PARKMEAD, the independent energy group backed by North Sea oil and gas entrepreneur Tom Cross, has commenced gas production from its new LDS-01 discovery in the Netherlands.

Last week, Mr Cross, who is the Aberdeen-headquartered company’s executive chairman, said that Parkmead’s successful drilling campaign in the Netherlands had resulted in the LDS-01 well encountering new commercial gas volumes.

Parkmead said that the well has been tied into the neighbouring commercial gas production infrastructure “in just a few weeks, demonstrating again the operational efficiency of Parkmead’s low-cost assets onshore the Netherlands, where operating costs are less than $9 per barrel equivalent”.

It confirmed that the new discovery is in its initial clean-up period, with early flow rates suggesting that Parkmead will “benefit from a material increase in daily net production”.

The Aim-listed group, which also 100% owns and operates the Kempstone Hill wind energy company in Aberdeenshire, producing electricity direct to the UK grid, last week declared it has “obvious concerns” around increasing tax on energy production around Europe as it fell into the red in the six months ended December 31, 2022.

Parkmead, which has assets in the North Sea, west of Shetland, and onshore in Scotland and the Netherlands, reported a loss of £5.2 million, following a profit of £1.3m at the same stage last year. The loss came after a £12.7m impairment charge following the decommissioning of the Athena oilfield in the North Sea, and a windfall tax charge of £4m in the Netherlands.

It was reported amid increasing concern within the energy sector that windfall taxes brought in to curb excessive profits will lead to a loss of crucial investment, as European countries strive to boost domestic energy production amid the fall-out from the war in Ukraine.

However, Parkmead reported that revenue more than doubled to £11.1m in the first half, boosted by “robust production through sustained period of high gas prices”.
Parkmead told the City last week: “There are obvious concerns in the upstream industry about the high and increasing levels of taxation on primary energy production across Europe, and how that may impact future investment.

"Despite this higher taxation, Parkmead has the benefit of having built multiple opportunities to create additional value, such as those across the Netherlands, as well as the progression of our Skerryvore project in the UK Central North Sea.”

The company added: “While frustrating, we understand that this windfall tax will aid the Netherlands population in accessing lower-cost, low-carbon energy – an ultimate goal for Parkmead, and why we aim to increase our domestic natural gas output in the region.”