Regal Petroleum output falls 8% yoy in 2012

Regal Petroleum (RPT LN) decreased its gas and condensate production to 1,539 boepd in 2012, down 8.3% from the last five months of 2011 (production was halted in 2011, resuming only in late July), the company reported on Jan. 3. Regal’s average production grew 3.4% qoq to 1,467 bopd in 4Q12. The company’s MEX-3 well, which suffered water ingress in June 2012, still remains shut in. The new MEX-105 well has reached a depth of 4,863 metres and drilling is continuing towards a target depth of 5,250 meters. Production tests on the company’s SV-53 well, where the initial testing indicated a hydrocarbon flow rate of 1,187 boepd, is due to start in early February.

Roman Dmytrenko: We expect Regal to report 41.0 mln in 2012 revenue, a 115% increase yoy. The uncertainty related to solving the water ingress at MEX-3 implies Regal’s 2013 output growth depends on two factors: sustaining an exceptionally good flow rate at SV-53 and successfully commissioning the new MEX-105 well, which together might boost the company’s current average production 2x to 3,000 boepd by mid-2013.