LONDON - Parkmead Group plc, an independent energy company, has announced the sale of its subsidiary, Parkmead (E&P) Ltd, to Serica Energy (LON:SQZ) (UK) Ltd. The subsidiary holds Parkmead's UK offshore oil licenses. The deal excludes Parkmead's Netherlands onshore gas licenses, which the group will retain along with its revenue-producing Dutch natural gas fields and UK wind farm.
The transaction is structured to include £14 million in firm cash consideration and up to £120 million in contingent cash considerations. The initial payment at the completion of the sale is £5 million, with three deferred payments totaling £9 million due between February 2025 and February 2027. Additionally, two contingent payments are tied to the approval of field development plans for licenses P2400 and P2634, with caps of £30 million and £90 million, respectively.
Completion of the sale is subject to certain conditions, including approval from the North Sea Transition Authority (NSTA) for the change of control of the subsidiary and an intragroup transfer of Parkmead's license interests in the Netherlands. These conditions are expected to be met in the first half of 2025.
Parkmead's decision to sell its UK North Sea oil licenses reflects the challenges in the offshore sector and the UK government's focus on its Net Zero Strategy. The company believes that Serica, as a larger North Sea-focused entity, is better positioned to develop these assets. This move allows Parkmead to concentrate on growing its gas assets in the Netherlands and its renewable energy projects.
Following the sale, Parkmead will continue to hold its other energy assets, including its operated Kempstone Hill Wind Farm and potential solar and wind energy development projects at Pitreadie. The company is also exploring opportunities to acquire additional cash-generating renewable energy assets and international exploration and production opportunities.
Tom Cross, Parkmead's Executive Chairman, expressed satisfaction with the sale, highlighting the financial strength it provides the company to pursue growth in natural gas, renewable energies, and international exploration and production.
The sale is supported by financial advice from Gneiss Energy Limited. The information disclosed in this transaction is based on a press release statement and is now in the public domain.
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