Regal Petroleum gushes as production rates soar

Production from its Mekhediviska-Golotvshinska (MEX-GOL), Svyrydivske (SV) and Vasyschevskoye (VAS) gas and condensate fields grew from an average of 1,700 barrels of oil equivalent (boepd) per day throughout to 2016 to 2,800 boepd for the next twelve-month block.

Gas, condensate and LPG from MEX-GOL and SV over the three months ended 31 December was 276,089 cubic metres per day (m3/d) of gas, 54 m3/d of condensate and 30 m3/d of LPG, improvements of 96%, 42% and 57% respectively.

Over the same period at the VAS field, daily gas production moved ahead to 87,631 m3/d from the 86,801 m3/d posted in the fourth quarter of the previous year and condensate ticked ahead 0.60 m3/d to 7.0 m3/d.

In November, AIM-listed Regal entered into an agreement with NJSC Ukrnafta, the partially state-owned oil and gas producer, over its suspended SV-12 well located within its SV license area that would see the well worked over and, if successful, brought back into production with gas and condensate sold set to be sold under an equal net profit sharing agreement between the two.

The company was also set to benefit from Ukrainian government legislation passed in December that reduced subsoil tax rates for all wells drilled after 1 January to 12% from its previous 29% rate for all gas produced from deposits above 5,000 metres and from 14% to 6% for that produced from deposits below the five kilometre mark.

Regal considered the new legislation "encouraging and supportive" and whilst it would not have an immediate impact on the firm, it said there was likely to be a "positive impact" on its operating revenues in due course.

As of 0920 GMT, shares had skyrocketed 109.15% to 16.00p.