LONDON (Alliance News) - Regal Petroleum PLC shares dropped on Monday after it said its profit in the first half of 2015 fell significantly, as lower production was compounded by weaker oil and gas prices, and the company plans to limit its development work going forward due to the uncertainty in the Ukraine.
Regal shares were down 13% to 3.44 pence per share on Monday morning.
The oil and gas company operating in the troubled country of Ukraine reported a USD481,000 pretax profit in the first six months of 2015, a significant drop from the USD4.5 million profit made a year ago as revenue fell to USD10.9 million from USD17.5 million.
"Despite ongoing geopolitical events in Ukraine, the group's production operations have continued relatively normally, although such events have resulted in continued volatility and weakening of the Ukrainian hryvnia exchange rates, disruption to the gas sales market and gas sales price, and the imposition of significant increases in subsoil taxes, which in turn, have adversely affected the group's financial results," it said in a statement.
Average production in the period came in at 145,009 cubic metres per day of gas, 45.0 cubic metres of condensate and 20.4 cubic metres of liquefied petroleum gas. Together, that equates to around 1,291 barrels of oil equivalent per day.
A year earlier, Regal produced 155,520 cubic metres of gas per day, 54.0 cubic metres of condensate and 20.0 cubic metres of liquefied petroleum gas, equating to 1,397 barrels of oil equivalent per day.
That fall in production was compounded by reduced oil and gas prices. In the period, Regal achieved an average gas price of USD277 per thousand cubic metres, down from USD361 a year earlier. Condensate prices averaged USD53 per barrel, down from USD94 per barrel whilst LPG prices fell to USD50 per barrel from USD94.
Cash at the end of the period totalled USD18.9 million, severely down from USD31.8 million at the end of December. Regal plans to use those funds to carry out a "limited development programme" in the second half of 2015.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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