Regal Increased Revenues by 74% in 2009
Regal announced its audited results for the year ended December 31, 2009.
- Revenues, at $19.9 million are up 74% on the prior year and gross profit has increased 136%;
- The net loss after tax has been cut by 81% from $50.8 million in 2008 to $9.8 million in 2009;
- Regal realized an average price for its gas equivalent to $244 per Mm³, a 31% rise on the previous year;
- Gas sales volumes are up 64% on 2008, contributing to a 120% rise in gas revenue over the previous year;
- Condensate average price realized for 2009 was $57/bbl; being a 32% fall on 2008 reflecting oil price movement. Condensate sales volumes rose 45%;
- $105 million (gross) of new capital was raised by the secondary placing of 104,000,000 new ordinary shares at 61 pence per share on 1 July 2009;
- As at 31 December 2009, Regal held $118.6 million in cash and had no debt.
- Ukraine continues to be the main focus of operational activity and investment;
- Drilling performance improvement from previous drilling on the licenses;
- Jet perforating coupled with Stimtube fracturing has resulted in significant improvements in production rates;
- Production has risen from below 500 boepd in the fourth quarter of 2008 to over 2,000 boepd by January 2010;
- Four new production wells were spud in Ukraine during 2009;
- Subsurface model of the field was completed by the end of 2009;
- Near term focus shifting to development of the shallower B-Sands to target increased gas production;
- Two million man-hours of staff and contractor time recorded without any Lost Time Incidents to date;
- In the Barlad concession in Romania, a further 104.7 km of 2D seismic was acquired and a shallow gas exploration well is planned for later in 2010 as well as evaluation of shale gas potential;
- In the Suceava concession in Romania, 2D seismic data acquired resulted in the identification of a gas prospect and a gas exploration well is planned for later in 2010.
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.
- Regal Completes and Hooks Up SV-59 Well Onshore Ukraine (Feb 06)
- Regal Reports Lower Production from Ukraine Operations (Jan 03)
- Regal Updates on Ukrainian Reserves (Apr 15)