Proactive Investors - Run By Investors For Investors

This oiler has 50% upside, but what's driving the shares today?

Parkmead has increased proved and probable reserves to 27.9mln barrels of oil equivalent from 23.5mln.
This oiler has 50% upside, but what's driving the shares today?
The company wants to create a hub operation around what's currently one of the largest undeveloped areas in the North Sea.

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.

 

 

 

View full PMG profile View Profile

Parkmead Group Timeline

Related Articles

oil and gas operations
September 14 2018
In the longer term exploration drilling will tell, nonetheless, a near 3bn barrel 'pre-drill' resource is certainly attractive for speculative investors
Offshore oil rig
November 01 2018
Calculated EMV10s for the contingent resources stood at US$118mln and US$82mln for the prospective resources
iofina plant
October 10 2018
Iofina produced a record 172.3 tonnes of iodine in the third quarter of 2018, leaving it on track to achieve its full-year target of between 575-605 tonnes

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use