The Parkmead Group plc has agreed to sell its offshore UK and onshore Netherlands exploration and production interests for £14 million, with up to £120m in contingent payments, to Serica Energy (UK) Ltd.
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The sale includes the company’s 50% working interest in licences P2400, containing the Skerryvore prospect, and P2634, containing the Fynn Beauly oil discovery.
Serica currently owns 20% of P2400 and on completion of the acquisition will hold 70% and become the operator.
Parkmead said its decision to sell was based on the outlook for the UK North Sea licences and potential capital needed for appraisal and development.
“The offshore sector is facing continuing challenges in the form of the current political environment towards UK oil and gas, and the focus of the UK Government on its net zero strategy.
“In this context, Parkmead believes that the opportunity to progress these UK North Sea oil licences would be best served within the portfolio of a larger, North Sea focused company, enabling Parkmead to apply its expertise and the company’s resources on growing its Netherlands gas assets and its projects in renewable energies.”
The firm payment comprises an initial £5m on completion of the sale and three further deferred amounts totalling £9m, payable in instalments of £2m, £3.1m and £3.9m each February until 2027.
Following regulatory approval for any field development plan for licences P2400 and P2634 Parkmead will receive a further two contingent payments of up to £30m and £90m, respectively.
The sale is expected to complete during the first half of 2025.
The group retains its Netherlands asset portfolio and 100% of its revenue producing assets, comprising its onshore Dutch natural gas fields and its UK wind farm.
Parkmead plans to use the funds to grow its core Netherlands gas and UK renewable assets.
Executive chairman Tom Cross added: “Through the sale of these UK offshore oil licences we have no further capital investment requirements, whilst retaining a very attractive share of the upside should any developments at Skerryvore or Fynn Beauly proceed.
“The addition of the near-term, firm £14 million cash consideration, together with Parkmead’s existing cash, means the group is well-funded to pursue the next phase of its growth plans in natural gas, renewable energies and international E&P.”