Ruspetro Share News (RPO)

Oil extraction specialist Ruspetro has revealed that its earnings before interest, tax, depreciation and amortisation (EBITDA) will be significantly enhanced by changes to Russian tax law on 'tight oil'.The small cap-listed company said new tax breaks applied to hard-to-extract 'tight oil' could increase its EBITDA per barrel of oil by around 400%.Chief Executive Officer Tom Reed said: "This is a very positive development for the company which puts the business on a much more cash generative footing and creates a significant value opportunity for shareholders."Siberia-focused Ruspetro reported that a "substantial" reduction in the Russian Mineral Extraction Tax (MET) applicable to tight oil had been passed into law this week that would be applied to production from the Company's qualifying reserves from September 1st.Ruspetro said it estimated the 80% MET relief would be applicable to 74% of its reservoirs, which represented around 97% of its current crude oil production.The 80% reduction in the MET rate would, it said, increase wellhead revenue per barrel for the group's crude oil production from approximately $22.40 to approximately $39.10 at a gross price of $100 per barrel. The increased wellhead revenue flows straight through to EBITDA and therefore has a much larger effect at this level, meaning if the MET breaks had been in place 2013's first quarter EBITDA per barrel of $3.61 would have been five times higher at $17.15.The company added that for the first half of the year, it had produced an average of 5,455 barrels of oil per day, a 38% increase on the same period last year.Reed added: "The company continues to make progress with its strategic review and will provide further updates in due course."Shares in the company were up 13.6% to 31.25p at 10:30 on Friday.OH