Oil and Gas
September 29, 2011
Regal Petroleum posted a USD 11.6mn operating loss in 1H11, a result which was expected given that the company was unable to extract any gas in the reporting period. However, Regal states that it earned USD 10.4mn in net profit from the sale of its license for the Barland Concession in Romania. The company’s average daily output in the current month has reached 1,620 boepd; for the Sept-Dec 2011 period, we model an average output of 1,800 boepd. We have revised our forecast for Regal’s FY11 bottom line from a net loss of USD 4.9mn to a net profit of USD 2.4mn to reflect the profit realized on the sale of the Romanian license. We have a BUY recommendation on the RPT stock with a target price of USD 1.52 (GBp 97).
