A significant reduction in operating costs helped Parkmead group reduce its post tax loss to £4.8million, compared with £14.9million in 2014.
The Aberdeen-based oil and gas company, run by Tom Cross, reported its interim results for the second half of 2015. Operating cost reductions, combined with no impairment charge being recorded compared to the corresponding period the previous year, helped reduce the Group’s post-tax loss substantially.
The company’s low-cost producing gas fields in the Netherlands (where the four separate gas fields have an average operating cost of $14 per barrel of oil equivalent) have made money despite very low current commodity prices.
The new Diever West field in particular has extremely low operating costs in the region of $12 per barrel of oil equivalent.
The Athena field was shut-in in January 2016 following which the final operating costs will substantially be incurred before the end of first quarter of 2016, Parkmead said in a statement.
During the six month period to December 31, 2015, Parkmead generated revenues of £7.0 million compared to £10.1million in 2014, due largely to the oil price slump which saw Brent crude oil averaging $48 per barrel in the second half of 2015 compared to $91 per barrel in the second half of 2014.
The reduction in revenue was partly offset by the increasing contribution from Diever West in the Netherlands following first gas in November 2015.
In July 2015, Parkmead was awarded a new offshore licence in the West of Shetland region under the UK 28th Licensing Round.
The newly awarded licence, covering Block 205/13, is situated adjacent to some of Parkmead’s existing blocks in the West of Shetland area.
Two prospects, Sanda North and Sanda South, have been identified in Block 205/13 and provide material upside to the Davaar prospect, which has a potential resource of 186 million barrels of recoverable oil. Parkmead has upped its stake in Block 205/12, containing Davaar, to 74% and aligned the equity ownership across the two licences.
Executive chairman Cross, said: “Parkmead has developed a new gas field at Diever West, in the Netherlands, following its successful discovery. This is delivering profitable gas production and important additional cash flow to the Group. We successfully brought this new gas field onstream within 14 months of discovery, which is an outstanding achievement.
“Parkmead is increasing the group’s overall gas production in the Netherlands through a low-cost, onshore work programme. This will act as a natural hedge to the current low global oil prices.
“We are delighted with our new additional licence award, in the West of Shetland region, which further increases the scale of Parkmead’s oil and gas operations in the UK. West of Shetland is an area we understand well and has the potential to add major value to the company.”
Cross said Parkmead will continue with its licensing and acquisition-led growth strategy.
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