I am not one for hyperbole, but the half-year results from Parkmead (PMG:57.5p), a small-cap oil and gas exploration and development company, led by 19 per cent shareholder, Tom Cross, the founder and former chief executive of Dana Petroleum, until its sale to the Korea National Oil Corporation in 2010, blew me away. Parkmead produces gas from a portfolio of four fields across the Netherlands, and holds oil and gas interests spanning 30 exploration and production blocks in the North Sea, several of which could prove transformational for shareholders this year.
The company holds a 7.5 per cent stake in the Diever West gasfield in the Netherlands, which came on stream in November 2015, and averaged the equivalent of 5,340 barrels of oil equivalent per day (boepd) in its first six months. It has been exceeding expectations ever since, so much so that output in the latest six-month period surged by 54 per cent to 8,293 bopd. Moreover, dynamic reservoir monitoring suggests that it has 18.6m barrels of oil equivalent of gross gas-in-place, or 108bn cubic feet. That’s more than 2.5 times the original estimate.
In addition to Diever West, Parkmead's low-cost onshore gas portfolio includes three other fields in the Netherlands, and the four fields in total have an average operating cost of just $12.3 (£9.50) per barrel of oil equivalent. So, with output surging, half-year gross profit of £3.84m on revenue of £5.3m almost matched that of the whole of the previous financial year, and produced a post-tax profit of £2.2m.