Regal Petroleum PLC Market Momentum is Building

Regal Petroleum PLC header image

Regal Petroleum plc (RPT.L) is an independent oil and gas exploration and production company with three gas and condensate fields in NE Ukraine. These fields comprise the Mekhediviska-Golotvschinska (MEX-GOL) and Svyrydivske (SV) fields, which are adjacent and operated and managed as one field, and the Vasyschevskoye (VAS) field. Each field is held under a 100% owned and operated production licence. RPT is a public company, based in London, with its shares quoted on the AIM Market.

On September 21st, 2018, RPT announced unaudited results for the six-month period ended 30 June 2018. Revenues nigh on doubled to $24.6m (1H 2017: $12.4m), while gross profits rocketed to $11.9m (1H 2017: $3.2m). RPT reported strong cash generated from operations of $13.1m (1H 2017: $5.5m), ending the period with cash and cash equivalents at 19 September 2018 of $46.8m, held as $22.5m equivalent in Ukrainian Hryvnia and the balance of $24.3m equivalent predominately in US Dollars and Pounds Sterling. A busy second half of investments into facilities, new projects and acquisitions will be funded from existing cash resources and operational cash flow. Chairman Chris Hopkinson said that after the operational successes during the first half of 2018 and the increased production output during July 2018. . .” we are looking forward to achieving further successes in the development activities planned for the remainder of 2018 and delivering a steadily increasing production and revenue stream in the future.”

Drilling into the Share Details

RPT stock started climbing steadily toward the end of July 2018, flagging an opportunity to VectorVest members, and since that time has retained an excellent Relative Timing (RT) (stock price trend) metric of 1.73, (on a scale of 0.00 to 2.00). RPT also logs an excellent Relative Value (RV – indicator of long-term price appreciation) rating at 1.62 – again excellent on a scale of 0.0 – 2.0, and along with an excellent GRT (Earnings Growth Rate) of 39% presents a comprehensively compelling investment opportunity. Even so, trading today at 52p and with a good RS (Relative Safety) rating of 1.12 (scale of 0.00 to 2.00), RPT is still a long way below the current VectorVest valuation of 82p.

VectorVest price chart of RPT.L showing EPS.
Click or tap image to enlarge.

The chart of RPT.L is shown above in my normal format. Recently as Earnings Per Share (EPS) increased the share was revalued (the green line study) upwards by VectorVest. Technically the share has broken out and tested an ascending triangle formation and is on a BUY recommendation on the VectorVest program.

Summary: The turnaround in RPT stock since July is no less remarkable that the prior increase from year lows of 4.25p at the start of 2018. Even so, this well managed and run oil and gas company has delivered spectacular revenue and profit growth, and with a raft of excellent VectorVest metrics, also offers a decent degree of safety for the more cautious investor.

 

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