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Parkmead courted by overseas firms

OIL entrepreneur Tom Cross's Parkmead Group has been approached by major international companies from the Far East and mainland Europe which are looking to form partnerships to exploit North Sea opportunities.

LEADING LIGHT: Tom Cross, the winner of the Entrepreneur of the Year award last year, has plans to grow Parkmead.
LEADING LIGHT: Tom Cross, the winner of the Entrepreneur of the Year award last year, has plans to grow Parkmead.

Mr Cross revealed yesterday that the Far Eastern company and European group, both of which he has done business with before, had been in Aberdeen-based Parkmead's offices within the past fortnight to discuss potential alliances.

He believed Parkmead would work with these companies "in some shape or form", and that such alliances would probably involve a mixture of his venture's current licences and examination of new acquisitions. Mr Cross highlighted the "alignment" of these large players' low cost of capital and his team's North Sea expertise.

The entrepreneur, who built up Aberdeen-based oil and gas independent Dana Petroleum and made about £57 million from this group's £1.9 billion sale in autumn 2010 to Korea National Oil Corporation, also revealed the team at Parkmead was "probably looking at 12 things" on the acquisition front. He added that these prospects were a mixture of assets and companies.

Mr Cross said: "In the history of Dana, over 15 years we made acquisitions every year. We see something very similar in Parkmead."

He outlined his ambitious plans to expand Parkmead, which he has already built into a company with a stock-market worth of about £120m, as the group unveiled half-year results. Parkmead achieved revenues of £1.97m in the six months to December 31, up 48% on the same period of its prior financial year.

Mr Cross said that, as had been expected during this "early stage of growth", Parkmead had made a loss of £2.76m. This was similar to its £2.64m loss in its prior first half.

Mr Cross highlighted Parkmead's acquisition last August of Aberdeen-based DEO Petroleum, which brought a 52% working interest in, and operatorship of, the Perth field in the central North Sea. He cited as another "milestone" deal the acquisition of a portfolio of Netherlands onshore assets from Dutch group Dyas, which gave Parkmead its first producing assets.

Mr Cross, who has a 27.2% stake in Parkmead and is executive chairman, cited the part these transactions had played in raising the company's proven and probable reserves to 22.9 million barrels of oil equivalent (boe), and increasing additional contingent resources to 11.3 million boe.

He also highlighted the fact Parkmead had been awarded, and made operator of, 25 blocks in the central North Sea, West of Shetland, and West of Scotland areas in the 27th UK licensing round last year.

Mr Cross, who won the Scottish-based Entrepreneurial Exchange's Entrepreneur of the Year award last year, said: "Because we have the ex-Dana Petroleum team – we were the largest independent operator in the North Sea – we are taking those credentials forward. The Government are backing us in a pretty significant way to repeat what we did at Dana."

He meanwhile highlighted Parkmead's involvement in the successful appraisal well drilled through the middle of the Platypus gas field in the southern North Sea and plans for commercial development of this asset. Parkmead and Dana are partners on the Platypus project. The pair are also partners on the large Pharos gas field in the southern gas basin, with Mr Cross highlighting plans for drilling on this prospect later this year.

Mr Cross also highlighted benefits to Parkmead from Faroe Petroleum's recent deal to acquire a 50% stake in the Lowlander field, close to the Perth oil area.

He noted that development of the Lowlander field across the Perth infrastructure would improve the "project economics" for all stakeholders in the area.

Mr Cross highlighted Parkmead's strategy of growing by acquisition and through organic growth, in terms of participating in licensing rounds, gathering seismic data and drilling. Shares in Parkmead were unchanged yesterday at 13p.

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