25 May 2012

Parkmead expands in North Sea

15/11/2011 Robert Tyerman

Ex-Dana Petroleum boss Tom Cross's Parkmead Group (PMG) is buying into the UK North Sea's Platypus gas field and Possum gas prospect.

Cross, who sold Dana to the Korean National Oil Corporation for £1.7 billion last year, is turning AIM-quoted Parkmead from an investment and advice concern into a new oil and gas company and has lent £8 million to the company, only part of which will be needed to cover the its purchase from Exxon Mobil of 15 per cent of the North Sea Blocks containing Platypus and Possum.

The remainder of the two-year loan, which carries an interest rate 2.5 per cent above London Interbank Rate, will go on working capital and 'future corporate purposes'. Cross, who is executive chairman of Parkmead and holds a near-28 per cent stake, knows Platypus and Possum 'intimately' and declares he and the ex-Dana team he has recruited 'believe they contain the potential for significant upside.'

It was Dana which last year discovered the Platypus field, which lies near the existing Sole and Babbage fields and contains an estimated potential of up to 180 billion cubic feet of gas, while the adjacent Possum field holds an estimated 100 billiion cubic feet of gas. Dana, as operator, has a 45 per cent stake and has secured a rig to drill a well in the Platypus/Possum complex, which should start work in the first quarter of next year.

Fans hope Cross is laying the groundwork for a repeat of his Dana success. Originally floated as a different entity at 140p in 2000 and recommended by Growth Company Investor last December at 13.5p after Cross brought in his team, Parkmead shares now trade at 16p, valuing the company at £98 million and look potentially rewarding in the medium term.

Tags: AIM market, Dana Petroleum, ExxonMobil, Tom Cross, UK North Sea

Sector: Oil & Gas Producers

Companies: Parkmead Group (The)

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