Royale posts loss in first quarter

Royale Energy Inc. reported a $1.2 million loss in the first quarter, down from a gain of $76,853 during the first quarter of last year, because of falling production and prices.

The San Diego, Calif.-based independent sold 169 million cubic feet during the first quarter at $2.63 per thousand cubic feet after selling 342 million cubic feet during the first quarter of 2011 at $4.04 per mcf, the company reported in year-end financial filings on May 15.

Although the company lost on natural gas during the quarter, it doesn’t plan to abandon the fuel as it begins its search for shale oil in Alaska. “We are committed to natural gas’ long-term potential,” Co-CEO Stephen Hosmer said. “I do not believe present market conditions correctly reflect the future value attributed to developing our natural gas reserves. Yes, we have added oil to our mix by acquiring of the Alaska prospect, but we will not sacrifice the future by deferring the development of this important seismic data.”

Royale spent $359,000 during the quarter on a seismic shoot in California.

Royale remains “encouraged” about Alaska, though, saying that the test well planned by fellow Alaska shale prospectors Great Bear Petroleum LLC and Halliburton “is expected to further confirm the prospectivity of Royale’s acreage” in the Shublik formation.

—Eric Lidji