The all-paper deal will give Parkmead a 10% stake in the Ithaca Energy operated Athena oil field, which began production last year and currently yields up to 11,000 barrels per day (gross).
This will represent a 400% increase in Parkmead’s production, and it also adds 2.3mln barrels of oil reserves. Furthermore, the cash flows from Athena will help fund the development of Parkmead’s other assets.
Through the deal, which values Lochard at 4.9p, investors will receive 0.385 Parkmead shares for every Lochard share they own.
Parkmead already has approvals accounting for about 40% of Lochard’s shares, after a number of major shareholders backed the proposal.
"This is the most exciting and important deal for Parkmead to date,” said Clive Carver, Parkmead chairman.
“The acquisition of Lochard will increase Parkmead's production by over 400 per cent, and therefore provides it with a significantly enhanced cash flow profile.
“Furthermore, the addition of Lochard's production will enable Parkmead to deliver its ambitious growth plans. This follows the acquisition of DEO Petroleum plc, first production from the Netherlands, successful horizontal appraisal drilling at the Platypus field and the major award of 25 blocks across the UKCS, all achieved by Parkmead within the last 12 months."