Royale Energy, Inc. (NASDAQ:ROYL) Down 5.57% Despite Announcing Plans to Increase Production
Northern, WI 06/13/2013 (GDPInsider) – Royale Energy, Inc. (NASDAQ:ROYL) is down 5.57 in trading after starting the day at 2.89, 0.02 cent above its previous close of 2.87. Despite this moderately positive start, ROYL traded down for much of the day, closing down 5.57 or a decline of 0.16 cents. The stock had a trading range of 2.71 and 2.97 meaning that investors at some point were able to realize some level of net intraday gains. Volume was 779,038, an increase upon its average volume of 598,172.
ROYL is an independent oil and natural gas producer which operates two main segments. Segment one deals with marketing direct working interests (DWI), and segment two deals producing and selling oil and gas.
On May 28, 2013 ROYL announced that it had signed an agreement with Rampart Energy Ltd of Australia (RTD.AX) for the development of a portion of Royale’s Alaska North Slope property. Under the terms of the agreement Rampart is set to earn up to 75% Working Interest in Royale’s Western and Central acreage position, upon completion of a work program that includes seismic and drilling commitments.
Investors were reasonable happy with this news and the development helped ROYL to climb in market valuation, reaching a high of 3.69. Since then, however, trading in ROYL has been lacklustre with much of those gains being reversed.
ROYL was perhaps hoping to spike a fresh rally when it announced news that it had a gas discovery at its Zodiac well. According to ROYL, The new natural gas well was drilled on the company’s proprietary 3-D seismic data and encountered up to three productive formations. ROYL added further that the first zone has been completed and tested with a flow rate of over 1,000,000 cubic ft. per day and the company plans to begin production at 700,000 cubic ft. per day.
Despite this fresh news and rather promising news, market valuation remained sluggish and the stock has continued into its recent downtrend.
The good news is that RSI is pretty much neutral at 49.48 and the current downtrend has not shown much signs of passing through ROYL’s lower support levels.
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