The company, which has assets in the North Sea, west of Shetland and onshore in Scotland and 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. Shares in the company tumbled by nearly 10 per cent.
The reversal was reported by Parkmead 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.
The reversal despite Parkmead reporting that revenue more than doubled to £11.1 million over the period, as it benefited from “robust production through sustained period of high gas prices”.
The high prices, which arose in the wake of Russia’s invasion of Ukraine, translated into a huge leap in cash generation at Parkmead in the second half of last year. Net cash from operating activities surged by more than 400% to £8.86 million, while gross profit climbed to £9.8m from £3.8m for the same period in 2021.
However, the company noted that statutory gross profits were offset by a £4.8m tax charge arising principally from its Netherlands operations as well as a £4m windfall tax charge that it said was expensed during the period but will be due for payment in May 2024.
Mr Cross said: “I am pleased to report that strong operating performance has been achieved by Parkmead in the six-month period to 31 December 2022.
“In line with our strategy, Parkmead now benefits from stable revenue generated by clean, renewable sources, onshore Scotland. This is in addition to our high-quality onshore gas assets across the Netherlands.
“The Group has achieved an increase in revenue of over 140% on the prior year period, and outstanding growth in net cash generated from operating activities of over 400%.
“Parkmead’s successful drilling campaign in the Netherlands has resulted in the LDS-01 well encountering new commercial gas volumes. This well has been swiftly tied into production infrastructure, with first gas due imminently.
“We continue to maintain strict financial discipline across all our existing energy projects. This is in addition to the ongoing evaluation of acquisition opportunities that will complement the Group and maximise shareholder value.”
Oil and gas companies have seen huge rises in profits following the surge in commodity prices that followed the start of Russia’s invasion of Ukraine.
However, the bumper earnings have led to criticism as the rise in oil and gas prices has led to crippling energy bills for consumers.
The UK Government responded by introducing a windfall tax on the extraordinary profits companies were making in May last year, which was then extended in November. But the additional taxation has met with increasing disquiet by oil and gas producers, which claim it is undermine much-needed investment in crucial North Sea projects at a time when the UK is striving to increase domestic energy supplies.
Parkmead said: “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.”