Regal Says Full-Year Loss Narrows; Gas Sales Rise (Update1)
By Lars Paulsson and Eduard Gismatullin
June 24 (Bloomberg) – Regal Petroleum Plc, a U.K.-based oil and gas explorer, reported a narrower full-year loss after selling gas from fields in Ukraine at higher prices.
The net loss in the 12 months through December was $22 million, or 16.2 cents a share, compared with a loss of $115.3 million, or 89.8 cents, a year earlier, London-based Regal said today in a statement.
Chief Executive Officer David Greer said the company will have a positive cash flow by the end of next year and possibly post its first profit the following year. “We are well-prepared to move forward and deliver shareholder value,” Greer said in an interview in London.
Regal will invest $90 million this year in developing its fields in Ukraine. The company sells gas to the domestic market and has no plans to export to Europe because of high gas demand in Ukraine, which imports about 75 percent of the fuel. Sales rose by 32 percent to $14.3 million last year, Regal said. Realized prices for natural gas in Ukraine increased by 38 percent from January 2007 to January 2008.
On Nov. 23, Royal Dutch Shell Plc, Europe’s biggest oil company, ended a plan to buy Regal’s Ukrainian assets one day after Greer, a former Shell executive, was named as CEO. Greer now intends to focus on projects in Ukraine, Romania and Egypt, after selling businesses in Liberia and Greece. Regal shares more than doubled since Shell dropped the bid.
“The price that had been offered at that time didn’t give credit for the upside value in the assets,” Greer said in London. “It doesn’t mean that we will hold on to the property indefinitely.”
Regal has been in talks with several companies who have expressed an interest in the business, though these haven’t resulted in a “firm offer,” Greer said.
Ukrainian gas prices, which are regulated by the government, rose to $201 per 1,000 cubic meters “weeks ago,” compared with $180 in January, Greer said. “We are very confident, that these prices will continue to rise” or even double “in the not too distant future.”
Last Updated: June 24, 2008 05:33 EDT