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Parkmead Group (The) PLC Preliminary Results Statement 2020

20/11/2020 7:00am

UK Regulatory (RNS & others)

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RNS Number : 9928F

Parkmead Group (The) PLC

20 November 2020

20 November 2020

The Parkmead Group plc

("Parkmead", "the Company" or "the Group")

Preliminary Results for the year ended 30 June 2020

Parkmead, the UK and Netherlands focused independent energy group, with four business areas, is pleased to report its preliminary results for the year ended 30 June 2020.


Strong financial position and robust producing assets, despite low gas price environment

-- Well capitalised, with cash balances of GBP25.7 million (US$33.4 million) as at 30 June 2020

-- Total asset base increased by 9% to GBP89.8 million at 30 June 2020 (2019: GBP82.3 million)

   --       Net assets increased to GBP71.3 million at 30 June 2020 (2019: GBP68.3 million) 

-- Revenue for the period was GBP4.1 million (2019: GBP8.3 million), reflecting the record-low gas prices seen during the year

-- Gross profit achieved of GBP1.3 million (2019: GBP5.7 million), showing the robustness of Parkmead's gas assets

   --       Net profit before tax and non-cash impairment charges was GBP0.8 million 

-- Gas prices have fallen from highs of approximately EUR 25.7/MWh in October 2018 to lows not seen in over a decade to around EUR 5.0/MWh in June 2020 due to the oversupply of Liquefied Natural Gas (LNG) into the European market and the unprecedented effect of COVID-19

   --       Gas prices have since rebounded strongly to approximately EUR 14.0/MWh in November 2020 

-- Parkmead's Netherlands assets remain very low cost to operate, and were uninterrupted by the lockdown restrictions introduced by the Dutch Government in March

-- Netherlands gas production, plus benchmarking & economics consultancy, provides positive operating cash flow to Parkmead

   --       Parkmead maintains strict financial discipline with very low operating costs 

Significant wind farm potential; high-grading of renewables portfolio underway

-- In September 2019, the Company acquired Pitreadie Farm Limited ("Pitreadie") as part of its expansion into renewable energy

-- Studies being conducted on the Group's acquired onshore land for the potential development of a large

wind farm

-- One of the large areas of land acquired by Parkmead lies adjacent to the Mid Hill Wind Farm which encompasses 33 Siemens wind turbines with a generating capacity of around 75MW

-- High-grading of renewables portfolio underway with expected divestments of non-core acreage

-- Renewable energy opportunities accessed through strategic acquisition of Pitreadie, where a gain on purchase was recorded of GBP0.36 million

-- Parkmead's early commitment to building a balanced energy business through its focus on gas, widely seen as the primary transition fuel, pre-empted the recent energy transition acceleration

-- Revenue-generating renewable energy opportunities continue to be analysed by Parkmead as it seeks to build out its renewable energy portfolio

Excellent progress on Skerryvore, GPA and Platypus oil and gas projects

-- New seismic purchased in Q3 2019 covering the Skerryvore prospect and surrounding area, which is being reprocessed throughout 2020 to mature the collection of prospects

-- Early-stage reprocessing work showing positive improvements in seismic image quality, at the Mey Sandstone reservoir level in particular

-- Skerryvore's main prospects are three stacked targets, at Mey and Chalk level, which together could contain 157 million barrels of oil equivalent ("MMBoe")

-- Parkmead is in commercial discussions with the Scott field partnership, including CNOOC, in order to agree terms for a tie-back of the Greater Perth Area ("GPA") to the Scott facilities

-- Parkmead is also in discussions with other operators in the vicinity where new opportunities have arisen during the year

-- Infrastructure studies completed in 2020 have confirmed that there are no technical hurdles to produce Perth oil from the wells all the way through to the onshore facilities

-- Field Development Plan draft and Environmental Statement submitted to the OGA and OPRED, respectively, for the development of the Platypus gas project in the UK Southern North Sea

-- Selected development concept is a subsea tie-back to the Cleeton platform and commercial discussions are ongoing

-- Parkmead and the Platypus partners have obtained an extension to the Platypus licence to take account of COVID-19 delays

Multiple new opportunities identified across Netherlands portfolio

-- Gross production at the Group's Netherlands assets for the financial year averaged 38.3 million cubic feet per day ("MMscfd"), which equates to approximately 6,608 barrels of oil equivalent per day ("boepd")

-- Low-cost onshore gas portfolio in the Netherlands produces from four separate gas fields with an average field operating cost of just US$9.9 per barrel of oil equivalent, generating strong cash flows

-- The Brakel field was brought back to full production during the period following the completion of a work programme

-- Concept selection planning at the Papekop oil and gas discovery has begun, a proven field with 24.2 million barrels ("MMBbl") of oil-in-place and 39.4 billion cubic feet ("Bcf") of gas-in-place

-- Multiple further opportunities exist around Diever West, such as Boergrup and De Bree, both of which contain stacked targets with similar characteristics to Diever West

   --       Boergrup well permitting and planning is underway 

-- A new seismic reprocessing project began in Q4 2019, which will help define and high-grade the extensive

prospects around Diever West

-- Dynamic reservoir modelling suggests Diever West held initial gas-in-place of approximately 108 Bcf, more

than double the post-drill static volume estimate of 41 Bcf

Substantial oil and gas reserves and resources

-- 2P reserves of 45.7 million barrels of oil equivalent ("MMBoe") as at 30 September 2020 (46.0 MMBoe as at 30 September 2019)

Well positioned for further acquisitions and opportunities

   --       Eight acquisitions, at both asset and corporate level, have been completed to date 
   --       Parkmead actively evaluating further acquisition opportunities in renewables, gas and oil 

Parkmead's Executive Chairman, Tom Cross, commented:

"I am pleased to report on an important year of progress for Parkmead. Despite revenues being impacted by the low gas price environment, Parkmead has delivered growth in its asset base whilst retaining financial strength. This creates a strong foundation from which to build and Parkmead remains robust in the context of broader global uncertainty brought about by the COVID-19 pandemic.

Following our first strategic acquisition in the renewable energy arena, we continue to evaluate further opportunities. Renewable energy is directly in line with Parkmead's business plan, broadening and enhancing the Group's energy asset base. Potential has been identified for a large wind farm project on a part of the Group's onshore acreage.

Further advances have been made within the Greater Perth Area project. The Group is in discussions with a number of leading, international service companies and oil companies in relation to driving forward the GPA project.

The team at Parkmead continues to work intensively to evaluate and execute further value-adding opportunities which could provide additional upside for the Group.

Parkmead is well positioned for the future. We have excellent UK and Netherlands regional expertise, significant cash resources, and a growing portfolio of high-quality assets. The Group will continue to build upon the inherent value in its existing interests with a balanced, acquisition-led, growth strategy to secure opportunities that maximise future value for our shareholders."

For enquiries please contact:

  The Parkmead Group plc                         +44 (0) 1224 622200 
  Tom Cross (Executive Chairman) 
  Ryan Stroulger (Chief Financial Officer) 
  finnCap Ltd (NOMAD and Broker to Parkmead)     +44 (0) 20 7220 0500 
  Marc Milmo / Emily Watts / Matthew 
   Radley - Corporate Finance 
  Andrew Burdis / Tim Harper - ECM 


2020 has been an important year of progress for Parkmead, despite the unprecedented challenges resulting from the COVID-19 pandemic. Parkmead has shown its resilience throughout this period because of the strong foundations built in preceding years, which has positioned the Group extremely well to continue its growth.

The Company completed its maiden renewable energy acquisition during the year, demonstrating its early commitment to building a balanced energy business and entering this exciting area of growth.

Parkmead has continued to show its strict financial discipline whilst intensively evaluating a number of value-adding acquisition opportunities that we have identified through the current economic environment.

Building a balanced portfolio

In September 2019, Parkmead completed a significant renewable energy transaction through the all-share acquisition of Pitreadie. This acquisition was an important milestone for the Group as we look to build a balanced energy portfolio, ensuring Parkmead is well positioned to withstand future commodity price fluctuations as well as investing in an onshore renewables sector with huge growth opportunities. The Board of Parkmead believes that the growth of the renewable energy sector will continue to accelerate as the UK focuses its attention on meeting its net-zero emissions target by 2050.

The portfolio of land now owned by Parkmead, through the acquisition of Pitreadie, has substantial renewable energy potential in the form of wind, solar and biomass opportunities.

Our team has already identified substantial wind energy potential at one location, some 15 miles west of Aberdeen. The site has excellent average wind speeds of between 7-10 m/s. This acreage lies adjacent to the Mid Hill Wind Farm which contains 33 Siemens wind turbines with a generating capacity of around 75 megawatts (MW).

Parkmead is advancing its renewable energy opportunities through its in-house expertise coupled with a carefully selected consultancy team. This will ensure we maximise the upside value from this new business area.

The Group has also begun evaluating the land within its renewable energy business and it is expected that land with low renewable energy potential will be divested.

Strong production from low-cost operations

In the Netherlands, we are working closely with our joint venture partners to maximise the potential of our resources across all licences. There are significant low-risk prospects within our acreage, particularly on the Drenthe VI licence where the Boergrup, Leemdijk and De Bree structures are being evaluated. Well planning and government permitting is now underway on the potential Boergrup well, with high level well planning also underway on Leemdijk and De Bree. All of these prospects can be drilled from the Diever wellsite, reducing the permitting requirements and future infrastructure tie-in costs. Seismic reprocessing is currently being undertaken across the Drenthe VI licence to further refine and de-risk the remaining prospectivity on the block. At Papekop, subsurface reservoir static and dynamic modelling work is nearing completion, with the results feeding into the ongoing concept select planning.

Our Netherlands gas production has remained strong with average gross production during FY 2020 of 38.3 MMscfd, approximately 6,608 boepd. The average operating cost during this year was US$9.9 per barrel of oil equivalent. Given the low commodity price environment we are currently experiencing, this profitable gas production provides important and valuable cash flow to the Group.

Parkmead's Netherlands production was uninterrupted by the lockdown restrictions introduced by the Dutch Government in March.

Major progress on three UKCS E&P projects

The Platypus gas project has seen key milestones reached in the past year. A Field Development Plan draft and Environmental Statement was submitted in October 2019 to the OGA and OPRED, respectively, for the development of the project in the UK Southern North Sea.

Mid case recoverable reserves from Platypus are estimated at 106 Bcf, with peak production of 47 MMscfd. The anticipated producing life of the field is approximately 20 years. Platypus East (previously named Possum) provides a material upside opportunity for the project, potentially adding another 50 Bcf of recoverable reserves.

The development option selected for the Platypus field was reached following an extensive concept selection process. This considered technical feasibility, project execution schedule and commercial viability, in addition to environmental, health and safety issues.

The selected development concept will consist of two wells connected to a subsea manifold, with gas export to the Cleeton platform via a 23km pipeline. Produced fluids will arrive at the Cleeton facilities before being routed directly to the Dimlington Terminal for separation and processing. Front End Engineering Design studies associated with the Cleeton and Dimlington system continue to progress, in partnership with Perenco.

Parkmead and the Platypus partners have obtained an extension of the Platypus licence from the OGA to take account of COVID-19 delays.

The Greater Perth Area development continues to form a key part of our balanced portfolio of assets. This year has seen the completion of transportation studies for our base case development concept. The studies have confirmed there are no technical hurdles associated with the transportation and processing of fluids from the Perth producing wells all the way through the infrastructure to the onshore facilities. Parkmead continues to engage with leading, internationally-renowned supply chain companies in order to optimise the commercial solution.

Parkmead is in commercial discussions with the Scott field partnership, led by China National Offshore Oil Corporation (CNOOC) International, in order to explore terms for a tie-back of the GPA oil hub project to the Scott facilities. Scott lies just 10km southeast of the GPA project and a tie-back could yield a number of mutually beneficial advantages for both the Scott partnership and Parkmead. A tie-back to Scott is just one path to potentially unlock the substantial value of the GPA project. Parkmead continues to engage with leading, internationally-renowned supply chain and service companies as it seeks to optimise the commercial solution and maximise shareholder value from the GPA project.

Parkmead is also in discussions with other operators in the vicinity where new opportunities have arisen during the year.

Skerryvore has also seen progression this year with the results of early-stage reprocessing work showing positive improvements in seismic image quality, at the Mey Sandstone reservoir level in particular. Three stacked prospects are targeted at Skerryvore at Mey, Ekofisk and Tor levels, which combined have the potential to contain 157 million barrels of recoverable oil equivalent on a P50 basis. A discovery at Skerryvore could add considerable upside to Parkmead. Additional Jurassic and Triassic prospectivity is identified, similar to the recent Isabella discovery to the north, operated by Total.

32(nd) UKCS licensing round success

In the most recent UK 32(nd) licensing round awards, Parkmead was offered four offshore blocks and part blocks spanning three new licences.

The first of these provisional licence awards covers Blocks 14/20g & 15/16g (Parkmead 50% and operator) situated in the Central North Sea, adjacent to Parkmead's extensive Greater Perth Area ("GPA"). These blocks contain two undeveloped oil discoveries, Fynn Beauly and Fynn Andrew, as well as an oil prospect in the Piper Formation.

Fynn Beauly is a very large heavy oil discovery which extends across a number of blocks. The entire discovery is estimated to contain oil-in-place of between 602 and 1343 million barrels. Blocks 14/20g & 15/16g contain a section of the discovery to the south, with oil-in-place of between 77 and 202 million barrels. The second discovery, Fynn Andrew, is wholly contained on the offered blocks and holds 50 million barrels of oil-in-place on a P50 basis.

The addition of these blocks to Parkmead's portfolio would add 34.4 million barrels of 2C resources to the Group.

Two further licences have been offered to Parkmead as part of the 32nd Round. Block 14/20c (Parkmead 100%) is located in the Central North Sea and contains extensions to the Lowlander oil field and the Fynn Beauly oil discovery. Block 42/28g (Parkmead 100%) is situated in the Southern North Sea near the Tolmount gas discovery.

Increasing our team's capabilities

In line with the Group's strategy to deliver maximum value from its high-quality asset base, the appointment of Colin Maclaren to the Board was made in May 2020.

Colin brings with him 37 years of extensive legal and commercial experience which will be valuable to the Group as we expand our onshore renewables portfolio.


The Group's revenue for the year to 30 June 2020 was GBP4.1m (2019: GBP8.3m), generating a gross profit of GBP1.3m (2019: GBP5.7m). This gross profit shows the resilience and high-quality nature of Parkmead's gas operations in the Netherlands, despite record low European gas prices and the unparalleled conditions this year caused by the COVID-19 pandemic.

Detailed technical work undertaken across the wider Parkmead portfolio has allowed the Group to release non-core acreage, such as P.2218, considerably reducing licence costs going forward. The release of this acreage led to a non-cash impairment charge of GBP1.6m (2019: GBP0.2) resulting in a small loss for the period of GBP0.5m (2019: GBP2.4 profit). A net profit before tax and non-cash impairment charges was recorded of GBP0.8 million.

Administrative expenses were GBP0.3m (2019: GBP0.4m), which included a non-cash credit in respect of share based payments of GBP1.4m (2019: GBP1.1m credit). Underlying administrative expenses, excluding share based payments, were GBP1.7m (2018: GBP1.5m).

Parkmead's total assets at 30 June 2020 increased to GBP89.8m (2019: GBP82.3m). Interest bearing loans receivable were GBP2.9m (2019: GBP2.9m). Cash and cash equivalents at year end were GBP25.7m (2019: GBP30.7m). The Group's net asset value rose to GBP71.3m (2019: GBP68.3m). Parkmead is therefore well positioned to withstand the current market conditions and views the macro environment as an opportunity to capitalise on gas, oil and wider energy opportunities. This positive position is a direct result of proactive portfolio management and a strong focus on capital discipline throughout the year.

Due to Parkmead's ongoing growth opportunities and associated investment programme, the Board is not recommending the payment of a dividend in 2020 (2019: GBPnil).


The outlook for Parkmead is bright, as our experienced team continues to analyse a number of high-growth opportunities to create value for shareholders and strengthen the Group going forward. As we look towards 2021, our strong balance sheet and healthy cash position provide Parkmead with the ability to capitalise on such opportunities.

Tom Cross

Executive Chairman

19 November 2020

This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.


1. Tim Coxe, Parkmead Group's Managing Director, North Sea, who holds a First-Class Master's Degree in Engineering and over 20 years of experience in the oil and gas industry. Tim is accountable for the company's HSE, Subsurface, Drilling, Production Operations and Development Project functions and has approved the technical information contained in this announcement. Reserves and contingent resource estimates have been produced by Parkmead's subsurface team and are stated as of 30 September 2020. Parkmead's evaluation of reserves and resources was prepared in accordance with the 2007 Petroleum Resources Management System prepared by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers and reviewed and jointly sponsored by the World Petroleum Council, the American Association of Petroleum Geologists and the Society of Petroleum Evaluation Engineers.

Glossary of key terms

  Oil in place                   The total quantity of petroleum that is estimated to exist originally in naturally 
  Contingent Resources           Those quantities of petroleum estimated, as of a given date, to be potentially 
                                 from known accumulations by application of development projects but which are not 
                                 considered to be commercially recoverable due to one or more contingencies. 
                                 Contingent Resources 
                                 are a class of discovered recoverable resources 
  Recoverable resources          Those quantities of hydrocarbons that are estimated to be producible from discovered 
                                 or undiscovered 
  Proved and Probable or "2P"    Those additional Reserves which analysis of geoscience and engineering data indicate 
                                 are less 
                                 likely to be recovered than Proved Reserves but more certain to be recovered than 
                                 Reserves. It is equally likely that actual remaining quantities recovered will be 
                                 than or less than the sum of the estimated Proved plus Probable Reserves (2P). In 
                                 this context, 
                                 when probabilistic methods are used, there should be at least a 50 per cent. 
                                 probability that 
                                 the actual quantities recovered will equal or exceed the 2P estimate 
  Reserves                       Reserves are those quantities of petroleum anticipated to be commercially recoverable 
                                 by application 
                                 of development projects to known accumulations from a given date forward under 
                                 defined conditions. 
                                 Reserves must further satisfy four criteria: they must be discovered, recoverable, 
                                 and remaining (as of the evaluation date) based on the development project(s) 
                                 applied. Reserves 
                                 are further categorized in accordance with the level of certainty associated with the 
                                 and may be sub-classified based on project maturity and/or characterized by 
                                 development and 
                                 production status 
  P50                            Reflects a volume estimate that, assuming the accumulation is developed, there is a 
                                 50% probability 
                                 that the quantities actually recovered will equal or exceed the estimate. This is 
                                 a median or best case estimate 
 Group statement of profit or loss 
 for the year ended 30 June 2020 
                                              Note      2020      2019 
                                                     GBP'000   GBP'000 
 Revenue                                               4,080     8,269 
 Cost of sales                                       (2,806)   (2,524) 
 Gross profit                                          1,274     5,745 
 Exploration and evaluation expenses                 (1,556)     (171) 
 Gain on bargain purchase                                362         - 
 Administrative expenses                       2       (257)     (436) 
 Operating profit / (loss)                             (177)     5,138 
 Finance income                                          199       209 
 Finance costs                                         (814)     (546) 
 Profit / (loss) before taxation                       (792)     4,801 
 Taxation                                                310   (2,385) 
-------------------------------------------  -----  --------  -------- 
 Profit / (loss) for the year attributable 
  to the equity holders of the Parent                  (482)     2,416 
-------------------------------------------  -----  --------  -------- 
 Earnings / (loss) per share (pence) 
 Basic                                         3      (0.45)      2.44 
 Diluted                                       3      (0.45)      2.43 
 Group statement of profit or loss and other comprehensive income 
 for the year ended 30 June 2020 
                                                                  2020         2019 
                                                               GBP'000      GBP'000 
 Profit / (loss) for 
  the year                                                       (482)        2,416 
 Items that may be reclassified 
  subsequently to profit 
  or loss 
 Changes in financial 
  assets at fair value 
  through other comprehensive 
  income                                                             -          651 
--------------------------------------  ------------------------------  ----------- 
                                                                     -          651 
 Income tax relating 
  to components of other 
  comprehensive income                                               -            - 
--------------------------------  ----  ------------------------------  ----------- 
 Other comprehensive 
  income for the year, 
  net of tax                                                         -          651 
--------------------------------------  ------------------------------  ----------- 
 Total comprehensive 
  profit / (loss) for 
  the year attributable 
  to the equity holders 
  of the Parent                                                  (482)        3,067 
--------------------------------------  ------------------------------  ----------- 
   Group statement of financial position 
 as at 30 June 2020 
                                                                  2020         2019 
                                                               GBP'000      GBP'000 
 Non-current assets 
 Property, plant and equipment: 
  development & production                                      11,979       11,657 
 Property, plant and equipment: 
  other                                                          9,411          165 
 Goodwill                                                        2,174        2,174 
 Exploration and evaluation 
  assets                                                        36,089       34,052 
 Interest bearing loans                                          2,900            - 
 Deferred tax assets                                                 3            3 
 Total non-current assets                                       62,556       48,051 
--------------------------------------   -----------------------------  ----------- 
 Current assets 
 Trade and other receivables                                     1,414          658 
 Interest bearing loans                                              -        2,900 
 Inventory                                                         131            - 
 Cash and cash equivalents                                      25,708       30,666 
--------------------------------------   -----------------------------  ----------- 
 Total current assets                                           27,253       34,224 
--------------------------------------   -----------------------------  ----------- 
 Total assets                                                   89,809       82,275 
--------------------------------------   -----------------------------  ----------- 
 Current liabilities 
 Trade and other payables                                      (4,437)      (4,560) 
 Current tax liabilities                                             -      (1,563) 
 Total current liabilities                                     (4,437)      (6,123) 
--------------------------------------   -----------------------------  ----------- 
 Non-current liabilities 
 Trade and other payables                                      (1,372)          (5) 
 Loans                                                         (3,600)            - 
 Deferred tax liabilities                                      (1,404)      (1,284) 
 Decommissioning provisions                                    (7,650)      (6,607) 
--------------------------------------   -----------------------------  ----------- 
 Total non-current liabilities                                (14,026)      (7,896) 
--------------------------------------   -----------------------------  ----------- 
 Total liabilities                                            (18,463)     (14,019) 
--------------------------------------   -----------------------------  ----------- 
 Net assets                                                     71,346       68,256 
--------------------------------------   -----------------------------  ----------- 
 Equity attributable to 
  equity holders 
 Called up share capital                                        19,678       19,533 
 Share premium                                                  87,805       87,805 
 Merger reserve                                                  3,376            - 
 Retained deficit                                             (39,513)     (39,082) 
--------------------------------------   -----------------------------  ----------- 
 Total Equity                                                   71,346       68,256 
--------------------------------------   -----------------------------  ----------- 
 Group statement of changes in equity 
 for the year ended 30 June 2020 
                           Share capital   Share premium     Merger   Revaluation   Retained                Total 
                                                            reserve       reserve    deficit 
                                 GBP'000         GBP'000    GBP'000       GBP'000    GBP'000              GBP'000 
 At 30 June 2018                  19,533          87,805          -         (325)   (42,789)               64,224 
 Profit for the 
  year                                 -               -          -             -      2,416                2,416 
 Changes in financial 
  assets at fair 
  value through other 
  comprehensive income                 -               -          -           651          -                  651 
------------------------  --------------  --------------  ---------  ------------  ---------  ------------------- 
 Total comprehensive 
  income for the 
  year                                 -               -          -           651      2,416                3,067 
 Transfer revaluation 
  reserve on disposal 
  of financial assets 
  at fair value through 
  other comprehensive 
  income                               -               -          -         (326)        326                    - 
 Gains arising on 
  repayment of employee 
  share based loans                    -               -          -             -        941                  941 
 Share-based payments                  -               -          -             -         24                   24 
------------------------  --------------  --------------  ---------  ------------  ---------  ------------------- 
 At 30 June 2019                  19,533          87,805          -             -   (39,082)               68,256 
------------------------  --------------  --------------  ---------  ------------  ---------  ------------------- 
 Loss for the year                     -               -          -             -      (482)                (482) 
 Total comprehensive 
  income / (loss) 
  for the year                         -               -          -             -      (482)                (482) 
 Share capital issued                145               -      3,376             -          -                3,521 
 Share-based payments                  -               -          -             -         51                   51 
------------------------  --------------  --------------  ---------  ------------  ---------  ------------------- 
 At 30 June 2020                  19,678          87,805      3,376             -   (39,513)               71,346 
------------------------  --------------  --------------  ---------  ------------  ---------  ------------------- 
 Group statement of cashflows 
 for the year ended 30 June 2020 
                                                              2020         2019 
                                      Note                 GBP'000      GBP'000 
 Cashflows from operating 
 Cashflows from operations             4                       882        4,733 
 Taxation credit                                           (1,883)      (1,779) 
-----------------------------------  -----  ----------------------  ----------- 
 Net cash (used in) / generated 
  by operating activities                                  (1,001)        2,954 
-----------------------------------  -----  ----------------------  ----------- 
 Cash flow from investing 
 Interest received                                             163          239 
 Acquisition of exploration 
  and evaluation assets                                    (3,335)      (3,744) 
 Proceeds from sale of financial 
  assets at fair value through 
  other comprehensive income                                     -        6,351 
 Acquisition of property, 
  plant and equipment: development 
  and production                                              (34)         (63) 
 Disposal of property, plant 
  and equipment: development 
  and production                                                 -          211 
 Acquisition of property, 
  plant and equipment: other                                 (416)        (190) 
 Net cash from Pitreadie                                        24            - 
 Net cash (used in) / generated 
  by investing activities                                  (3,598)        2,804 
-----------------------------------  -----  ----------------------  ----------- 
 Cash flow from financing 
 Interest paid                                               (113)         (45) 
 Lease payments                                              (410)            - 
 Proceeds from loans and 
  borrowings                                                     -          941 
 Net cash (used in) / generated 
  by in financing activities                                 (523)          896 
-----------------------------------  -----  ----------------------  ----------- 
 Net (decrease) / increase 
  in cash and cash equivalents                             (5,122)        6,654 
-----------------------------------  -----  ----------------------  ----------- 
 Cash and cash equivalents 
  at beginning of year                                      30,666       23,804 
 Effect of foreign exchange 
  rate differences                                             164          208 
-----------------------------------  -----  ----------------------  ----------- 
 Cash and cash equivalents 
  at end of year                                            25,708       30,666 
-----------------------------------  -----  ----------------------  ----------- 

Notes to the financial information for the year ended 30 June 2020

   1.     Basis of preparation of the financial information 

The financial information set out in this announcement does not comprise the Group and Company's statutory accounts for the years ended 30 June 2020 or 30 June 2019.

The financial information has been extracted from the audited statutory accounts for the years ended 30 June 2020 and 30 June 2019. The auditors reported on those accounts; their reports were unqualified and did not contain a statement under either Section 498 (2) or Section 498 (3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis.

The statutory accounts for the year ended 30 June 2019 have been delivered to the Registrar of Companies. The

statutory accounts for the year ended 30 June 2020 will be delivered to the Registrar of Companies following the

Company's Annual General Meeting.

The accounting policies are consistent with those applied in the preparation of the interim results for the period ended 31 December 2019 and the statutory accounts for the year ended 30 June 2019, except for the adoption of IFRS 16 Leases which has resulted in capitalisation of former operating leases, and have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.

   2.     Administrative expenses 

Administrative expenses include a credit in respect of a non-cash revaluation of share appreciation rights (SARs) and share based payments totalling GBP1,364,000 (2019: GBP1,062,000 credit). The SARs may be settled by cash and are therefore revalued with the movement in share price. The valuation was impacted by the decrease in share price between 30 June 2019 and 30 June 2020.

   3.     Profit / (loss) per share 

Profit/(loss) per share attributable to equity holders of the Company arises from continuing and discontinued operations as follows:

                                                       2020            2019 
        Profit/(loss) per 1.5p ordinary share 
        Basic                                          (0.45)p         2.44p 
        Diluted                                        (0.45)p         2.43p 

The calculations were based on the following information:

                                                     2020                2019 
                                                     GBP'000             GBP'000 
        (Loss) / profit attributable to 
         ordinary shareholders 
        Continuing operations                        (482)               2,416 
 -------------------------------------------  ------------------  ----------------- 
        Total                                        (482)               2,416 
 -------------------------------------------  ------------------  ----------------- 
        Weighted average number of shares 
         in issue 
        Basic weighted average number of 
         shares                                      106,282,006         98,929,160 
 -------------------------------------------  ------------------  ----------------- 
        Dilutive potential ordinary shares 
        Share options                                     -              1,791,105 
 -------------------------------------------  ------------------  ----------------- 

Profit/(loss) per share is calculated by dividing the profit/(loss) for the year by the weighted average number of ordinary shares outstanding during the year.

Diluted profit/(loss) per share

Profit/(loss) per share requires presentation of diluted profit/(loss) per share when a company could be called upon to issue shares that would decrease net profit or net loss per share. When the group makes a loss the outstanding share options are therefore anti-dilutive and so are not included in dilutive potential ordinary shares.

   4.     Notes to the statement of cashflows 

Reconciliation of operating (loss) / profit to net cash flow from continuing operations

                                                                      2020            2019 
                                                                   GBP'000         GBP'000 
       Operating profit/(loss)                                       (177)           5,138 
       Depreciation                                                    764             217 
       Amortisation and exploration write off                        1,298               - 
       Disposal of development and production assets                     -              22 
       Gain on bargain purchase                                      (362)               - 
       Provision for equity settled share based payments                51              24 
       Currency translation adjustments                              (164)           (208) 
       Movement in inventories                                         230               - 
       (Increase) / decrease in receivables                          (683)             636 
       (Decrease) / increase in payables                              (75)         (1,096) 
----------------------------------------------------------  --------------  -------------- 
       Net cash flow from operations                                   882           4,733 
----------------------------------------------------------  --------------  -------------- 
   5.     Approval of this preliminary announcement 

This announcement was approved by the Board of Directors on 19 November 2020.

   6.     Posting of annual report and accounts 

Copies of the Annual Report and Accounts will be posted to shareholders shortly. The Annual Report and Accounts will be made available to download, along with a copy of this announcement, on the investor relations section of the Company's website

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(END) Dow Jones Newswires

November 20, 2020 02:00 ET (07:00 GMT)

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