given the continual renewal of expertise and independent thinking
outlined above, Parkmead is well positioned for future growth with
a strong and balanced portfolio of assets and an experienced team
focused on delivery.
Outlook
Parkmead has delivered significant growth in its asset base in
the six-month period to 31 December 2019, whilst maintaining the
Group's healthy financial position. The acquisition of Pitreadie
expands the Group's asset base and provides Parkmead access to
renewable energy opportunities.
Despite the current low oil and gas price environment, 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.
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 2020, Parkmead maintains its appetite
for acquisitions and is looking carefully at a number of
opportunities. The Board of Directors is confident that Parkmead is
well positioned to drive the business forward and to build upon the
achievements already made to date.
COVID-19
The health and safety of the Company's employees and
stakeholders is a priority, and the Company is ensuring that
best-practice procedures are followed. Parkmead continues to
monitor the ongoing COVID-19 pandemic and we do not currently
anticipate material disruptions to our production in the
Netherlands. Given the Group's healthy financial position and
strong asset base, the Board believes Parkmead is well-placed to
withstand the challenges brought about by COVID-19.
Tom Cross
Executive Chairman
27 March 2020
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 20
years of experience in the oil and gas industry, has overseen the
review and approval of the technical information contained in this
announcement. Reserves and contingent resource estimates are stated
as at 1 March 2020. 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 2019
Six months Six months Twelve
to 31 December to 31 December months
2019 2018 to 30
June 2019
Notes (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Revenue 2,111 5,274 8,269
Cost of sales (1,308) (1,432) (2,524)
Gross profit 803 3,842 5,745
Exploration and evaluation expenses 2 (1,475) (162) (171)
Administrative (expenses)/credit 3 (836) 304 (436)
--------------------------------------------- ------ ------------------- ---------------- ---------------
Operating (loss) / profit (1,508) 3,984 5,138
Gain on bargain purchase 8 362 - -
Finance income 95 76 209
Finance costs (362) (269) (546)
(Loss) / profit before taxation (1,413) 3,791 4,801
Taxation (303) (1,586) (2,385)
--------------------------------------------- ------ ------------------- ---------------- ---------------
(Loss) / profit for the period attributable
to the equity holders of the Parent (1,716) 2,205 2,416
--------------------------------------------- ------ ------------------- ---------------- ---------------
(Loss) / earnings per share (pence)
Basic 6 (1.65) 2.23 2.44
Diluted (1.65) 2.04 2.43
Group statement of profit or loss and other comprehensive income
for the six months ended 31 December 2019
Six months Six months Twelve
to 31 to 31 months
December December to 30
2019 2018 June
2019
Notes (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
(Loss) / profit for the period (1,716) 2,205 2,416
-------------------------------------------------- ------ ------------------ --------------- -----------
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 - - 651
-------------------------------------------------- ------
- - 651
Income tax relating to components of other - - -
comprehensive income
------------------ --------------- -----------
Other comprehensive income for the period,
net of tax - 145 651
Total comprehensive (loss) / profit for
the period attributable to the equity holders
of the Parent (1,716) 2,350 3,067
-------------------------------------------------- ------ ------------------ --------------- -----------
Group statement of financial position
as at 31 December 2019
At 31 December At 31 At 30
2019 December June
2018 2019
Notes (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment: development
& production 11,589 12,442 11,657
Property, plant and equipment: other 9,491 154 165
Intangible assets 42 - -
Goodwill 2,174 2,174 2,174
Exploration and evaluation assets 34,918 31,381 34,052
Financial assets 5 - 5,715 -
Interest bearing loans 2,937 2,967 -
Deferred tax assets 3 3 3
Total non-current assets 61,154 54,836 48,051
--------------------------------------- ------ ------------------ --------------- -------------
Current assets
Trade and other receivables 1,419 1,466 658
Interest bearing loans - - 2,900
Stock 320 - -
Cash and cash equivalents 25,880 23,552 30,666
Total current assets 27,619 25,018 34,224
--------------------------------------- ------ ------------------ --------------- -------------
Total assets 88,773 79,854 82,275
--------------------------------------- ------ ------------------ --------------- -------------
Current liabilities
Trade and other payables (4,988) (4,774) (4,560)
Current tax liabilities - (576) (1,563)
Total current liabilities (4,988) (5,350) (6,123)
--------------------------------------- ------ ------------------ --------------- -------------
Non-current liabilities
Other liabilities and accrued income (645) (32) (5)
Lease liabilities (1,192) - -
Bank loan (3,600) - -
Deferred tax liabilities (1,404) (1,284) (1,284)
Decommissioning provisions (6,873) (6,598) (6,607)
--------------------------------------- ------ ------------------ --------------- -------------
Total non-current liabilities (13,714) (7,914) (7,896)
--------------------------------------- ------ ------------------ --------------- -------------
Total liabilities (18,702) (13,264) (14,019)
--------------------------------------- ------ ------------------ --------------- -------------
Net assets 70,071 66,590 68,256
--------------------------------------- ------ ------------------ --------------- -------------
Equity attributable to equity holders
Called up share capital 19,678 19,533 19,533
Share premium 91,181 87,805 87,805
Revaluation reserve - (310) -
Retained deficit (40,788) (40,438) (39,082)
--------------------------------------- ------ --------------- -------------
Total equity 70,071 66,590 68,256
--------------------------------------- ------ ------------------ --------------- -------------
Group statement of changes in equity
for the six months ended 31 December 2019
Share capital Share premium Revaluation reserve Retained deficit Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 July 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
---------------------- -------------- -------------- -------------------- ------------------- -------------------
Profit for the period - - - 211 211
Fair value gain on - - - - -
financial assets
---------------------- -------------- -------------- -------------------- -------------------
Total comprehensive
loss for the period - - - 211 211
Transfer revaluation
reserve on disposal
of financial assets
at fair value
through other
comprehensive
income - - 310 (310) -
Gains arising on
repayment of
employee share based
loans - - - 941 941
Share-based payments - - - 8 8
---------------------- -------------- -------------- -------------------- ------------------- -------------------
At 30 June 2019 19,533 87,805 - (39,082) 68,256
---------------------- -------------- -------------- -------------------- ------------------- -------------------
Loss for the period - - - (1,716) (1,716)
Total comprehensive
income for the
period - - - (1,716) (1,716)
Issue of share
capital 145 3,376 - - 3,521
Share-based payments - - - 10 10
---------------------- -------------- -------------- -------------------- ------------------- -------------------
At 31 December 2019 19,678 91,181 - (40,788) 70,071
---------------------- -------------- -------------- -------------------- ------------------- -------------------
Group statement of cashflows
for the six months ended 31 December 2019
Six months Six months Twelve
to 31 to 31 December months
December 2018 to 30
2019 June
2019
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
Cashflows from operating activities
Cashflows from operations 7 921 3,164 4,733
Taxation paid (2,592) (1,949) (1,779)
----------------------------------------- ------ ------------------ -------------
Net cash (used in) / generated from
operating
activities (1,671) 1,215 2,954
----------------------------------------- ------ ------------------ ------------------ -------------
Cash flow from investing activities
Interest received 37 40 239
Acquisition of exploration and
evaluation
assets (2,154) (1,633) (3,744)
Proceeds from sale of financial assets
at fair value through other
comprehensive income - - 6,351
Acquisition of property, plant and
equipment:
development and production (39) - (63)
Disposal of property, plant and
equipment:
development and
production - - 211
Acquisition of property, plant and
equipment:
other (393) (144) (190)
Other liabilities
Proceeds from financial assets - 130 -
Net cash from Pitreadie 24 - -
Loans issued - - -
Net cash (used in) / generated by
investing
activities (2,525) (1,607) 2,804
----------------------------------------- ------ ------------------ ------------------ -------------
Cash flow from financing activities
Issue of ordinary shares - - -
Interest paid (20) (22) (45)
Proceeds from loans and borrowings - - 941
Net cash (used in) / generated by
financing
activities (20) (22) 896
----------------------------------------- ------ ------------------ ------------------ -------------
Net (decrease) / increase in cash and
cash equivalents (4,216) (414) 6,654
----------------------------------------- ------ ------------------ ------------------ -------------
Cash and cash equivalents at beginning
of period 30,666 23,804 23,804
Effect of foreign exchange rate
differences (570) 162 208
----------------------------------------- ------ ------------------ ------------------ -------------
Cash and cash equivalents at end of
period 25,880 23,552 30,666
----------------------------------------- ------ ------------------ ------------------ -------------
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 2020.
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 2019, with the exception of IFRS 16 "leases" which is
the new standard applicable and mandatory for the year ending 30
June 2020. The new standard does not have a material impact on the
financial statements on a net basis. However, the standard does
increase the assets and liabilities of the group through the
recognition of right of use assets and corresponding lease
liabilities. No new material accounting standards have been adopted
due to the acquisition of Pitreadie Farm Limited, which occurred in
the period.
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 2019 has
been extracted from the audited statutory accounts. The statutory
accounts for the year ended 30 June 2019 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
2019 and 31 December 2018 is unaudited.
2 Exploration and evaluation expenses
Exploration and evaluation expenses includes impairment charges
of GBP1,287,000 recorded in respect of exploration licences
relinquished in the period (Six months to 31 December 2018: GBPnil,
Twelve months to 30 June 2019: GBPnil).
3 Administrative (expenses)/credit
Administrative (expenses)/credit include a credit in respect of
a non-cash revaluation of share appreciation rights (SARs)
totalling GBP349,000 (Six months to 31 December 2018: GBP704,000
credit, Twelve months to 30 June 2019: GBP1,079,000 credit). 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 2019
and 31 December 2019.
Administrative (expenses)/credit also includes a foreign
exchange expense of GBP560,000 (Six months to 31 December 2018:
GBP177,000 credit, Twelve months to 30 June 2019: GBP181,000
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. Interest charged during the period amounted to
GBP37,000 (Six months to 31 December 2018: GBP37,000, Twelve months
to 30 June 2019: GBP73,000).
On 27 July 2019, The Parkmead Group plc entered into a 24-month
extension of the interest-bearing loan to Energy Management
Associates Limited.
5 Financial assets
In January 2019, 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 (Loss) / earnings 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
2019 2018 2019
(unaudited) (unaudited)
(Loss) / earnings per 1.5p ordinary
share (pence)
Basic (1.65) 2.23 2.44
Diluted (1.65) 2.04 2.43
--------------------------------------- ---------------- ---------------- ------------
The calculations were based on the following information:
Twelve
Six months Six months months
to 31 December to 31 December to 30 June
2019 2018 2019
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
(Loss) / earnings attributable
to ordinary shareholders (1,716) 2,205 2,416
Weighted average number of shares
in issue
Basic weighted average number of
shares 104,014,105 98,929,160 98,929,160
------------------------------------ ---------------- ---------------- ------------
Dilutive potential ordinary shares
Share options 9,314,068 9,314,068 9,314,068
------------------------------------ ---------------- ---------------- ------------
Basic (loss) / earnings 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 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.
7 Notes to the statement of cashflows
Reconciliation of operating (loss) / profit to net cash flow
from operations
Six months Six months Twelve
to 31 to 31 months
December December to 30
2019 2018 June
2019
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Operating (loss) / profit (1,508) 3,984 5,138
Depreciation 240 173 217
Amortisation and exploration write-off 1,475 - -
Disposal of development and production assets - - 22
Provision for share based payments - 16 24
Currency translation adjustments 570 (162) (208)
Increase in receivables (237) (171) 636
Decrease in stock 41 - -
Increase/(decrease) in payables 340 (676) (1,096)
Net cash flow from operations 921 3,164 4,733
------------------------------------------------ ----------------- ------------------ --------------
8 Business Combination
On 26 September 2019, the Group completed the acquisition of
100% of the share capital of Pitreadie Farm Limited ("Pitreadie")
to purchase a company with extensive farmland and sites in Scotland
with significant renewable energy potential. This acquisition
constituted a related party transaction pursuant to Rule 13 of the
AIM Rules for Companies. The valuations presented below are based
on current available information. If new information becomes
available within the next 12 months from 26 September 2019, the
Group may change the fair values in the purchase price allocation
in accordance with IFRS 3. The provisional fair values of the
identifiable assets and liabilities of Pitreadie at the acquisition
date are shown below:
GBP 000
-------------------------------------- -------------------------
Non current assets
Intangible assets 52
Property, plant and equipment: other 8,101
Current assets
Stock 361
Debtors 103
Prepayments and accrued income 10
Cash 24
Current creditors
Trade creditors (37)
Other creditors and accruals (68)
Lease liabilities (289)
Non current liabilities
Bank loan (3,600)
Accruals and deferred income (654)
Deferred tax liability (120)
Net assets 3,883
Non cash consideration (3,521)
-------------------------------------- -------------------------
Gain on bargain purchase (362)
-------------------------------------- -------------------------
The land and buildings, being acquired, assuming no upside from
renewable opportunities, were valued at GBP7.59 million by CKD
Galbraith LLP, a leading independent property consultancy. Based on
this valuation the group has made a bargain purchase gain of
GBP362,000.
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 EAADKALXEEAA
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