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.
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.
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