Shares in Parkmead Group PLC (LON:PMG) rose 14% after clinching a deal that will increase its oil reserves in the Moray Firth by almost a fifth.
It now owns just over 60% (up from 52%) of the licences for the Perth and Dolphin (PDL) areas that are host to two “sizeable” accumulations light crude and that have been tested at production rates of 6,000 barrels a day.
As a result of the transaction, Parkmead has increased proved and probable reserves to 27.9mln barrels of oil equivalent from 23.5mln.
No financial details were given.
This latest deal follows the company’s recent acquisition of an additional 50% of the Polecat and Marten fields, announced last month.
Given their proximity to Perth and Dolphin, it is hoped they can be incorporated into a larger North Sea oil producing area.
The Moray Firth is already host to some big operations, including the Piper, Claymore and Tartan fields.
“This growth step strengthens Parkmead's asset base in the centre of the company's major Perth-Dolphin-Lowlander oil hub project, which is one of the largest undeveloped oil projects in the North Sea,” said Parkmead chief executive Tom Cross.
Shares in Parkmead, which have advanced 30% in the year to date, were changing hands for 55.94p for a rise of 6.69p.
The small-cap broker finnCap reckons the stock is worth 80p, while Panmure Gordon says 'buy' up to 105p.
"The pace of deal activity at Parkmead is picking up, and we continue to anticipate that the company will be able to achieve further value adding deals, given Tom Cross’s track record and what looks like a market for transactions in the UK North Sea that is beginning to creak open," said Panmure's Colin Smith.