THE Parkmead Group oil and gas business run by Tom Cross has said it has made a significant find in the Netherlands and highlighted the potential of its acreage in the North Sea.
Aberdeen-based Parkmead said a well onshore the Netherlands had found a bigger than expected column of gas, which it hopes could be brought into production fairly quickly.
"This new field provides an excellent, additional near-term production opportunity for Parkmead," said Mr Cross, who took charge at the company after growing Dana Petroleum into a £1.9 billion business.
Mr Cross noted Parkmead has also started preparatory work on what he called the exciting Skerryvore prospect off Scotland, which it plans to drill next year.
"Skerryvore has the potential to add major value to Parkmead's growing asset base," said Mr Cross.
With Brendan Long at house broker Charles Stanley applauding Parkmead for maintaining a 100% exploration success rate with the Diever-2 well in the Netherlands, the find will boost Mr Cross's hopes the company could match the achievements of Dana.
Mr Cross netted around £57m from the sale of his holding in Dana when the company was bought by Korea National Oil Corporation in 2010.
The 21 per cent stake held by Mr Cross and affiliates in Parkmead was worth around £40m at last night's closing price.
The update suggests Mr Cross is making progress with the kind of scavenger strategy he followed at Dana.
This involves investing in assets that bigger fish do not fancy.
Parkmead made the Diever discovery on acreage that it acquired from Dyas of Holland in 2012 for an initial 4.5m euros.
The acreage includes producing assets. The Dievers discovery lies close to existing production facilities, which Parkmead believes it could be tied into.
Mr Long said the well results suggested the find could contain 25 billion cubic feet gas compared with pre-drill estimates of 17 BCF.
He thinks the Skerryvore prospect could produce 59 million barrels oil.
Parkmead's announcement that it has started a site survey on Skerryvore may increase confidence the company can identify and mature exploration opportunities others have missed.
Skerryvore is on a licence that Parkmead was awarded in the 27th UK round in 2012.
The company said then it hoped to target the sizeable Skerryvore prospect within four years.
It was also awarded licences in the frontier Rockall trough area west of Scotland and in the West of Shetland region in the 27th round. While the North Sea has been attracting interest from firms from around the world in recent years amid strong demand for energy, Mr Cross has managed to use his deal making skills to help Parkmead carve out a significant position in the area.
Analysts at Numis Securities said Parkmead's record as a net acquirer of United Kingdom Continental Shelf assets at discount prices adds potential upside for investors.
The company has bought assets from giants such as ExxonMobil and smaller players like Sorgenia.
Mr Cross made his boldest move to date at Parkmead in July last year when he led the takeover of North Sea-focused Lochard Energy for shares in the firm worth £14.7m when they were issued.
Parkmead Group made £3.1m pre-tax profit in the six months to December.
It lost £2.8m in the same period of the previous year.
Shares in Parkmead closed up 5p at 220p, giving it a market capitalisation of around £193m.
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