Reabold reassures investors amid volatile price environment

Oil and gas investment company Reabold Resources updated the market on what it called the “current volatile market conditions” relating to the Covid-19 coronavirus pandemic on Friday.

The AIM-traded firm said a “fundamental aspect” of its business model was to participate in projects which had low development and operating costs, thus reducing sensitivity to the oil price.

As it said on 26 February, the cash operating costs of Reabold California were $13 per barrel of oil equivalent, meaning production in California continued to be profitable and was generating positive free cash flow at current oil prices.

Reabold said its expected work programme for 2020 was fully-funded by cash already invested into the operating businesses.

The programme included the testing of West Newton A-2, the drilling of two wells at West Newton B, the testing of IM-1 and the drilling of IM-2 in Romania, and the drilling of additional wells in California.

“We believe that these projects remain highly economic at current oil prices,” the board said.

In addition, Reabold said it currently had more than £6m in cash, beyond the cash invested into the operating entities to fund the 2020 work programme, which remained available and uncommitted.

“Reabold and its investee companies are financially robust under current market conditions and Reabold is in a position to potentially take advantage of acquisition and investment opportunities that these conditions present,” the directors added.