Regal reports disappointing update at new wells

Regal reports disappointing update at new wells



2 липня 2013 года
Конкорд Капитал

Regal Petroleum (RPT LN) reported on July 1 that the acid stimulation of its MEX-105 well, which initially demonstrated weak natural gas flow, lacked positive results and the company is considering other measures to enhance flow, including hydraulic stimulation. The company also reported a lack of results at another new well, SV-53, whose encouraging initial flow under testing has since disappeared. Regal had already developed a hydraulic fracturing program there, with no details offered on whether and when it will be implemented.



The company’s hydrocarbon output for 6M13 averaged 1,525 boepd – flat compared to 5M13 (1,526 boepd) and FY2013 (1,539 boepd) but visibly lower compared to 2M13 (1,700 boepd).



The company also updated on its new drilling well, SV-59: 4,376m has been reached as of end-June vs. 3,700m in the beginning of the month (of a targeted depth of 5470m).



Roman Dmytrenko: Recall that Regal was aiming to double its hydrocarbon output this year with the SV-53 and MEX-105 wells. Therefore their weak flows disappointed the markets. Regal’s only possible output driver for the next quarter is its GOL-1 well, which the company is currently working over to be isolated from water ingress and shifted to a higher reservoir. That being said, not only are Regal’s plans for doubling hydrocarbon output this year not achievable, but the company is unlikely to maintain last year’s output in 2013.



This hints that the company’s output growth will shift to 2014, relying mainly on the success of its new SV-59 well, and to some extent, on future stimulation results of its two disappointed wells.

Источник: Конкорд Капитал

Аналитик: Роман Дмитренко
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