Regal announced its audited results for the year ended December 31, 2009.
During 2009, Regal continued to pursue the strategy that was established during the previous year in the development of its Ukrainian assets. Despite the worldwide recession and resultant stemming of liquidity in global financial markets that has tested many companies, Regal has continued to follow its initial objectives to try to unlock the true value of its Ukrainian assets. This foundation should provide a stable platform for significant future growth in production and increased revenues, with such increasing production giving a positive earnings outlook. The Company continues to have no debt and sufficient cash and materials to maintain operating activity into the foreseeable future.
However, the experience gained in the drilling of the first four new generation wells, and particularly in drilling to the deeper sections in the wells on the SV field where drilling conditions have proven to be challenging at depth, has caused the Company to re-evaluate and refine its objectives for the development of the Ukrainian field. In this regard, the Company has determined that its immediate primary focus should be on securing production from the B-Sands reservoirs in both the MEX-GOL and SV fields. Appraisal of the T and D-Sands in the MEX-GOL field will be carried out on the MEX-106 well, where work-over operations are planned to complete the perforation of the B, T and D-Sands using advanced perforation techniques and to replace the well completion. It is considered that by focusing on increasing production from the B-Sands and the resultant operational revenue in the near term, the Company will be able to establish sustainable business growth by conserving and ultimately building its cash position and retaining maximum optionality, while continuing to evaluate the most effective method of appraising the potential upside of the deeper T and D-Sands in the future.
Accordingly the Company has determined to complete the SV-66 well as a B-Sands production well, while deferring the appraisal of the T and D-Sands in this and subsequent new wells to allow further work to be undertaken in the assessment of the most effective method of appraising the deeper T and D-Sands.
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