LONDON (ShareCast) - (Sharecast News) - Parkmead reported a 22% improvement in revenue in its preliminary results on Friday, to £14.77m.
The AIM-traded firm said gross profit saw substantial growth, reaching £12.5m compared to £10.8m in 2022, as it maintained a solid gross margin of 85% due to low operating costs.

It said net cash flow from operations surged 44% to £6.5m while operating profit before exploration write-offs and impairments reached £10.6m, up from £6.9m a year earlier, or 9.7p per share.

However, tax of £4.7m and Dutch windfall tax of £2.4m impacted its overall financial picture.

Parkmead's cash and cash equivalents as of 30 June totalled £11.6m, down from £23.3m at the end of the prior year due to decommissioning spending of £17m.

The company recorded non-cash impairment charges of £46m, primarily related to relinquishing the Core Perth and Athena licences on the UK Continental Shelf (UKCS).

Despite the challenges, Parkmead said it maintained a strong balance sheet with total assets of £28.6m.

In the Netherlands exploration and production (E&P) business segment, Parkmead achieved drilling success and an excellent operating margin during the year.

It said its low-cost onshore gas portfolio in the Netherlands was produced from four separate gas fields, generating strong cash flows with an average netback of $150 per barrel of oil equivalent (boe).

The average gross production across the group's Netherlands assets was 17.5 million cubic feet per day (MMscfd) or approximately 3,015 boe daily.

It said the LDS drilling campaign concluded safely, under budget and ahead of schedule in early 2023, contributing to higher gas and condensate production than expected.

In the UK, the Skerryvore exploration well project remained on track, with Parkmead, the operator, having a significant 50% interest in the project.

The planned well would target exploration prospects at Mey and Chalk levels with significant estimated reserves.

It said the subsurface team was optimistic about geological success at the Mey site, with the proximity to existing infrastructure allowing for potential accelerated development.

Parkmead's UK renewable energy portfolio also performed well, with Kempstone Hill delivering record revenue of £0.7m.

Electricity production reached 2,446 MWh, while the company actively explored wind and solar acquisitions to enhance cash flow.

"We have achieved increased revenues and cash flow, whilst ensuring the company is forging ahead with new growth opportunities," said executive chairman Tom Cross.

"The Netherlands assets have continued to deliver consistent and efficient gas production, with exciting additional prospectivity identified across our Dutch portfolio.

"In particular, the maturing exploration targets on the Drenthe VI licence confirm the high quality of these assets.

"The Papekop development has the potential to add significant revenues to Parkmead from 2027 onwards."

Cross said Parkmead had achieved its first full year of revenue from the Kempstone Hill Wind Farm.

"This asset complements the group's low-cost onshore gas operations in the Netherlands and strengthens our balance sheet position.

"We will build upon the success of these two business areas, natural gas and renewables, through organic and inorganic growth as the company transitions to being a clean energy producer.

"In addition, we remain committed to maximising the opportunities within the company's oil and gas portfolio on our pathway towards energy transition."

Tom Cross added that Parkmead was "excited" by the progress made on Skerryvore towards drilling.

"There is major upside potential, given Parkmead's high equity position in a number of its prospects and the sizable tax losses that could be deployed on the company's projects in due course.

"Parkmead continues to maintain a strong balance sheet, which aids the pursuit of value-adding acquisitions.

"Our team is working hard on the near-term opportunities that lie within our existing portfolio, and is focused on the substantial value-creation that could be achieved for shareholders."

At 1229 GMT, shares in the Parkmead Group were up 25.47% at 17.88p.

Reporting by Josh White for Sharecast.com.

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