Regal Petroleum issues Ukraine update

Regal Petroleum has issued an update of its operational activities at its Ukrainian gas and condensate fields, which comprise the Mekhediviska-Golotvshinska (MEX-GOL) and Svyrydivske (SV) fields and the Vasyschevskoye (VAS) field, all of which are 100% owned and operated.

Average gas, condensate and LPG production from the MEX-GOL and SV fields for the year ended 31 December 2016 was 157,228 m3/d of gas, 41 m3/d of condensate and 19 m3/d of LPG (1,321 boepd in aggregate) (2015: 144,783 m3/d of gas, 44 m3/d of condensate and 21 m3/d of LPG (1,274 boepd in aggregate)).

On 4 July 2016, Regal acquired LLC Prom-Enerho Produkt ("PEP"), which owns the VAS field. Average gas and condensate production from the VAS field for period from 4 July 2016 to 31 December 2016 was 82,624 m3/d of gas and 6.5 m3/d of condensate (556 boepd in aggregate).

Since July 2015, the Group has been purchasing "wet" gas from Pryrodni Resursy, the operator of the adjacent Lutsenky field, and treating this gas through the Group's gas processing facilities to strip out and sell the liquids.

During 2016, the Group purchased 8,262,121 m3 of "wet" gas and following treatment of this gas, produced 4,929,386 m3 of gas,1,448 m3 of condensate and 11,034 m3 of LPG (87,713 boe in aggregate). This arrangement concluded in December 2016 as a result of Pryrodni Resursy constructing its own facilities.

Drilling of the MEX-109 well is continuing and has reached a depth of 4,785 metres as at 3 January 2017. The well was spudded at the end of July 2016 and is targeting the Visean reservoirs ("B-Sands") in the MEX-GOL field.

The well has a target depth of 5,250 metres, with drilling operations scheduled to be completed by March 2017 and, subject to successful testing, production hook-up by the end of the second quarter of 2017.