Parkmead signed an agreement with EWE VERTRIEB GmbH (“EWE”) to acquire a 20 per cent. interest in UK production licence P.1293 (Block 14/18b ALL) which contains the Athena oil field. Completion of the acquisition is subject to the usual partner and regulatory approvals.
Following the acquisition of Lochard Energy Group PLC, completed in July 2013, Parkmead already holds a 10 per cent. interest in the producing Athena oil field. This acquisition will therefore treble Parkmead’s stake to 30 per cent.
Production at Athena averaged approximately 9,000 barrels of oil per day in Q2 2013. The field is currently producing at a reduced rate of approximately 7,500 barrels of oil per day, following some pump operational issues. There is a work programme planned for 2014 to increase production back up to normal levels. Parkmead’s increased interest in the field will provide the Company with significant growth in production revenues and operating cash flows.
The total consideration for the interest is US$11.2 million, which will be satisfied through $8.0 million in cash and $3.2 million in new Parkmead Shares (the number of shares issued will be calculated based on the closing price of a Parkmead Share on the business day immediately prior to completion).
The acquisition of the additional interest in the Athena field fits perfectly into Parkmead’s strategy to become a key E&P player in the North Sea. The Group has been awarded a total of 30 blocks spanning eight licences across the UK, through the 27th Licensing Round, including high potential areas West of Scotland and West of Shetlands. In addition to increasing its stake in Athena, the Group continues to build its presence in the Central and Southern North Sea. Parkmead operates the Greater Perth oil area, and has built extensive acreage with a number of exploration prospects to add to the Platypus gas field and the recent gas discovery at Pharos.
Tom Cross, Executive Chairman of Parkmead, commented, “This is Parkmead’s most important deal to date. Increasing our oil production three-fold from the Athena field will deliver major growth in the Company’s revenue and cash flow.”
Press Release, December 30, 2013