Parkmead has engaged a leading energy corporate finance advisory firm, Gneiss Energy, to manage the process to find a suitable partner (or partners) in relation to the Company's 100% interest in the Greater Perth Area ("GPA") development project.

The core Perth field holds approximately 55 million barrels of recoverable oil equivalent ("MMBoe") on a most likely, P50 basis. The wider GPA project has the potential to deliver between 75 and 130 MMBoe on a P50 basis and could provide material value-adding volumes to surrounding infrastructure through field life extension.

GPA is one of the North Sea's largest undeveloped oil projects and has been fully appraised, so no further appraisal drilling is needed. The constituent fields have been flow tested at rates of up to 6,000 barrels of oil per day and have produced good quality, light crude oil of between 37° and 32° API.

Parkmead has had recent dialogue on commercial terms with the nearby Scott field partnership for the potential tie-back of the GPA project to Scott. Scott lies just 6 miles southeast of the GPA project and a tie-back could yield a number of mutually beneficial advantages for both the Scott partnership and the Perth owners.

Transportation studies for the base case GPA development concept have been completed. These have confirmed there are no technical issues that would prevent the transportation and processing of fluids from the Perth producing wells, all the way through the offshore infrastructure to the onshore facilities. Parkmead continues to engage with leading supply chain companies in order to maximise the production of oil, and is in the process of initiating a net zero study to meet regulatory requirements.

Following the excellent progress to date, Parkmead is now in a position to launch this farm-out process to seek an industry partner (or partners) for the GPA Project. 

The Board of Parkmead believes that projects like GPA play an important role in underpinning the supply of energy that the UK needs during its transition to net zero. As a fuel that is primarily used for transportation, manufacturing and petrochemicals, oil will continue to feature as a vital commodity in the UK over the coming years. Therefore, it is very important that the UK continues to develop projects such as GPA in order to reduce the UK's reliance on less-regulated, more carbon-intensive imports. Parkmead believes that production of hydrocarbons from GPA can be done in a sustainable fashion in alignment with the UK Government's most recent targets on carbon emissions.

The oil and gas investment environment is improving significantly

Parkmead recognises that there have been significant global changes which have improved the investment environment for projects such as GPA. Russia's invasion of Ukraine has increased the UK Government's focus on energy security and confirmed the importance of having sizeable and robust UK domestic energy production. The rise in international oil and gas prices has also strengthened investment appetite through enhanced economics. Parkmead has also seen a positive investment sentiment emanating from the introduction of the new UK Energy Profits Levy, whereby the associated investment allowance of up to 91% has created a powerful incentive for major producers to invest in new UK North Sea developments.

Tom Cross, Executive Chairman, commented:
"Parkmead has formally begun a farm-out of the GPA project following the extensive technical and commercial work our team has successfully completed to date. We have secured 100% of the GPA project and delivered a commercial export solution, so now is the right time to drive the project forward with a complementary industry partner. GPA is one of the North Sea's largest undeveloped oil projects and its development would serve to increase the UK's energy security once onstream."

MORAY FIRTH

Parkmead holds a significant position in the prolific UK Moray Firth, an area which contains major North Sea oil fields such as Piper, Claymore and Tartan. This position has been established both through licensing round success and strategic acquisitions.

The Parkmead-operated Perth and Dolphin fields lie at the core of the Greater Perth Area (“GPA”) oil hub project, one of the largest undeveloped oil projects in the North Sea. Perth and Dolphin (Parkmead 100%) are two substantial Upper Jurassic Claymore sandstone accumulations that have tested 32-38 API oil at production rates of up to 6,000 bopd per well.

The Group made a number of important growth steps during 2017 in relation to the GPA project. An invitation to tender was announced to the service provider market, covering the pre-FEED, FEED and subsequent development phases of the project. Parkmead was pleased to report that 13 alliance submissions were received, comprising 35 companies, across all project components of drilling, subsea construction and export route options. After evaluating the proposals, Parkmead is holding onward discussions with a number of leading, internationally renowned service companies. 

In 2018, Parkmead signed an agreement with Nexen Petroleum, a subsidiary of the China National Offshore Oil Corporation (CNOOC), to conduct a detailed engineering study in relation to the potential subsea tie-back of the Greater Perth Area project to the Nexen operated Scott platform and associated facilities in the UK Central North Sea. The Scott facilities lie just some 10km southeast of the GPA project.

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