LONDON (Alliance News) - Regal Petroleum PLC Tuesday said it swung to a pretax loss in 2013 due to an impairment of assets, amid uncertainty caused by the ongoing crisis in Ukraine.
The oil and gas exploration and production company, which operates in Ukraine, posted a pretax loss of USD162.9 million in 2013, compared to a pretax profit of USD13.1 million in 2012, as revenues fell 11% to USD36.7 million from USD41.1 million.
Regal Petroleum said its revenues fell due to a combination of lower volumes and lower prices, including a fall in gas prices to USD415 per million cubic metres from USD420.
However, the majority of the company's losses came from an impairment of USD159.2 million on the group's oil and gas development and producing assets in Ukraine, resulting from a revision of the group's field development plan and the reduction in its Reserves and Resources for the site.
Regal Petroleum said that, following mixed results from the company's new wells on the MEX-GOL and SV licence areas, an independent report resulted in a 63% fall in the company's proved and probable remaining reserves to 11.7 million barrels of oil equivalent from 31.6 million barrels.
The company also said its average production fell 7.6% in 2013 to 1,422 barrels of oil equivalent per day from 1,539 barrels of oil equivalent per day in 2012. From the start of 2014 to March 30, average production has fallen a further 7.1% to 1,321 barrels of oil equivalent per day.
The company said that despite current events in Ukraine, following the overthrow of the government and Russian annexation of the Crimean region, the firm has been able to operate normally.
Regal Petroleum operates two gas and condensate fields located in the Dneiper-Donets basin in the north east of Ukraine.
However, it noted that the change of government has resulted in volatility in the Ukrainian Hryvnia exchange rates and uncertainty in the gas sales price, despite the Ukrainian authorities announcing that the internal gas price will be increased from Tuesday.
Russian energy giant Gazprom OAO recently said that it is increasing the price it charges Ukraine for gas to USD385.5 per thousand cubic metres in the second quarter of 2014 from the previous rate of USD268.5.
Regal Petroleum shares were down 2.2% to 11.00 pence, in early trading Tuesday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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