Regal H1 Profits Down, Despite Performance Lift
Ukraine-focused Regal Petroleum saw first-half profits fall by 71% yr/yr, owing to a one-off gain it booked from an impairment reversal last year.
Pre-tax profits came to $13.3mn in the six months ending June 30, the London-listed company said in a stock exchange filing on September 13, compared with $44.5mn a year earlier. Its interim results for 2018 included a $34.5mn impairment reversal, connected with a reassessment of its reserves.
Regal’s overall performance strengthened, however, with revenues up 27% yr/yr at $31.3mn on the back of higher production, which more than offset a slump in prices. Gas output soared 47.7% yr/yr to 18.9mn ft3/day, thanks to higher production rates at wells at the VAS and SV fields. Overall extraction of gas and liquids surged 50%, arriving at 4,192 boe/day.
Regal’s cash generated from operations also grew by 34.3% to $13.1mn. It had $67.8mn of cash and cash equivalents at the end of June, versus $53.2mn at the end of December.
“Whilst there are still challenges in the business environment in Ukraine, the situation is improving gradually,” the company said.
Regal is looking ahead to results from its MEX-199 development well and hydraulic fracturing operations at its MEX-120 borehole.
“We are also looking forward to achieving further successes in the development activities planned for the remainder of 2019 and delivering a steadily increasing production and revenue stream in the future.”
Fellow Ukraine-based juniors JKX Oil & Gas and Cadogan Petroleum also managed to boost earnings this year thanks to production gains, despite an unprecedented decline in Ukrainian gas prices.