Regal Petroleum has acquired Prom-Enerho Produkt (PEP).
The oil and gas exploration and production group made the move as it signaled the termination of its security arrangements and banking facilities with PJSC Unex Bank in Ukraine.
Regal has a number of bank accounts with Unex, which is ultimately controlled by Mr Vadim Novinskiy, who also controls an indirect 54% majority shareholding in the company.
A company spokesperson said it “was envisaged that there would be a material reduction in the funds held with Unex by the end of 2015”.
However, requests to reduce the cash hold were not acted on, according to Regal. The company has about $12.4million in Unex. Its takeover of PEP totals $12.3million.
Regal will use its cash kept at Unex to pay for the deal.
PEP holds a production licence over the Vasyschevskoye gas and condensate field, which also includes the Vvdenska prospect, located in the Dnieper-Donets basin in the north-east of Ukraine. The production licence was granted in August 2012 with a duration of 20 years, and is in respect of a 100% interest in the licence.
Regal’s independent report in to the prospect’s recoverables pegs them at 1.80 MMboe 2P proved and probable reserves.