Royale Energy's Positive Cash Flow Bolstered by California Discoveries

Royale Energy earned $1,540,924 or 19 cents per share in "Cash flow from Operations" for year end 2008, bolstered by discoveries in California. While investing heavily in the development of new opportunities, the company continued to add reserves from drilling and cash flow from its core area of operation in California's Sacramento Basin.

The capital requirements used in development of Texas Gulf Coast and Rocky Mountain operations were most affected by the sharp decline in the broader energy markets. With oil & natural gas prices falling by over 70% from mid 2008, many companies including Royale, adjusted the cost basis of their assets. The non-cash impairment charges of $15,691,348 resulted in a net loss of $8,777,614. Total revenue for the year ended 2008, rose to $19,174,114 from $16,557,399 in 2007 or 15.8%.

Stephen Hosmer said, "The industry today is reminiscent of 1986 when the company was founded. In challenging times opportunities abound. Investment decisions on the use of capital must be carefully weighed to correctly position the company for future growth."

Royale will continue to focus investment in areas such as the Sacramento Basin Lonestar Field, where the company drilled 3 wells and increased production by 7.5% in 2008. Plans for 2009 include the drilling of 7 new wells in the field.

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