Regal Petroleum decreases output 15% qoq in 2Q12

Regal Petroleum (RPT LN) reported a decrease in gas and condensate production to 1,507 boepd during April 1-June 17, down 14.8% compared to 1Q12 (1,769 boepd). Average daily gas output was down 16% over the period to 195.6 ths cm, and condensate output was down 8% to 46 cm. The company said its SV-66 well was back in operating mode following a workover and production tests, two other wells were in a scheduled workovers and one more well (MEX-3) was put into unplanned an workover aimed to shut off water ingress. Regal reiterated the total development time for its new SV-53 and MEX-105 wells was expected to be 400 and 350 days, respectively.

Roman Dmytrenko: It looks like the company’s output decline in 2Q12 was related to the unexpected idling the MEX-3 well, which was not compensated by the recommissioning of SV-66. Given uncertainty related to solving the water ingress problem at MEX-3, chances that Regal will increase gas output in the next quarter are low, in our view. Further growth in output this year will depend on recommissioning the two wells currently being worked over.