REGAL Petroleum could seek a larger partner to help tackle substantial problems with a number of gas wells it has drilled in the Ukraine after admitting yesterday it had suspended drilling while it carried out a strategic review.
Regal said that two wells in the Ukraine had reached their target depth on 29 September. However, having drilled to the target depth Regal has been unable to retrieve the drill bit on its SV-69 well due to “hole stability problems and equipment failures.” Chief executive David Greer stood down the following day without giving clear reasons for doing so, while former chief executive Frank Timis cut his stake in the company from around six per cent to 3.93 per cent on 15 October.
The Aim-listed oil and gas group could now seek a deal with a company with “the financial muscle and technical expertise” to complete the job it started in the Ukraine, a person familiar with the company’s position told City A.M. Two potential partners could be Shell and BP both of which already have substantial interests in the region.
One of Regal’s non-executive directors is Alastair Graham, a former senior BP executive with over 29 years experience of the oil and gas industry. Graham has been given responsibility for carrying out the strategic review, which is expected to be completed in a matter of weeks.
Meanwhile, Shell has been linked with a deal with Regal in the past. Most recently two years ago.