Investors in Regal Petroleum (LON:RPT) were left bemused today after the oil and gas group said it was in talks with the Ukrainian government over whether or not some of its operations in the country were operating in full accordance with the law. Regal said an order dated March 30, 2010 – but only received by the company on May 21, 2010 – had required a suspension of operations at its Mekhediviska Golotvshinska (MEX-GOL) and Svyrydivske (SV) gas and condensate fields, but that operations were still active while discussions were being held. Shares in the company tumbled by nearly 24% to 27.75p on the news.
The order was issued by Ukraine’s Ministry of Environmental Protection, which Regal said had identified “certain matters requiring rectification”. It insisted that, on receipt of the letter and the order, it had immediately engaged with and held meetings with government officials to understand the circumstances surrounding the order. Whilst the problems have yet to be resolved, Regal said it believed that the talks would result in the rectification of the issues raised by the order and that it was not required to suspend operations whilst these ongoing discussions continue.
Earlier in June, Regal reported better than expected test results from well SV-66, the latest B-Sand well in its field development programme in Ukraine. The company's field production rate on June 5 was 2,952 boepd, including SV-66 but excluding MEX-106 and SV-61, both of which are shut-in awaiting work-over and SV-10 which is shut in temporarily for the SV-66 test period. For more information about Regal Petroleum, click here.
In September 2009 Regal was handed a stock exchange censure and a £600,000 fine over breached to AIM rules dating back to 2003 and 2005, where it was found to have failed to take reasonable care to ensure that its announcements were not misleading, false or deceptive, and did not omit material information. On two occasions, Regal also failed to release price sensitive information without delay. Since then the company has undergone several management changes and launched significant development projects at its fields in Ukraine.
Two interesting developments today.
First off is the rns stating that an injunction has been obtained by the ukrainian's with the offtake agreement for mex-gol (sorry, can't link as I'm mobile today).
Secondly there are reports that the environment minister has gone (snippits from the newswires):
The Ukrainian parliament on 2 June dismissed the deputy prime minister for humanitarian issues, Volodymyr Semynozhenko, the Ukrainian news website Ukrayinska Pravda has reported. The dismissal was initiated by a member of the opposition Yuliya Tymoshenko Bloc, but was also backed by the ruling coalition, as a total of 378 members voted to sack him without any prior discussion, the website said.
Parliament also voted to relieve Viktor Boyko of his duties as minister of environment, the Interfax-Ukraine news agency reported at
0744 gmt on 2 July. The government's request to release Boyko was supported by 258 members of parliament, the agency said. Prime Minister Mykola Azarov, who was present in parliament, explained the request by Boyko's "transfer to another job", without specifying.