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Parkmead Group investors welcome oversubscribed £40mln funding

Parkmead Group investors welcome oversubscribed £40mln funding

Parkmead Group (LON:PMG) has raised £40mln (US$66mln) through a share placing to help fund upgrades to the producing Athena field and support its continued exploration and appraisal efforts.

The North Sea oil firm, run by founders of the Dana Petroleum business, issued 15.68mln new shares (equating to 22.5% of its existing shares) at a price of 255p each.

The funding was oversubscribed and appears welcome, as the group’s shares remained at a healthy premium to the placing price - up 8p, or 3%, trading at 266p in early deals.

Having acquired a 30% stake in the Athena field - through two separate transactions last year – the company will now participate in programmes to work over and enhance the field’s operation. Today’s funding will, in part, pay for that work.

Parkmead also intends to use some of the money for “high impact” exploration drilling on the Skerryvore oil as well as the Possum, Blackadder and Davaar prospects.

Further acquisitions could also be possible with the backing of today’s placing. Parkmead says that following its acquisitions into Athena, it believes there are similar opportunities to target and the certainty of funding is the key to successful negotiations.

Parkmead chief executive Tom Cross said: "2013 was an excellent year for Parkmead, with the company delivering significant growth throughout its asset base and in its production profile.

“This important, oversubscribed placing with major institutional investors will place Parkmead in a strong position, with over US$66mln of firepower to accelerate its growth through the development of its existing asset base, the planned applications in the recently opened UKCS 28th Licensing Round and further corporate opportunities."

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