LONDON (Alliance News) - Regal Petroleum PLC said Tuesday the Ukrainian government has enacted legislation to reduce subsoil taxes on gas production to "substantially" the same levels they were before a temporary emergency hike it put in place in August 2014.
The government increased subsoil taxes as a temporary fiscal measure in August 2014, resulting in the near doubling of taxes payable on the company's gas production, and this emergency measure continued throughout 2015. The new legislation to reduce the taxes was put in place from the start of January.
The oil and gas exploration group said that average production from its Mekhediviska-Golotvshinska and Svyrydivske gas and condensate fields in Ukraine fell in 2015. Average production of gas was 144,782 cubic meters per day, down from 152,744 cubic meters per day of gas in 2014.
Average production of condensate was 44 cubic meters per day, down from 52 cubic meters per day in the previous year, and average production of liquefied petroleum gas was 21 cubic meters per day, flat from the previous year.
Average production of gas, condensate and liquefied petroleum gas was bolstered in December by the commencement of production from the SV-6 well at Svyrydivske.
Regal said that, since the beginning of July last year, it has been buying 'wet' gas produced from the adjacent Lutsenky field and treating it through its facilities under a deal with the operator of the Lutsenky field Pryrodni Resursy. 'Wet' gas refers to any gas with a small amount of liquid present.
In the second half of 2015, Regal bought 4.7 million cubic meters of wet gas, and produced 2.9 million cubic meters of gas following treatment, along with 778 cubic meters of condensate and 5,957 cubic meters of liquefied petroleum gas.
Shares in Regal Petroleum were untraded Tuesday morning. They last closed at 3.44 pence.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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