Royale Energy Inc. (ROYL, Financial) filed Quarterly Report for the period ended 2010-09-30.
Royale Energy Inc. has a market cap of $20.6 million; its shares were traded at around $2.02 with and P/S ratio of 2.4.
In the first nine months of 2010, revenues from oil and gas production decreased $91,728 or 4.3% to $2,043,693 from 2009 revenues of $2,135,421, due to lower oil and natural gas production. The net sales volume of natural gas for the nine months ended September 30, 2010, was approximately 378,172 Mcf with an average price of $4.47 per Mcf, versus 460,675 Mcf with an average price of $3.96 per Mcf for the first nine months of 2009. This represents a decrease in net sales volume of 82,503 Mcf or 17.9%, mainly due to the natural declines in production from existing wells. For the quarter ended September 30, 2010, we produced 129,020 Mcf with an average price of $3.92 per Mcf versus 137,885 Mcf produced during the same quarter in 2009 with an average price of $3.94 per Mcf, which represents a 8,865 Mcf or 6.4% decrease in net sales volume. The net sales volume for oil and condensate (natural gas liquids) was 5,042 barrels with an average price of $70.26 per barrel for the first nine months of 2010, compared to 6,403 barrels at an average price of $48.55 per barrel for the first nine months in 2009. This represents a decrease in net sales volume of 1,361 barrels, or 21.3%. For the third quarter of 2010, oil and condensate produced decreased 422 barrels, or 20.6%, from 2,045 barrels produced in 2009 to 1,623 barrels produced in the same period in 2010. This decrease was mainly due to the natural declines in production from existing wells.
For the nine months ended September 30, 2010, turnkey drilling revenues increased $3,420,282 or 155.1% to $5,625,535 from $2,205,253 during the same period in 2009. We also had a $971,034 or 108.7% increase in turnkey drilling and development costs to $1,864,420 in 2010 from $893,386 in 2009. In the third quarter of 2010, turnkey drilling revenues increased $1,251,092 or 316% from $395,879 during the period in 2009 to $1,646,971 in 2010. Also, during the third quarter in 2010, our turnkey drilling costs increased by $753,974 to $760,816 in 2010 from $6,842 in 2009. Turnkey drilling revenues increased due to a greater number of wells drilled in the first nine months of 2010 than in 2009. For the nine month ended September 30, 2010, we reached total depth on seven wells, while during the same period in 2009 we reached total depth on two wells. Turnkey drilling costs rose due to an increase in drilling activity during 2010, and the absence of drilling adjustments recognized in 2009. We anticipate drilling activity to continue in the next quarter as we have processed permits for several new wells, and expect to drill approximately four California wells during the fourth quarter of 2010 depending on the weather conditions.
General and administrative expenses increased by $203,690, or 7.6%, from $2,663,151 for the nine months ended September 30, 2009, to $2,866,841 for the period in 2010. Third quarter 2010 general and administrative expense increased $11,865, or 1.3% from $905,168 in 2009 compared to $917,033 in 2010. These increases were primarily due to increased employee related costs.
Legal and accounting expense decreased to $530,278 for the first nine months of 2010, compared to $657,281 for same period in 2009, a $127,003 or 19.3% decrease. This decrease during 2010 stems from increased legal fees incurred during the first two quarters of 2009 pertaining to the Pioneer litigation and our new credit facility. For the third quarter, legal and accounting expenses increased by $146,856, or 114% from $128,862 in 2009 to $275,718 in 2010. The increase in the third quarter s legal and accounting expense was the result of increased litigation costs relating to our National Fuel Corporation dispute.
At September 30, 2010, our accounts receivable totaled $1,629,668, compared to $2,493,108 at December 31, 2009, an $863,440 (34.6%) decrease, primarily due the receipt of tax refunds previously classified as other receivables. At September 30, 2010, our accounts payable and accrued expenses totaled $3,770,441, a decrease of $1,358,546 or 26.5% from the accounts payable at December 31, 2009, of $5,128,987, mainly due to paying down our accounts payable.
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Royale Energy Inc. has a market cap of $20.6 million; its shares were traded at around $2.02 with and P/S ratio of 2.4.
Highlight of Business Operations:
For the nine months ended September 30, 2010, we had net income of $979,079, a $2,993,691 improvement when compared to the net loss of $2,014,612 during the first nine months of 2009. Total revenues for the first nine months of 2010 were $8,200,022, an increase of $3,419,739 or 71.5% from the total revenues of $4,780,283 during the period in 2009. This increase in revenues was mainly the result higher turnkey drilling revenues due to an increase in the number of wells drilled during the period. For the quarter ended September 30, 2010, our net income was $276,200, a $1,105,025 improvement compared to a net loss of $828,825 during the same period in 2009, also the result of higher turnkey drilling revenues.In the first nine months of 2010, revenues from oil and gas production decreased $91,728 or 4.3% to $2,043,693 from 2009 revenues of $2,135,421, due to lower oil and natural gas production. The net sales volume of natural gas for the nine months ended September 30, 2010, was approximately 378,172 Mcf with an average price of $4.47 per Mcf, versus 460,675 Mcf with an average price of $3.96 per Mcf for the first nine months of 2009. This represents a decrease in net sales volume of 82,503 Mcf or 17.9%, mainly due to the natural declines in production from existing wells. For the quarter ended September 30, 2010, we produced 129,020 Mcf with an average price of $3.92 per Mcf versus 137,885 Mcf produced during the same quarter in 2009 with an average price of $3.94 per Mcf, which represents a 8,865 Mcf or 6.4% decrease in net sales volume. The net sales volume for oil and condensate (natural gas liquids) was 5,042 barrels with an average price of $70.26 per barrel for the first nine months of 2010, compared to 6,403 barrels at an average price of $48.55 per barrel for the first nine months in 2009. This represents a decrease in net sales volume of 1,361 barrels, or 21.3%. For the third quarter of 2010, oil and condensate produced decreased 422 barrels, or 20.6%, from 2,045 barrels produced in 2009 to 1,623 barrels produced in the same period in 2010. This decrease was mainly due to the natural declines in production from existing wells.
For the nine months ended September 30, 2010, turnkey drilling revenues increased $3,420,282 or 155.1% to $5,625,535 from $2,205,253 during the same period in 2009. We also had a $971,034 or 108.7% increase in turnkey drilling and development costs to $1,864,420 in 2010 from $893,386 in 2009. In the third quarter of 2010, turnkey drilling revenues increased $1,251,092 or 316% from $395,879 during the period in 2009 to $1,646,971 in 2010. Also, during the third quarter in 2010, our turnkey drilling costs increased by $753,974 to $760,816 in 2010 from $6,842 in 2009. Turnkey drilling revenues increased due to a greater number of wells drilled in the first nine months of 2010 than in 2009. For the nine month ended September 30, 2010, we reached total depth on seven wells, while during the same period in 2009 we reached total depth on two wells. Turnkey drilling costs rose due to an increase in drilling activity during 2010, and the absence of drilling adjustments recognized in 2009. We anticipate drilling activity to continue in the next quarter as we have processed permits for several new wells, and expect to drill approximately four California wells during the fourth quarter of 2010 depending on the weather conditions.
General and administrative expenses increased by $203,690, or 7.6%, from $2,663,151 for the nine months ended September 30, 2009, to $2,866,841 for the period in 2010. Third quarter 2010 general and administrative expense increased $11,865, or 1.3% from $905,168 in 2009 compared to $917,033 in 2010. These increases were primarily due to increased employee related costs.
Legal and accounting expense decreased to $530,278 for the first nine months of 2010, compared to $657,281 for same period in 2009, a $127,003 or 19.3% decrease. This decrease during 2010 stems from increased legal fees incurred during the first two quarters of 2009 pertaining to the Pioneer litigation and our new credit facility. For the third quarter, legal and accounting expenses increased by $146,856, or 114% from $128,862 in 2009 to $275,718 in 2010. The increase in the third quarter s legal and accounting expense was the result of increased litigation costs relating to our National Fuel Corporation dispute.
At September 30, 2010, our accounts receivable totaled $1,629,668, compared to $2,493,108 at December 31, 2009, an $863,440 (34.6%) decrease, primarily due the receipt of tax refunds previously classified as other receivables. At September 30, 2010, our accounts payable and accrued expenses totaled $3,770,441, a decrease of $1,358,546 or 26.5% from the accounts payable at December 31, 2009, of $5,128,987, mainly due to paying down our accounts payable.
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