A bullish Tom Cross said low oil and gas prices provided a “win-win” situation for his firm Parkmead as the independent oil and gas explorer confirmed its recent North Sea license wins.
The founder of Parkmead said “we know exactly what we are doing” with its stakes in the new licenses, two of which are West of Shetland and one on the southern North Sea gas basin.
Mr Cross said it was “slightly too early” to indicate if the company would link to facilities of existing major operators West of Shetland. But he highlighted their proximity and similarities to BP-operated Foinaven, Schiehallion and Loyal oil fields, and also in the Total’s Laggan and Tormore gas discoveries.
The blocks are also adjacent to the firm’s existing prospects in the area.
“We have already got the prospects mapped out,” said Mr Cross.
“We are looking at the timing of doing it.
We have worked with Total and BP in the past.
“If we can put additional oil and gas through their facilities it is good for them too.”
He added that Parkmead’s management team – which is largely the same as that which led Dana Petroleum – understood both regions “extremely well”.
“We have had discoveries in these areas in the past, we have brought fields on stream in the case of the gas basin, both as Dana Petroleum and Parkmead,” he said.
Parkmead’s management previously built Dana Petroleum, which was sold to the Korea National Oil Corporation (KNOC) a £1.7 billion deal in 2010.
In May Parkmead raised £13.4million in a share placing with institutional investors that Mr Cross said was oversubscribed.
At the same time, the firm said it had renegotiated its contract with BW Offshore, the provider and operator of an FPSO that produces a significant chunk of the firm’s revenues from the Athena field in the Moray firth.
“That has turned that into profit even at a low oil price,” said Mr Cross.
Following the placing, Mr Cross said the company has £38million in the bank and a debt free balance sheet, while pressing ahead with developments in Moray and the Netherlands.
“If oil price stays low we can benefit from being able to drill at very low cost,” he said.
“Some of the wells we budgeted last year have halved in cost because of the squeeze in costs in the service sector.
“It is win-win for us – we can progress our businesses in this low oil price environment. At the same time when the oil price picks up we can take advantage of that too.”
Parkmead was awarded the licences covering three offshore blocks in the UK’s 28th Licensing Round announced last week as part of the second tranche of awards. Parkmead also won six licences covering nine offshore blocks in the first tranche of awards in November.
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