Scottish energy group Parkmead is pressing ahead with drilling at its Skerryvore field in the UK North Sea some seven years after first announcing its intention to do so.

The Aberdeen-based company has also upped its stake in the project, which is its first operated exploration well. It has boosted its share from 30 to 50 per cent after NEO Energy, which previously held a 30% stake in the area, left the project with a third of its holding going to CalEnergy and the rest to Parkmead.

Industry regulators at the North Sea Transition Authority (NSTA) have given the green light to drill at what Parkmead described as the “high-impact” Skerryvore prospects, which are thought to contain up to 157 million barrels of oil equivalent (mmboe) within the two main exploration areas. The licence also contains additional potential prospects at lower levels which could be tied into existing and planned infrastructure in the area.

The announcement comes as new Prime Minister Liz Truss seeks to ramp up extraction from the North Sea to help contend with the energy crisis as the UK heads into winter.

Tom Cross, executive chairman at Parkmead, noted that Skerryvore sits in close proximity to several other active prospects. Theses include the adjacent Talbot discovery where Harbour Energy is set to invest, and NEO Energy’s redevelopment at Affleck.

READ MORE: Energy company pushes ahead with 'one of the North Sea’s largest undeveloped oil projects'

Development activity is also taking place in the Norwegian sector of the North Sea at Tommeliten A, a licence operated by ConocoPhillips.

“Parkmead’s technical team has made significant progress on the licences held by the company and the decision to proceed with drilling the Skerryvore prospects is a major milestone,” Mr Cross said.

“Parkmead will continue to evaluate the exploration potential of other licences it holds. We are seeing renewed UK Government interest in the North Sea, as it seeks to bolster energy security, and we are excited by the opportunities that exist within our assets in the prolific region.”

The Aberdeen-based company will continue with the project alongside joint venture partners CalEnergy, which now owns a 30% stake in Skerryvore, and Serica Energy with 20%. Parkmead’s decision to increase its holding comes after the company generated record revenues from its Dutch gas assets.

READ MORE: Parkmead predicts record gas profits with new drilling ahead of schedule

“We will continue to focus on building a portfolio of high-quality energy projects through acquisitions, organic growth and the active management of our assets across all energy sectors,” Mr Cross added.

Like other exploration and production companies, Parkmead has benefitted from surging wholesale energy prices, with gas prices across Europe rising by more than 250% during the past year.

In its trading update for the year to the end of June Parkmead said revenues from its gas assets in the Netherlands will be ahead of expectations, and are likely to exceed £12.6 million. This came after it secured additional volumes in a royalty deal with Vermillion Energy that doubled its financial interest in the onshore Drenthe IV, Drenthe V and Andel Va licences to 15%.

The company also said that it is ahead of schedule on its latest drilling campaign in the Netherlands, which comprises two LDS wells at the existing Diever site. The wells will target a combined 37.2 billion cubic feet of gas within the Rotliegendes reservoirs, which should result in “significant” additional revenue and cash flow.

Parkmead said it expects to receive a drilling rig for the two wells early in the fourth quarter of this year, ahead of its previous schedule.

The company is 100% unhedged against fluctuating energy prices, meaning that it has received the full benefit of higher commodity prices.

Average gross profit per barrel of oil equivalent (boe) was approximately $120 during the year to the end of June, with a field operating cost of just $8.60 per boe. Average gross production across the Dutch portfolio was 21.8 million cubic feet per day, equal to roughly 3,750 boe per day.