Romgaz needs to invest its RON1.17 billion cash reserves to open new exploitations and boost natural gas output, now stalling. It may follow the lead of Poland’s biggest natural gas and oil producer, PGNiG, which plans to increase its daily output by 67% by 2022, by buying new leases in Europe, North America and Assia.
Romgaz, Romania’s largest natural gas producer, has no such ambitious. The company, with capitalization worth EUR3 billion, has exploited deposits concentrated in the area of Transylvania for almost one decade and its steps abroad have been shy.
Romgaz has recently asked the National Agency for Mineral Resources (ANRM) to extend some exploitation licenses, arguing new technologies will aid it exploit the deposits for another several years. Each cubic meter added or maintained in production is vital for Romgaz, whose annual output declined by almost 20% between 2003 and 2013.
At present, output has stabilized at 5.6 billion cubic meters. In the first nine months of 2014, output inched up by 0.7%.
Romgaz needs to make solid investments in exploring new areas, to bolster production, which needs to become the company’s new growth driver. Profit growth in the first nine month, to a record high of RON1.1 billion was largely due to the rising prices of natural gas.
The company’s cash also rose, to RON1.17 billion in late September 2014. Starting 2015, the price of gas destined to non-household consumers is completely deregulated.
“They have a lot of cash and, by calculations included in the public offering, they could support an even larger investment program from their own sources,” said Mihai Caruntu, head of financial analysis at BCR.
(English version by Catalina Apostoiu)