Recent volumes and support MAY indicate things are changing for PMG, but I think it's still too early to call that. Volumes are up and the very recent trend is certainly up, but lower trend is firmly down.
Even with the recent surge in the oil price the stock has still only clawed it's way back to where it was in August and is over 40% down on a year ago, when the oil price was materially lower. So there is still no escaping the fact that even with a rising tide the PMG boat is struggling to float!
When the oil price was last at this level the share price was many times higher ( dropping at an ANNUALISED rate of about ⅓ since then). So either the market has completely misjudged PMG or, even with the current, historically decent oil price of around $68* the market just can't YET see that the upside is sufficiently big and likely to happen to justify buying. Markets get shares wrong from time to time but if there was soundly based expectation- as opposed to mere hope - of big success the price would jump as the professionals piled in.
There are macro issues that also overhang it for me including a potential decline in oil price, the structural move from fossil fuels, Fracking , Saudi political issues and possible impact on supply, and much better COMPARATIVE stocks in which to invest. As well of course as the ongoing FCA and police investigations into the HBOS Reading fraud, which had PMG's former director David Mills ( now serving 15 years at her majesty's pleasure) and subsidiary Quayside Corporate Services at it's heart. I would be surprised if at some point PMG isn't drawn into that quagmire and whether or not culpable, that would bring material issues and costs for the company.
* apart from about 7 years during the ' commodity super cycle' oil wasn't above the current price for decades, and then only rarely. So the current price is actually a very good price! Memories play tricks, and many people delude themselves into thinking that $90/100+ oil is somehow the norm. It isn't.
Well, what was all that about! My guess would be an exchange of shares between institutions, a holding RNS will follow soon if that was the case.
I would still like to bag a few more but only if we dip under 35p.
Every dollar on the poo makes the Greater Perth Area more and more feasible.
Rumour has it that Tom and Ryan are going out and about with 'cap in hand' in the early part of 2018, it is looking like a wonderful time to do so.
well called the Dell.. A punchy s/p rise this afternoon could be the start of a meaningful break out.. hopefully... but we have had a number of falese dawns in that respect in 2017... so too early to tell..
Generally I think this is extremely cheap at anything sub 50p .. and cheap at anything sub 65p ... remember that this has been completely left behind while many others recovered somewhat in 2017.. M or A activity a distinct possibility here in 2018 too.. Tom Cross is worth betting on at these s/p levels every day of the week imho...
Every day recently share volumes traded have been consistently high, today again by 9.00am not great individual stakes but up to 250.000 traded . Someone is accumulating. And surely there must be a % breakout soon.
Time will tell whether Tom has lost his golden touch, I don't think he has, but it is hard to argue with the depreciation in share price since the acquisition.
£36m for what we have to offer is a steal, in my opinion.
I remember reading this interview with Tom from 2010, like him I was opposed to the sale of Dana. However, the sale price was such a premium that every single shareholder in Dana made money, my average was around £12 but there were plenty still holding from the penny share days.
Why back Tom?
Experience setting up a 'Parkmead' previously? YES, Very successfully.
Aligned with Shareholders interests? YES, pretty much everything he has is invested in Parkmead.
Past it? NO, at 57 years old he has his best years ahead of him.
ABERDEEN dealmaker Tom Faichnie has predicted a surge in mergers and acquisitions will transform the business landscape in the city this year amid signs brighter times are in prospect for the key oil and gas sector.
Mr Faichnie reckons a sharp increase in deal activity is likely as the partial recovery in the crude price leaves the owners of some businesses keen to expand and others ready to head for the exit.
Oil is still a volatile commodity and the North Sea remains a long way off a full recovery, however, over the past two years companies have seen their financials stabilise and reach a steady base, said Mr Faichnie, managing director of Hall Morrice Corporate Finance. The worst is over and order books are tipping in the right direction.
He added: Many business owners have been through this cycle before: they simply no longer want to go through another round of ramping a business up and developing it to the pre-downturn levels. They are saying, Its now sellable, lets exit.
Mr Faichnie predicted a range of small and medium sized enterprises could get swept up in the wave of consolidation in the oil services sector triggered by the sharp fall in the crude price since 2014. With some firms needing to increase their scale to help them compete, the process has a way to run yet.
There are a lot of companies out there for which the quickest solution will be to merge, said Mr Faichnie.
A range of private-equity backed oil and gas firms bought North Sea assets from majors last year.
Brent crude traded at around $66.50 per barrel yesterday against less than $30/bbl in the first quarter of 2016. It fetched $115/bbl in June 2014.
A sector analyst said Brent could top $100/bbl this year if political unrest in Iran resulted in an interruption to production in the country.
Geopolitical risks are clearly back on the crude oil agenda, said Bjarne Schieldrop of Scandinavian bank SEB.
THE North Sea oil and gas industry can look forward to brighter times next year with firms adapted to the new normal of relatively low crude prices, experts have said.
Following three years of deep cost cutting in response to the sharp fall in the oil price since 2014, companies are expected to put renewed emphasis on growth in 2018.
The wave of company failures which blighted the area may have about run its course.
However, with firms in the supply chain likely to remain under pressure there is no indication many new jobs are on the way to compensate for the thousands of lay offs seen in recent years.
After bodies such as Aberdeen and Grampian Chamber of Commerce reported signs of recovery in the North Sea recently, prominent oil and gas specialists said confidence is definitely on the rise off Scotland.
A sense of cautious optimism has returned to the North Sea after a very challenging few years, said Graham Hollis, senior partner for Deloitte in Aberdeen.
Fiona Legate, senior UK exploration and production analyst at Wood Mackenzie, said the energy consultancy reckoned 2017 represented the bottom of the market. It does feel we are over the worst, she said.
The improvement in sentiment partly reflects growing confidence the crude price will remain at around $60 per barrel after exporting countries agreed to extend curbs on production through 2018.
Crude sold for less than $30/bbl in the first quarter of 2016, before Opec members decided in November of that year to limit output to support the market.
Signs that stability is returning to the market have helped trigger a surge in mergers and acquisitions activity in the North Sea. Trade body Oil & Gas UK reckons the value of deals jumped to around $8bn from $2bn in 2016.
Mr Hollis noted a number of private equity-backed firms became active or significantly increased their presence in the UK North Sea in the past 12 months. These include Chrysaor, which bought a $3.8 billion portfolio from Shell.
We are likely to see more transaction activity in 2018, as the basin continues to recover from a prolonged downturn in investment and overall activity levels, he predicted.
Kevin Reynard, PwCs senior partner in Aberdeen said its oil and gas deals team has lots of work on.
He noted tax breaks included in the November Budget should encourage interest in the area.
Experts reckon the price expectations of buyers and sellers are more in line than they were in the depths of the downturn.
Majors are likely to continue selling North Sea assets to free up funds to invest elsewhere. BP and Shell have been prominent sellers.
However, Ms Legate noted signs of renewed interest in exploration on the part of majors such as BP.
It is investing heavily with Shell West of Shetland where Ineos has made clear it wants to be a major player after buying assets from Dong Energy in 2017.
The expectation is firms that buy acreage will invest in areas such as increasing production and extending the lives of fields. Companies are not spending $3bn buying assets not to invest in them, said Mr Reynard.
Ms Legate noted existing owners have also shown willingness to invest after three years of sharp cuts in spending in areas other than essential maintenance.
People are starting to make investment decisions, which we have not seen, said Ms Legate.
She added: Weve reached the new normal. Theres been a lot of adapting and cuts in operating costs that have helped ... people are starting to look at growth and the future.
Hurricanes decision to approve the $500m Lancaster development off Shetland has generated excitement.
Wood Mackenzie expects costs will rise next year as supply chain workloads increase.
But services firms will still face pressure to help clients increase profitability.
The prospect of a return to the boom conditions seen amid the period of high crude prices that ended in 2014 remains remote.
Platypus well is being fast tracked Koreans are on board.... ..Perth Development taking shape, Parkmead have applied for another licence in the in the GLA area. Collaboration with the service companies taking place. Cavendish has been buying up the stock !
Panmure Gordon reiterate BUY rating but reduce target to 70p.
I have to take everything they say with a huge pinch of salt as they are our nominated advisor and one of our financiers and a market maker in our stock.
Unrisked they reckon 284p.
The note is on Parkmeads website under 'External Research'
Yes I hope to be at the AGM....My thoughts have not changed since I bought my first share. We have seen the first oil, trap oil, Excite and as many others go bust, yet Cross survives he knows how to work the North Sea for oil and gas. Plus he now has acreage round the West Coast of Shetland. Its all down to Time, Patience and collaboration.
An upbeat, optimistic report, as you would expect.
Sanda North & South gets talked up in the search for a farm out partner and an interesting section on the forecast for future oil demand and supply.
Also notable that the company is open to opportunities in any form of energy generation, not simply oil and gas.
I agree that there are similarities, the main one being that they are run by experienced teams.
I bought Serica from 40p right down to 5p whilst the share price seemed in terminal decline. Operationally things were great but for whatever reason investors sold out. Serica, like Parkmead only issue news when there is news to report, so many AIM and small caps ramp there businesses that they inevitably end up over valued.
When and If there is a seismic change to Parkmeads fortunes it will be swift, there aren't too many 'free float' shares around.
I am waiting in expectation rather than hope, just as I was with Serica, but only invest what I can afford to lose as part of a balanced portfolio.
Contrary to popular belief AIM is still as wild as the Wild Wild West ever was, there are no exceptions.
Netherlands-focussed independent energy group Parkmead posted its preliminary results for the year to 30 June on Friday, reporting gross profit of £1.2m for the period, swinging from a £4.6m loss in the 2016 financial year.
The AIM-traded company said it had a strong total asset base of £82.2m as at 30 June, adding that it had maintained strict financial discipline.
It also remained well-capitalised, with cash balances of $34.3m (£26.4m) as at period end, as well as a balance sheet free of debt.
Parkmeads low-cost Netherlands gas production was providing positive cash flow to the company, the board said, with all revenues from Netherlands production received in euros, mitigating recent currency fluctuations.
On the operational front, Parkmead said new dynamic reservoir modelling suggested Diever West had approximately 108 billion cubic feet of gas-in-place volumes, which is more than double the post-drill static volume estimate of 41 Bcf.
The group had thus substantially increased production from its Diever West gas field by perforating the Akkrum reservoir formation.
2017 has been an important year of progress for Parkmead, said executive chairman Tom Cross.
The group moved into gross profit as a result of increased gas production and the cost reduction programme in the UK.
This is an outstanding achievement for Parkmead at a time when global oil prices have remained low.
Cross said Parkmead's gas production acted as a natural hedge in the challenging oil price environment.
We are delighted to have significantly increased production at the Diever West gas field, which increases Parkmead's cash flow.
New reservoir modelling indicates that Diever West could be more than double the size originally expected.
Cross said the company was also pleased to have been able to increase its stakes in core areas of its portfolio during the year, particularly around the Greater Perth Area oil hub in the UK North Sea, where Parkmead strengthened its position.
The group is in discussions with leading international service companies and oil companies with regards to the Greater Perth Area, Cross added.
The team at Parkmead is working intensively to evaluate and execute further value-adding opportunities which could provide additional cash flow to the company.
Parkmead is analysing both oil and gas, and wider energy sector opportunities, which could broaden and enhance the group's revenue stream.
Cross added that Parkmead was well-positioned for growth.
We have excellent regional expertise, significant cash resources, and a growing, low-cost gas portfolio.
The group will continue to build upon the inherent value in its existing interests with a balanced, acquisition-led growth strategy, securing opportunities that maximise long-term value for our shareholders.
Oh dear CSZ you dont seem to get facts correct do you?
PMG website has broker notes from Panmure Gordon going back to 2015 with the figures that I posted. Colin Smiths note in November 2015 had target price of £2.94. How right was he
Maybe you need to phone the company or Panmure to check.
You need to get up to speed £1.05 Panmure initiated March 2017.....
Buy the way bought just shy of 3K shares yesterday. Stick with Parkmead all looking good with service companies financing oil wells who needs sceptics.
CSZ, Panmure Gordon have been as good at calling PMG as you have. In July 2015 they had a buy rating and target of £2.94 when the share price was 87p.
In December 2015 the price was 71p and their target was reiterated at £2.94.
November 2016 price was 55p and target was £1.05.
Sounds like a great bunch to follow!
Much appreciated NQM. I've flicked through them briefly.
I confess I just find PMG too opaque to get a proper understanding of the chances of the possible upside materialising. For example in the latest accounts, certain exploration licences were written off indicating the managements judgment was wrong on those investments ( which I guess is the nature of the business) but makes me wonder whether the carrying value of assets is going to be hit.
But also the full year turnover of £4.14m resulting in a GP following the shut in of Athena half way thru the year indicates that H2 turnover was at a much slower run rate than H1 ( H1 was £2.7m , FY was £4.14m so H2 = £1.44m- less than £250k pcm- an annualised rate in H2 of only £2.88m). So there's nothing that gets me excited and as it is all so opaque I wouldn't invest in PMG at this price nor at this time. When considering other opportunities in the market that I think are much better, that reinforces my view that PMG COMPARATIVELY is a sell, to redeploy the capital elsewhere.
Also, I am very nervous of the markets generally. There are many, many reasons to be nervous, and I can't see what the catalyst to much further growth will be in at least UK equities as a class during 2018. So, across the market as a whole there seems to be little upside and big downside from any one of many events which could trigger a rush to the exits. If that happens all stocks, good and bad, get dragged down and even if PMG is making good progress in its business ( which personally I think is too early to judge) the sell off will ignore it. So on a one year view, for both reasons, I doubt a sufficient return is likely to justify holding a stock of this risk profile, and my best guess is that during the coming year there will be an opportunity for anyone who wants to, to buy in at a lower price
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