Royale Energy Inc. (NASDAQ: ROYL) has announced that it discovered natural gas in its Andrus Island East well in the Sacramento Basin of California which was drilled as part of its 2008-A drilling project. While individual finds and individual projects are not major events for larger oil and gas players, this is one very very speculative company with a low market cap and low revenues as you will see below.
After completing and testing the Starkey sand in the Andrus Island Eastwell, it was flowing over 1,000,000 cubic ft. of natural gas per day.The company’s entire revenues in the last quarter were only 4.711million and its market cap even with the pop this morning is barely $30million.
As far as the depths and locations, the company noted that the well wasdrilled to 7,000 ft. and logged pay in two natural gas filled sands inthe Nortinville formation at 3,350 ft. and 3,800 ft. The deeper StarkeyChannel was penetrated at 6,500 ft. and encountered 26 ft. of highporosity and permeable natural gas filled sands.
Shares are indicated up 15% pre-market at $3.61 on the find. So faronly 3,900 shares have traded, but its average daily volume is about330,000. Its 52-week trading range is $2.18 to $14.70.
Jon C. Ogg
October 7, 2008