Energy group Parkmead plans to make its first move into renewable power after buying more than 2300 acres of Aberdeenshire farmland.
The Aberdeen and Netherlands-based firm which operates oil and gas fields in the North Sea has to pay £4.9 million for Pitreadie farm, 15 miles west of Aberdeen.
It said it had identified potential for wind and solar farms and a biomass plant and that average wind speeds of between 7-10 m/s had been recorded. There is already a wind farm at neighbouring Mid Hill with 33 turbines.
Linda Cross, wife of Parkmead executive chairman Tom Cross has been listed as a director of Pitreadie Farm since 2015 and owns 75% of it. A loan of £4.3 million in her name will be settled in shares as part of the deal. Kevan Smith, who holds the other 25%, will receive ordinary shares.
Parkmead will also assume £3.6 million of Bank of Scotland debt currently held by Pitreadie.
Parkmead described renewables as “a natural expansion of Parkmead’s energy operations and is fully in line with the Group’s strategy to increase the balance of Parkmead’s portfolio”.
The land and property assets alone were previously valued at £7.59 million by CKD Galbraith and at 31 July 2019, the total assets of Pitreadie, including plant machinery and stock, were valued at £8.64 million.
Parkmead’s Independent non-executive directors Philip Dayer and Iain Rawlinson said: “This acquisition is directly in line with Parkmead’s strategy. It positions the Group very well for balanced growth by making a first step into the renewables sector. These assets have significant onshore wind energy potential.
There is an active market for land assets in Scotland, particularly those with renewable energy potential.”
Parkmead’s North Sea oil assets include the Skerryvore and Ruvaal prospects, ongoing operations off the Moray Firth and licences for exploration at Sanda North, Sanda South and Davaar, West of Shetland.
Chief Financial Officer Ryan Stroulger added: “We are delighted to have secured this exciting opportunity in line with Parkmead’s strategy. The acquisition strengthens the Group by adding quality assets with very significant renewable energy potential.
“Renewable energy is an area of major opportunity for us and, with our strong in-house technical and commercial expertise, Parkmead is very well positioned to benefit from this acquisition.”