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Oil boss planning North Sea venture

THE Parkmead Group run by Tom Cross is raising £12.3 million from outside investors who are showing confidence in his plan to build another big oil and gas business in the North Sea.

CROSS WORDS: Aberdeen-based oilman Tom Cross has invested another £3.4m in the oil and gas business.

The Aberdeen-based oilman, who grew Dana Petroleum into a £1.9 billion business, has also underlined his faith in Parkmead's potential by agreeing to invest another £3.4m in the business.

Mr Cross has joined institutions in supporting a share placing through which AIM-listed Dana is raising around £16 million before expenses to further his plan to establish the firm as a significant industry player.

The equity funding will give the company firepower to continue its involvement in the round of mergers and acquisitions that has been sweeping the North Sea.

Mr Cross, who made around £60m when Dana was sold to Korea National Oil Corporation for £1.9bn in 2010, has also converted £3.4m loan funding he provided to Parkmead into shares in the company. He has made a further £4m loan funding available, giving Parkmead access to up to £19.925m.

Mr Cross said: "This important new financing will place Parkmead in a strong position, with over $32m of firepower to accelerate its growth through a number of identified opportunities."

Parkmead said the financing will help it "realise corporate and asset opportunities in a liquid M&A environment".

In the two years since Mr Cross took charge of Parkmead following the sale of Dana, the company has amassed interests in the UK North Sea and Holland.

Mr Cross said: "Parkmead has delivered significant growth in its asset base over the last year, through four acquisitions, successful drilling and the securing of a number of new licence interests."

The company intends to use some of the funding for work on existing assets like the Perth oil field. Parkmead acquired a 52% interest in Perth though the £12.7m all-share takeover of DEO Petroleum in June.

The funding will also support work on the 25 blocks awarded to Parkmead in the latest UK Licensing Round.

Mr Cross, who lead Dana into territories like Egypt and Mauritania, has said Parkmead might move into more overseas markets.

He is increasing his holding from 194.5 million shares to 250 million shares, representing 27.19% of the enlarged share capital following the placing.

Commercial director Ryan Stroulger is subscribing for one million shares. Non-executive directors Philp Dayer and Ian Rawlinson are subscribing for 408,163 shares each.

Subject to shareholder approval, the placing will be completed at 12.25p per share, a discount of 5.6% to the 12.98p average closing mid market price over the week prior to the announcement of the fundraising.

Shares in Parkmead Group traded at 1.38p in October 2010 before it announced Mr Cross would become executive chairman the following month. They closed up 0.5p at 14.75p yesterday.

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