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
That all sounds perfectly plausible. Thanks
For taking the time to post . Has any
Non partisan broker made a stab at forecasting revenues, cash burn and asset values going forward?
BTW I have no
View on Tom- just that so far at PMG and after a reasonable period he has not delivered value and actually destroyed quite a bit so I won't take any thing he says at face value. The recent statement seemed to contain some spin in my eyes which doesn't help.
UPDATED: Parkmead narrows losses as gas increases and costcutting puts the group back to financial strength
Written by Alan Shields - 17/11/2017 7:25 am
Parkmead boss Tom Cross
Aberdeen-based firm Parkmead Group has narrowed losses as acquisitions and cost cutting helped the company show its financial strength.
Increased gas production and the UK based cost reduction programme were cited for swinging gross profit from the red into the black.
And the firm is on the lookout for value-adding opportunities not just in oil and gas but in the wider energy sector.
Although overall revenues fell for the year ending June 2017 to £4.1million down from last year ends reported £10.4million the company managed to post a gross profit.
Parkmead aims for right balance in its energy mix
Parkmead completes North Sea acquisition
Faroe Petroleum posts strong results, after financial U-turn
The firm made nearly £1.2million at year end, compared with the £4.6million loss of last year.
Losses before tax were narrowed to £4.3million, down from last years £6.4million.
Highlights for Parkmead included doubling gas volumes at the Diever West project in the Netherlands and a number of North Sea acquisitions.
The firm doubled its stake in the Polecat and Marten oil fields to 100% in the central North Sea, which are jointly estimated to hold around 90million barrels of oil.
The fields are around 20km east of the major Buzzard field and are close to Parkmeads Greater Perth Area (GPA) oil hub in the Moray Firth area.
Parkmead also increased stakes in the Perth and Dolphin oil fields, part of the GPA, in the UK Central North Sea to 60.05%, further building the firms reserves.
The company is also in talks with a number of firms about a possible alliance for growing the GPA.
A total of seven acquisitions were made during the year, with further opportunities still being considered by the company.
Parkmeads executive chairman, Tom Cross, said: 2017 has been an important year of progress for Parkmead. 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.
Parkmeads gas production acts 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 Parkmeads cash flow. New reservoir modelling indicates that Diever West could be more than double the size originally expected.
We are also pleased to have been able to increase our stakes in core areas of the groups portfolio during the year, particularly around the Greater Perth Area oil hub in the UK North Sea, where Parkmead has strengthened its position. The group is in discussions with leading, international service companies and oil companies with regards to the Greater Perth Area.
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 groups revenue stream.
Parkmead is 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.
Parkmead Group is looking beyond traditional oil and gas activities for new acquisition opportunities, chief executive Tom Cross has revealed.
Mr Cross said the Aberdeen-based firm had to be cognisant as people increasingly looked for more diversity in the overall energy mix.
He was speaking after Parkmead, which is steadily growing its asset portfolio in the UK North Sea, announced a narrowing of annual profits.
The company also reported major progress in its plans for the Greater Perth Area (GPA) in the Moray Firth, with higher oil prices and lower project costs helping to bring the development onstream.
Parkmead has consistently said it is on the lookout for new oil and gas opportunities, and its accounts for the year to June 30 highlighted seven acquisitions and others at the evaluation stage.
The firm doubled its stakes in the Polecat and Marten fields to 100% and these alone are estimated to hold more than 90million barrels of oil.
Reserves were further boosted by the company increasing its stake in GPAs core Perth and Dolphin fields to 60.5%, from about 52% previously, while it also acquired a 50% interest in the licence covering the Farne extension project and a further four gas prospects.
The firm is sitting on best estimate net contingent resources totalling 62million barrels of oil equivalent and has substantially increased production from its Dutch gas assets, while it is also debt free.
Mr Cross said Parkmeads top team were involved in a lot of discussions about the energy landscape and the likely energy mix going forward. He added: We need to be cognisant of the energy landscape. People want more sources of electricity.
The company would leave no stone unturned as it builds for the future and works out the right balance between oil, gas and other forms of energy, he said.
GPA project costs are likely to come in at a few hundred million pounds but Mr Cross said it was impossible to give an accurate estimate as it depends on how many neighbouring areas are brought through.
The company hopes to submit a field development plan to the UK Government during 2018.
Pre-tax losses for the company came in at £4.3million, against a deficit of £6.4million a year earlier, though Parkmead highlighted a return to the black in terms of gross profits.
Revenue fell to £4.14million, from £10.44million previously, following the shut-in of the Athena field in 2016.
Norges banks advice is long overdue, to reinvest revenue derived from oil and gas back into oil and gas leaves the fund doubly exposed to the volatility in the oil price.
I take your point though, and I agree with it, oil prices are probably going to be lower forever but we will need oil, in some form or other, for the rest my lifetime.
I think the prediction is for oil demand to peak around 2040. I take everything oil industry experts say with a pinch of salt, it was only a few years ago they were saying that $100 oil was the new normal.
My opinion, However, is that there is plenty of life left in the North Sea and now is a great time to acquire assets at reasonable prices. It's all about buying the right ones, the ones that can be developed cheaply either on their own or as part of a collaborative project. $40-$60 a barrel oil is still profitable and gas even more so when you can find assets that produce at $6 per boepd.
The strategy since the oil price collapse has been to own 100% of any licences we really fancy (Done in the main)
Prove up the resources and draw up a development plan (Being Done)
Farm out 60% or so of the licence to a biggie in return for funding to explore or develop (whatever your opinion of Tom and his team, there's no doubting they have the knowledge and connections to talk with the majors in the North Sea)
With Greater Perth its a 60/40 split with Faroe, so they could feasibly attract funding and do it together, but I would be happier if we were to farm down a portion there too.
I take your point that the management have been in place for years and on the face of it done very little.
I think the changes in the oil industry caught everyone out, Venezuela, Nigeria, Saudi Arabia, Russia and others are still running budget deficits due to the price collapse.
With that in mind I think it's fair to say this is the main reason why PMG has fallen in value by 90-95%. You know it's bad when Aramco are trying to sell off a part of themselves!
Funnily enough I read an interview with Tom Cross by Energy Voice over the weekend. He said the company are screening all energy investments at the moment, oil, gas and renewables.
Good companies sometimes get dragged down in a sector wide collapse, I think PMG is one.
I see we share an interest in a certain retirement house builder so you can't be all bad!
What do others think about the S Times Business story today 'Hammond poised to throw tax
lifeline to oil and gas producers attempting to unleash estimated £40bn of new North Sea
investment to revive the industry....'
New rules will allow producers selling fields to roll over tax credits to new owners. Reforms
will enable buyers to reclaim the cost of decommissioning wells when they run dry.
Parkmead Group says 2017 has been an important year of progress
The group moved into gross profit as a result of increased gas production and the cost reduction programme in the UK, Cross said in a statement
oil and gas operations
Parkmead reported £1.2mln gross profit for the year
Parkmead Group Plc (LON:PMG) executive chairman Tom Cross has described 2017 as an important year of progress for the company.
The group moved into gross profit as a result of increased gas production and the cost reduction programme in the UK, Cross said in a statement.
READ: Parkmead takes full ownership of North Sea gas exploration project
This is an outstanding achievement for Parkmead at a time when global oil prices have remained low.
Parkmead's gas production acts as a natural hedge in the challenging oil price environment.
Parkmead reported £1.2mln gross profit for the year, marking an improvement from a £4.6mln loss in the preceding year.
The company highlighted that it ended the twelve months, to June 30, well capitalised with a cash balance of US$34.3mln and it was debt free.
Cross added: 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.
I appreciate your post as it contains facts.
That may mean the company has turned the corner . But the current senior management have been in situ for 7 years and yet all their PR reads like they are just getting started.
Obviously being operators will see overheads and income jump.
Still very heavily tied to the oil and gas prices and I see that the incredibly successful Norwegian State investment authority has just announced it is to sell out of all its oil investments.
PS the only reason the argument appears one sided to you is because those complaining about my posts don't give any logical arguments for holding, other than posting verbatim company circulars and tweets.
Words like "obsessed" and "negative" in your posting are factually inaccurate and hence reveal a bias. Discussion boards like this are designed for people to share views. That's what I've done. Those suggesting I am negative are, surprisingly, not engaging in any debate let alone providing any grounds for suggesting that my posts are factually inaccurate. Hence it seems that the only basis for people to call them negative is that they are the opposite of their own views.
Effectively, even though my views, supported by fact and logic, on why PMG is COMPARATIVELY a poor investment have been born out, month after month by the share price falling whilst markets boom, I am called negative. Yet my posts , if considered and acted on, would have made people money. If you think posts that, hindsight shows, can help people avoid losses and make money are negative then that is an odd definition.
It seems I am called negative merely because people need me to be wrong to make money. That is foolish. The problem is many amateur investors can't admit when they have made a mistake, even when sitting on large losses. They don't look objectively for information to help them analyse the situation and make the right deceision, they read everything looking only for information that confirms their view and ignore anything which doesn't. It's well known, called Confirmation Bias and the several books I've read about Danny Kahneman and Amos Tversky's Nobel prize winning work on the human mind has enabled me to largely avoid such biases in my own thinking. More importantly it also enables investors to understand how The Market ( which is just a name for a bunch of individuals with fallible minds) is likely to react to news, and explains why many shareholders do not sell bad stocks soon enough. Doing well in the markets, as I have been fortunate enough to have done, is not just about picking the right opportunities, but about knowing when to get out of them and partly that is based on knowing what The Market i.e. Other people are likely to do. For example I was late to the Carillion party, only shorting after the bounce following the second profit warning. The market bought on hope despite the obvious signs. Yesterday I was massively rewarded. I wasn't clever, just others were not appreciating the scale of the risk they were taking by inaction or buying which created the opportunity
You choose to focus on me rather than my message- playing the man not the ball. How is that in your interests? Consider my post and, if objectively and unemotionally you have facts that lead you to a different conclusion then good luck. But justifying continuing to hold a stock like PMG or Carillion by deluding yourself that someone who says something inconvenient, and forces you to consider whether you have made a mistake , is negative will lose you more than you otherwise will.
Every investor will make mistakes , even warren buffet who only recently admitted he made a huge mistake buying IBM. Smart investors continually assess whether they should continue holding, buying more ( even at higher prices) or selling. Indeed many say that the key to good returns isn't timing your purchases but your sales.
Which leads me on to why I post here. As previously said, I am not long or short PMG, but I don't invest without thorough research and often follow businesses that MAY provide an opportunity for some time. PMG is one such company. If for no good reason the SP rose rapidly I would then short, and similarly if the news flow indicates there is genuine reason for expecting significant value to be created in the medium term, and perhaps the SP was lower still, then I may even think it presents an opportunity to buy. But yes, I post just to help those who want to consider all views and hope others do the same and help me be better informed.
Obviously I'm not always right, but until people giqve me any sound argument as to why my opinions are wr
OIL and gas entrepreneur Tom Cross has said the Parkmead Group he runs is eyeing North Sea acquisitions worth up to $100 million (£76m) and exploration acreage off Shetland.
The company is also alert to opportunities in the wider energy sector including renewables.
Tips for family calm
Family life can be chaos, but there are easy things you can do to create a little calm.
Mr Cross underlined his belief in the potential for Parkmead to generate big returns on its investments in the North Sea where he reckons the company has been making good progress amid the crude price plunge.
We totally believe in the UK North Sea and we are pushing ahead, said Mr Cross. He joined Parkmead in 2010 following the £1.9bn sale of the Dana Petroleum business he founded to Korea National Oil Corporation.
After Parkmead announced its production operation returned to profit in the year to 30 June, Mr Cross said the company was in discussions about a range of acquisition opportunities in the North Sea.
It is talking to majors.
Deals under consideration range from small bolt-ons to acquisitions in the $50m to $100m bracket.
Mr Cross said Parkmead is also preparing to be very active in the latest UK licensing round which will close later this month, with a focus on areas it knows well such as West of Shetland.
He noted majors such as BP and Shell are investing heavily off Shetland.
The enthusiasm for the North Sea partly reflects the conviction Parkmead is particularly well placed to benefit from the shake up in the area triggered by the sharp fall in the crude price since 2014.
This has left some firms prepared to sell assets at attractive prices. Parkmead has completed seven acquisitions since Mr Cross took charge. It has no debt.
Mr Cross noted that cuts in activity in the North Sea following the crude price fall have led to big changes in the services market that have helped improve the economics of North Sea developments.
The cost of some services has fallen by around 45 per cent. Some services companies are prepared to invest in projects alongside oil and gas firms.
There is an increased willingness among oil and gas firms to work with each other.
Parkmead is talking to leading, internationally renowned service companies about plans to develop the Perth area fields in the Moray Firth. This could involve developing facilities that fields operated by other firms could use.
The company said: Parkmead has received financial proposals for major parts of the development, reducing the capital expenditure needed to bring the project onstream.
Mr Cross expects it will finalise a field development plan next year.
Parkmead will maintain a focus on the oil and gas business in the areas it knows best off the UK and in Holland.
But Mr Cross said the company is mindful the drive to develop cleaner energy sources is creating demand for renewables. It may make sense to invest in such areas.
Parkmead made a gross profit of £1.2m in the year to June, after losing £4.6m the preceding year.
The company earned all its £4.1m revenue from the sale of gas produced at low cost in Holland. It had £10.4m turnover in the preceding year.
Production was stopped at the Athena oil field in January last year leading to big cost savings for Parkmead. Mr Cross noted the potential to link the field with facilities developed for the Greater Perth Area.
Parkmead lost £4.3m before tax, compared with £6.4m last time.
Blousen Blouse why are you so obsessed with Parkmead if you're not invested? You always post negatively and seem very keen that no-one invests here. Either you're a true altruist who believes what he's saying, you're short or you have some vendetta against the company.
What seems to have been lost in the mud slinging are the asset acquisitions.
Polecat and Marten from 50% to 100%, we are operators.
Sanda North and South from 56% to 100%, we are operators.
Licence P.2209 from 50% to 100%, we are operators
Perth and Dolphin increased to 60.05%.
Balance sheet indicates a cost of £2.7m for those deals.
The post tax loss for the year of £5m was therefore made up in a large part by those transactions.
I won't participate in your spat, I just wanted to add a little balance to the rather one sided onslaught.
I do engage in conversations, but whats the point I have my view and you and the kid have yours.... Parkmead are well past the High Risk stage other than Tom Getting run over crossing a road !
With every one of your posts you betray your ignorance of investing.
PMG is, in investment terms, "high risk" . That's not an opinion but fact.
Don't take my view for it, ask any broker or just google. It is not profitable, has a very small market capitalisation, negligible revenue (circa £4m) a high spread and it's business is ( as your idol Tom has said) reliant on successful development and acquisitions and a strong oil price ( which no one can predict with certainty).
No Professional investment adviser would say PMG is anything other than high risk.
That in itself isn't a bad thing- as long as the chances of the risk paying off are reasonable, and the return if it does are sufficient to justify the high risk. You know my view ( they aren't) and my reasons for it.
Everyone knows your view, but not the reasons for it other than blind faith in Tom, which would be endearing in a different arena to hard nosed investment.
again, you are unable to actually engage in a discussion and just dismiss anyone who profers a different view to your own. Perhaps you should ask yourself whether, if you had a more open mind to others opinions , you would have made a better return from your investments. If so , what makes you so stubborn when it loses you money?
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