TIDMPMG
RNS Number : 0373U
Parkmead Group (The) PLC
31 March 2021
31 March 2021
The Parkmead Group plc
("Parkmead", "the Company" or "the Group")
Interim Results for the six-month period ended 31 December
2020
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
2020.
HIGHLIGHTS
Excellent progress on Platypus gas and Greater Perth Area oil
projects
-- Parkmead has agreed in principle to become operator of the
Platypus gas project, subject to regulatory approval. It has
entered into advanced commercial discussions with the Platypus
supply chain, as well as progressing discussions with the OGA and
also Perenco UK, in their role as operator of the Cleeton host
facility
-- CalEnergy Resources is Parkmead's partner on the project
-- Platypus has previously reached some key milestones ahead of
its development, including submission of a draft Field Development
Plan and Environmental Statement, which are in the process of being
updated
-- The mid case recoverable gas reserves from Platypus are
expected to be 103 billion cubic feet ("Bcf"), with peak gas
production of over 60 million cubic feet of gas per day
("MMscfd")
-- There is potential for additional gas volumes from the
adjacent Platypus East structure. These could be tied into the
planned Platypus infrastructure
-- Parkmead continues to assess draft commercial offers received
from the Scott field partnership for the potential tie-back of the
Greater Perth Area ("GPA")
-- Infrastructure studies completed in 2020 have confirmed that
there are no technical hurdles to produce Perth oil from the wells
all the way through to the onshore facilities
-- Parkmead is also in discussions with other operators in the
GPA vicinity where new opportunities have arisen during the
year
-- Every $10/bbl increase in the oil price adds approximately
GBP130 million to the P50 post-tax NPV of the Perth field
development alone
Major new UK licence secured and significant progress on large
Skerryvore project
-- Seismic reprocessing work covering the Skerryvore prospect
and surrounding area is nearing completion
-- This will further mature the collection of prospects
-- Rock physics and inversion studies at Skerryvore will shortly
commence after current tendering process
-- 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 has accepted the award of Licence P.2516 (Parkmead
50% and operator) containing two undeveloped oil discoveries, Fynn
Beauly and Fynn Andrew, as well as an oil prospect in the Piper
Formation
-- The licence covers Blocks 14/20g & 15/16g situated in the
Central North Sea and is adjacent to Parkmead's extensive GPA
project
-- Fynn Beauly is a very large oil discovery which extends across a number of blocks
-- The entire discovery is estimated to contain oil-in-place of
between 602 and 1,343 million barrels, with Licence P.2516
containing a section of the discovery to the south holding
oil-in-place of between 77 and 202 million barrels
-- Fynn Andrew is wholly contained on the licence and holds 50
million barrels of oil-in-place on a P50 basis
-- The addition of these blocks to Parkmead's portfolio adds
34.4 million barrels of 2C resources to the Group
Strong financial position and robust producing assets, despite
very low gas price environment
-- Gross profit achieved of GBP0.8 million (2019: GBP0.8
million) despite the historic low gas prices seen in the period,
demonstrating the high-quality nature of Parkmead's onshore
Netherlands assets
-- Gross profit margin increased to 50% (2019: 38%)
-- Well capitalised, with cash balances of US$33.6 million
(GBP24.5 million) as at 31 December 2020, equivalent to 22.4 pence
per share
-- Substantial total assets of GBP86.8 million at 31 December 2020 (2019: GBP88.8 million)
-- Net assets remained strong at GBP68.9 million at 31 December 2020 (2019: GBP70.1 million)
-- Parkmead maintains strict financial discipline with very low operating costs
-- Revenue for the period was GBP1.5 million (2019: GBP2.1 million)
-- Gas prices fell to historic lows during the period as a
result of the market conditions resulting from the COVID-19
pandemic, falling to under EUR5/MWh
-- Prices have recovered very strongly since and have increased
to between approximately EUR16/MWh and EUR18/MWh during Q1 2021
-- Parkmead's Netherlands assets remain very low cost to
operate, with an average field operating cost of just US$9.9 per
barrel of oil equivalent
Divestment of non-core acreage and acceleration of renewable
energy project
-- Two successful sales of two separate areas of non-core land
from UK renewable energy portfolio achieved an aggregate
consideration of GBP4.0 million (with the second sale of GBP3.3
million being completed post period end)
-- Sites with the largest renewable energy potential have been retained and high-graded
-- Technical studies are already underway on a specific location
within the Group's onshore land portfolio for the potential
development of a large wind farm
-- This area of land lies adjacent to the Mid Hill Wind Farm
which encompasses 33 Siemens wind turbines with a generating
capacity of around 75 megawatts
-- Other renewable opportunities exist across the Group's asset portfolio
-- 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 OGUK's Vision 2035 which aims to provide a roadmap to a lower carbon energy mix
Robust, high-quality Netherlands portfolio; multiple new
opportunities identified
-- Average gross production for the period across the Group's
Netherlands assets was 32.8 MMscfd , approximately 5,648 barrels of
oil equivalent per day ("boepd")
-- Multiple exploration opportunities exist around the Diever
field, such as the Boergrup and De Bree prospects, both of which
contain stacked targets with similar characteristics to Diever
-- A new seismic reprocessing project is being carried out which
will help define and high-grade the extensive prospectivity around
Diever
-- Dynamic reservoir modelling suggests Diever held initial
gas-in-place of approximately 108 Bcf, more than double the
post-drill static volume estimate of 41 Bcf
-- Diever is the 8th highest producing field in the Netherlands
to the end of 2020, according to official data
-- Concept selection planning at the Papekop oil and gas
discovery is continuing, a proven field with 24.2 million barrels
of oil-in-place and 39.4 Bcf of gas-in-place
Substantial oil and gas reserves and resources
-- 2P reserves of 45.7 MMBoe as at 1 March 2021 (45.7 MMBoe as at 1 March 2020)
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 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 excellent progress in the six-month
period to 31 December 2020 across the Group, despite our revenues
being impacted by the low gas price environment. Parkmead has made
significant advances within its asset portfolio, whilst retaining
financial strength. This creates a very good foundation from which
to build as the energy sector continues to recover from the
COVID-19 pandemic.
Parkmead is already taking advantage of the strong position we
have achieved, accelerating a number of growth steps since the
period end.
We are delighted to be moving ahead, in principle, as operator
of the Platypus gas development. This has the potential to add
significant value to Parkmead.
Our team 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 to secure opportunities
that maximise future value for our shareholders."
Enquiries:
The Parkmead Group plc +44 (0) 1224 622200
Tom Cross (Executive Chairman)
Ryan Stroulger (Chief Financial Officer)
finnCap Ltd (NOMAD and Broker to Parkmead) +44 (0) 20 7220 0500
Marc Milmo / Emily Watts / Matthew Radley
- Corporate Finance
Andrew Burdis / Barney Hayward - ECM
Review of Activities
Parkmead has delivered significant growth in its high-quality
asset portfolio across the UK and the Netherlands.
UK Oil and Gas Projects
Platypus Gas Field
Parkmead has agreed in principle to become operator of the
Platypus gas project and has entered into advanced commercial
discussions with the Platypus supply chain. CalEnergy Resources is
Parkmead's partner on the project.
The change of operatorship will be subject to the standard
regulatory approvals.
Platypus has previously reached some key milestones ahead of its
development, including submission of a draft Field Development Plan
and Environmental Statement, which are in the process of being
updated. The mid case recoverable reserves from Platypus are
expected to be 103 Bcf, with peak gas production of over 60
MMscfd.
Platypus East (previously named Possum) provides a material
upside opportunity for the project, potentially adding another 50
Bcf of recoverable gas reserves.
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 gas field. The
Platypus field was discovered in 2010 and was successfully
appraised with a horizontal well in 2012 which was flow tested at a
rate of 27 MMscfd (approximately 4,600 barrels of oil per day on an
equivalent basis).
32(nd) Round
In March 2021, Parkmead accepted the award of Licence P.2516
(Parkmead 50% and operator) as part of the most recent UK 32nd
licensing round awards.
The licence covers Blocks 14/20g & 15/16g (Parkmead 50% and
operator) situated in the Central North Sea, adjacent to Parkmead's
extensive GPA project. These blocks contain two undeveloped oil
discoveries, Fynn Beauly and Fynn Andrew, as well as an oil
prospect in the Piper Formation.
Fynn Beauly is a very large heavy oil discovery which extends
across a number of blocks. The entire discovery is estimated to
contain oil-in-place of between 602 and 1343 million barrels.
Blocks 14/20g & 15/16g contain a section of the discovery to
the south, with oil-in-place of between 77 and 202 million barrels.
The second discovery, Fynn Andrew, is wholly contained on the
offered blocks and holds 50 million barrels of oil-in-place on a
P50 basis.
The addition of these blocks to Parkmead's portfolio adds 34.4
million barrels of 2C resources to the Group.
Greater Perth Area ("GPA")
The Greater Perth Area development continues to form a key part
of our balanced portfolio of assets. This year has seen the
completion of transportation studies for our base case development
concept. The studies 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 infrastructure to
the onshore facilities. Parkmead continues to engage with leading,
internationally-renowned supply chain companies in order to
optimise the commercial solution.
Parkmead continues to assess draft commercial offers received
from the Scott field partnership for the potential tie-back of the
GPA project. 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
just one path to potentially unlock the substantial value of the
GPA project. The GPA project has the potential to deliver 75-130
MMBoe on a P50 basis.
Skerryvore
Progress has also been made on the Group's large Skerryvore
opportunity in the Central North Sea. Seismic reprocessing work is
nearing completion which will further mature the collection of
prospects in the area. Rock physics and inversion studies will soon
commence after a successful tendering process. 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.
UK Renewables Portfolio
Parkmead has completed two successful sales of two separate
areas of non-core land from its UK renewable energy portfolio for
an aggregate consideration of GBP4.0 million, including one that
was completed post period end.
This divestment follows detailed analysis carried out across the
Group's onshore land portfolio. Sites with the largest renewable
energy potential have been retained and high-graded, with a
strategy to divest non-core land. These sales are in line with this
strategy.
Parkmead has identified substantial wind energy potential at one
location within its renewables portfolio, some 15 miles west of
Aberdeen. The acreage has excellent average wind speeds and lies
adjacent to the Mid Hill Wind Farm which contains 33 Siemens wind
turbines with a generating capacity of around 75 megawatts (MW).
Technical studies are already underway on this site.
Parkmead continues to advance its renewable energy opportunities
through its in-house technical and commercial expertise, working
with regional experts. This will ensure that the Group is able to
maximise the upside value from its assets in the renewables
sector.
High-quality Netherlands asset base
Average gross production for the period across the Group's
Netherlands assets was 32.8 MMscfd, approximately 5,648 boepd.
Parkmead's Netherlands production was uninterrupted by the
lockdown restrictions introduced by the Dutch Government during
2020.
The Diever 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.
Diever is the 8th highest producing field in the Netherlands,
according to official data.
A number of further exploration opportunities exist within the
Drenthe VI concession, which contains the Diever 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 is being carried out which will help
define and high-grade the extensive prospectivity around
Diever.
Technical modelling and concept selection planning is being
carried out on the Papekop oil and gas discovery.
Parkmead's Netherlands portfolio includes producing gas fields
with a very low operating cost. Despite the low gas price
experienced in the period, this continues to provide important cash
flow to the Group via profitable gas production.
Results
During the six-month period to 31 December 2020, the Group
generated revenues of GBP1.5 million (2019: GBP2.1 million). This
reduction is mainly a result of the considerable fall in gas prices
to historic lows of under EUR5/MWh during the period as a result of
the market conditions brought about by the COVID-19 pandemic.
Prices have recovered very strongly since and have ranged between
approximately EUR16/MWh and EUR18/MWh during Q1 2021. Despite the
low price environment, gross profit was GBP0.8 million (2019:
GBP0.8 million) demonstrating the high-quality nature of Parkmead's
onshore gas portfolio. Detailed technical work undertaken across
the wider Parkmead portfolio has allowed the Group to release
non-core acreage, such as licence P.2362, considerably reducing
licence costs. The release of this acreage led to a non-cash
impairment charge of GBP0.4 million which contributed to the net
loss of GBP1.6 million for the period (2019: GBP1.7 million loss).
Administrative expenses amounted to GBP1.1 million (2019: GBP0.8
million).
Parkmead's total assets as at 31 December 2020 stood at GBP86.8
million (2019: GBP88.8 million). Parkmead is very carefully managed
and retains an excellent financial position. Cash and cash
equivalents at calendar year end were GBP24.5 million (2019:
GBP25.9 million). Interest bearing loan assets were GBP2.9 million
(2019: GBP2.9 million). Debt reduced during the period to GBP3.1
million (2019: GBP3.6 million). This debt was assumed through the
purchase of Pitreadie. The Group's net asset value remained strong
at GBP68.9 million (2019: GBP70.1 million). Parkmead is therefore
well positioned for growth. This positive position is a direct
result of Parkmead's experienced portfolio management and a strong
focus on capital discipline.
Outlook
Parkmead has delivered significant growth across its asset
portfolio in the six-month period to 31 December 2020 and in the
three months post period end. This had been achieved whilst
maintaining the Group's healthy financial position.
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
growth potential.
As we move further into 2021, Parkmead maintains its appetite
for acquisitions and is carefully analysing a number of
opportunities. 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 2021
Notes:
1. Tim Coxe, Parkmead Group's Managing Director, North Sea, who
holds a First-Class Master's Degree in Engineering and over 25
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 2021.
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.ogauthority.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 2020
Six months Six months Twelve
to 31 to 31 months
December December to 30
2020 2019 June 2020
Notes (unaudited) (unaudited) (audited)
Continuing operations GBP'000 GBP'000 GBP'000
Revenue 1,548 2,111 4,080
Cost of sales (772) (1,308) (2,806)
Gross profit 776 803 1,274
Exploration and evaluation expenses 2 (605) (1,475) (1,556)
Gain on bargain purchase - 362 362
Loss on disposal of property, plant and (35) - -
equipment: other
Administrative expenses 3 (1,192) (836) (257)
------------------------------------------- ------ ------------------ ------------------ -------------
Operating loss (1,056) (1,146) (177)
Finance income 62 95 199
Finance costs (393) (362) (814)
Loss before taxation (1,387) (1,413) (792)
Taxation (165) (303) 310
------------------------------------------- ------ ------------------ ------------------ -------------
Loss and total comprehensive loss for the
period (1,552) (1,716) (482)
------------------------------------------- ------ ------------------ ------------------ -------------
Loss per share (pence)
Basic 5 (1.42) (1.65) (0.45)
Diluted (1.42) (1.65) (0.45)
Condensed Consolidated statement of financial position
as at 31 December 2020
At 31 December At 31 At 30
2020 December June 2020
2019
Notes (unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment: development
& production 11,926 12,442 11,979
Property, plant and equipment: other 8,491 9,533 9,411
Goodwill 2,174 2,174 2,174
Exploration and evaluation assets 36,019 34,918 34,089
Interest bearing loans 4 - 2,937 2,900
Deferred tax assets 3 3 3
Total non-current assets 58,613 61,154 62,556
--------------------------------------- ------ --------------- ----------------- -------------
Current assets
Trade and other receivables 597 1,419 1,414
Interest bearing loans 4 2,937 - -
Stock 114 320 131
Cash and cash equivalents 24,533 25,880 25,708
Total current assets 28,181 27,619 27,523
--------------------------------------- ------ --------------- ----------------- -------------
Total assets 86,794 88,773 89,809
--------------------------------------- ------ --------------- ----------------- -------------
Current liabilities
Trade and other payables (4,162) (4,988) (4,437)
Total current liabilities (4,162) (4,988) (4,437)
--------------------------------------- ------ --------------- ----------------- -------------
Non-current liabilities
Trade and other payables (1,247) (1,837) (1,372)
Bank loan (3,110) (3,600) (3,600)
Deferred tax liabilities (1,404) (1,404) (1,404)
Decommissioning provisions (7,945) (6,873) (7,650)
--------------------------------------- ------ --------------- ----------------- -------------
Total non-current liabilities (13,706) (13,714) (14,023)
--------------------------------------- ------ --------------- ----------------- -------------
Total liabilities (17,868) (18,702) (18,643)
--------------------------------------- ------ --------------- ----------------- -------------
Net assets 68,926 70,071 71,346
--------------------------------------- ------ --------------- ----------------- -------------
Equity attributable to equity holders
Called up share capital 19,687 19,678 19,678
Share premium 87,983 87,805 87,805
Merger reserve 3,376 3,376 3,376
Retained deficit (42,120) (40,788) (39,513)
--------------------------------------- ------ ----------------- -------------
Total equity 68,926 70,071 71,346
--------------------------------------- ------ --------------- ----------------- -------------
Condensed Consolidated statement of changes in equity
for the six months ended 31 December 2020
Share Share Merger Retained Total
capital premium reserve deficit
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------- ----------- ---------- ----------- -------------- ----------
At 1 July 2019 19,533 87,805 - (39,082) 68,256
------------------------------------- ----------- ---------- ----------- -------------- ----------
Loss for the period - - - (1,716) (1,716)
Total comprehensive income for
the year - - - (1,716) (1,716)
Issue of share capital 145 - 3,376 - 3,521
Share-based payments - - - 10 10
------------------------------------- ----------- ---------- ----------- --------------
At 31 December 2019 19,678 87,805 3,376 (40,788) 70,071
------------------------------------- ----------- ---------- ----------- -------------- ----------
Profit for the period - - - 1,234 1,234
Total comprehensive income / (loss)
for the year - - - 1,234 1,234
Share-based payments - - - 41 41
------------------------------------- ----------- ---------- ----------- -------------- ----------
At 30 June 2020 19,678 87,805 3,376 (39,513) 71,346
------------------------------------- ----------- ---------- ----------- -------------- ----------
Loss for the period - - - (1,552) (1,552)
Total comprehensive income / (loss)
for the year - - - (1,552) (1,552)
Share capital issued 9 178 - - 187
Share-based payments - - - (1,055) (1,055)
------------------------------------- ----------- ---------- ----------- -------------- ----------
At 31 December 2020 19,687 87,983 3,376 (42,120) 68,926
------------------------------------- ----------- ---------- ----------- -------------- ----------
Condensed Consolidated statement of cashflows
for the six months ended 31 December 2020
Six months Six months Twelve
to 31 to 31 months
December December to 30 June
2020 2019 2020
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
Cashflows from operating activities
Cashflows used in operations 6 (1) 921 882
Taxation paid (293) (2,592) (1,883)
----------------------------------------------- ------ ----------------- -----------------
Net cash used in operating activities (294) (1,671) (1,001)
----------------------------------------------- ------ ------------------ ----------------- -----------------
Cash flow from investing activities
Interest received 43 37 163
Acquisition of exploration and evaluation
assets (346) (2,154) (3,335)
Acquisition of property, plant and equipment:
development and production (16) (39) (34)
Acquisition of property, plant and equipment:
other (75) (393) (416)
Proceeds from sale of property, plant and 700 - -
equipment: other
Net cash from Pitreadie - 24 24
Net cash generated from / (used in) investing
activities 306 (2,525) (3,598)
----------------------------------------------- ------ ------------------ ----------------- -----------------
Cash flow from financing activities
Lease payments (222) - (410)
Interest paid (56) (20) (113)
Repayment of loans and borrowings (490) - -
Net cash used in financing activities (768) (20) (523)
----------------------------------------------- ------ ------------------ ----------------- -----------------
Net decrease in cash and cash equivalents (756) (4,216) (5,122)
----------------------------------------------- ------ ------------------ ----------------- -----------------
Cash and cash equivalents at beginning of
period 25,708 30,666 30,666
Effect of foreign exchange rate differences (419) (570) 164
----------------------------------------------- ------ ------------------ ----------------- -----------------
Cash and cash equivalents at end of period 24,533 25,880 25,708
----------------------------------------------- ------ ------------------ ----------------- -----------------
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 31 March 2021. 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 2020 to 31 December 2020 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 2019 to 31 December 2019 and the audited
financial year ended 30 June 2020.
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 2020 which were prepared under International
Financial Reporting Standards ("IFRS") as adopted for use in the
European Union, were filed with the Registrar of Companies. The
auditors reported on these 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
2021.
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 2020.
Going concern
The Directors have made an assessment of the Group's ability to
continue as a going concern. As at 31 December 2020 the Group had
GBP68.9 million of net assets of which GBP24.5 million is held in
cash, of which GBP6.5 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. 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 GBP416,000 recorded in respect of exploration licences
relinquished in the period (Six months to 31 December 2019:
GBP1,287,000, Twelve months to 30 June 2020: GBP1,298,000).
3 Administrative expenses
Administrative expenses include an expense in respect of a
non-cash revaluation of share appreciation rights (SARs) totalling
GBP556,000 (Six months to 31 December 2019: GBP349,000 credit,
Twelve months to 30 June 2020: GBP1,428,000 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 increase
in The Parkmead Group plc share price between 30 June 2020 and 31
December 2020.
Administrative expenses also includes a non-cash share based
payment credit of GBP1,055,000 due to options which have been
granted, lapsed or forfeited (Six months to 31 December 2019:
GBP10,000 expense, Twelve months to 30 June 2020: GBP51,000
expense).
Administrative expenses also includes a foreign exchange expense
of GBP419,000 (Six months to 31 December 2019: GBP570,000 expense,
Twelve months to 30 June 2020: GBP164,000 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 2019: GBP37,000, Twelve months
to 30 June 2020: 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. As this is within one year the balance has been
reclassified to current assets.
5 Loss per share
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
2020 2019 2020
(unaudited) (unaudited)
Loss per 1.5p ordinary share (pence)
Basic (1.42) (1.65) (0.45)
Diluted (1.42) (1.65) (0.45)
---------------------------------------- ---------------- ---------------- ------------
The calculations were based on the following information:
Twelve
Six months Six months months
to 31 December to 31 December to 30 June
2020 2019 2020
(unaudited) (unaudited)
GBP'000 GBP'000 GBP'000
Loss attributable to ordinary shareholders (1,552) (1,716) (482)
Weighted average number of shares
in issue
Basic weighted average number of
shares 109,181,797 104,014,105 106,282,006
-------------------------------------------- ---------------- ---------------- ------------
Dilutive potential ordinary shares
Share options 9,314,068 9,314,068 9,314,068
-------------------------------------------- ---------------- ---------------- ------------
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
to 31 to 31 months
December December to 30 June
2020 2019 2020
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Operating loss (1,056) (1,146) (177)
Depreciation 328 240 764
Amortisation and exploration write-off 416 1,475 1,298
Loss on disposal of assets 35 - -
Gain on bargain purchase - (362) (362)
Provision for share based payments (1,055) 10 51
Currency translation adjustments 419 570 (164)
Decrease / (increase) in receivables 779 (247) (683)
Decrease in stock 17 41 230
Increase/(decrease) in payables 116 340 (75)
Net cash flow (used in) / from operations (1) 921 882
-------------------------------------------- ------------------ ----------------- ------------------
7 Business combinations
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. The fair values of the
identifiable assets and liabilities of Pitreadie at the acquisition
date are shown below:
GBP 000
-------------------------------------- -------------------------
Non current assets
Property, plant and equipment: other 8,153
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, were valued at
GBP7,590,000 by CKD Galbraith LLP, a leading independent property
consultancy. The Company also held GBP563,000 of equipment of which
GBP289,000 was leased and recognised under a right of use asset.
The primary objective of the transaction was to acquire land with
significant renewables potential. Based on this valuation the group
has made a bargain purchase gain of GBP362,000
8 Post balance sheet events
In March 2021, Parkmead accepted the award of Licence P.2516
(Parkmead 50% and operator) containing two undeveloped oil
discoveries, Fynn Beauly and Fynn Andrew, as well as an oil
prospect in the Piper Formation
Also In March 2021, Parkmead completed a second sale of non-core
land from its UK renewable energy portfolio for a consideration
GBP3.3 million and has repaid GBP2.61 million of debt.
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END
IR WPUWUWUPGPGU
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March 31, 2021 02:00 ET (06:00 GMT)
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