As expected, Parkmead Group (PMG) swung into the red at the half-year mark. The North Sea driller booked a net earnings loss of £14.9m, against a profit of £2.6m at the 2013 interim. The main culprit, of course, was the steep fall in crude oil prices, which precipitated a £12.9m non-cash impairment relating to the Athena field. Meanwhile, sales costs nearly doubled from last year, reflecting Parkmead’s increased working interest in Athena, which rose from 10 per cent to 30 per cent last year.
We shouldn’t read too much into the reported figures. The group is still in its development phase and is continuing to build its offshore portfolio in the UK and Netherlands. Awards from the 28th North Sea licensing round brought the group's total number of blocks to 61 - the bulk of which are operated by Parkmead. Three of the new licence awards significantly enhanced the group's footprint in the area containing its pre-existing PDL oil hub development project.
During the period, Parkmead identified a new onshore gas field at Diever West in the Netherlands. A daily flow-rate equivalent to 5,000 barrels of oil equivalent was achieved at the Diever 2 well, which is to be tied into existing production facilities in the fourth quarter. It’s now expected that gas production from the Netherlands will triple by the end of this year.
Westhouse gives a risked NAV of 239p a share.
| PARKMEAD GROUP (PMG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 113p | MARKET VALUE: | £99m | |
| TOUCH: | 113-118p | 12-MONTH HIGH: | 251p | LOW: 101p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 94p* | NET CASH: | £34.7m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 9.9 | 3.1 | 3.88 | nil |
| 2014 | 10.1 | -17.0 | -19.59 | nil |
| % change | +2 | - | - | - |
