Corporate Activities

31 Jan 2005 14:44

Regal Petroleum PLC31 January 2005 Immediate Release 31 January 2005 REGAL PETROLEUM PLC ("Regal" or "the Company") Corporate Activities The Directors are pleased to announce the following update on recent corporateactivities by the Company: Greece: Regal has increased its interest in Kavala Oil S.A. ("Kavala") to 95 percent. of the entire issued share capital. The increase in interest was achievedby successfully negotiating the purchase of the remaining 13.89 per cent.minority shareholding in Eurotech Services S.A. ("Eurotech") for a totalconsideration of €892,000. Eurotech is now a 100 per cent. subsidiary of Regal. The remaining 5 per cent. of the issued share capital of Kavala is owned by anAssociation of Kavala's employees. It has been Regal's intention to buy out the minority shareholders in Eurotechsince the initial acquisition of the majority shareholding in Eurotech inOctober 2003 ("Original Acquisition"). The purchase price paid for the minorityshareholding was equivalent to the price per share paid in the OriginalAcquisition. Romania: Regal's licence for the 6,285km2 Barlad Block has been formallyapproved by the Romanian Government. The exploration, development and production licence is for a 20 year term andprovides Regal with exclusive hydrocarbon exploration, development andproduction rights over the Barlad Block area. Under the terms of the licenceRegal is committed to 1,000km of 2D seismic and the drilling of two wells (to amaximum depth of 1,500m) over a 3 year period with an estimated total cost ofUS$4.5 million. The Barlad Block (a south-eastern extension of Regal's 4,103km2 Suceava Block)is located adjacent to the Roman-Secuieni gas field operated by Romgaz, thelargest commercial gas field in Romania. It is proposed to perform seismic surveys on the Barlad Block in 2005 withexploration drilling due to commence in 2006. Egypt: The final assignment to Regal of the exploration concession in the EastRas Budran Area, Gulf of Suez, Egypt has been formally approved by the EgyptianGovernment. The Egyptian concession provides Regal with exclusive exploration rights in theEast Ras Budran Area for an inital period of 3 years with the right to extendthis for a further 4 years. In the event that a commercial oil discovery ismade in the concession area, Regal has the right (subject to certain conditions)to convert the concession into a 20 year development and production lease. Underthe terms of the concession Regal is committed to spending a total of US$4million during the exploration stage. Four large prospective structures have been identified following the evaluationof existing data. Seismic data is currently being re-processed and interpretedand exploration drilling is expected to commence in late 2005. The concession area is in one of the most prolific petroleum provinces in theworld. Surrounding oil fields include Ras Budran, October, Abu Rudeis, BelayimOnshore and Belayim Offshore, which range from 270 million barrels to over onebillion barrels of recoverable reserves. Operational Update: an update on Regal's operations, including details ondrilling and production, will be released in February 2005. Frank Timis, Executive Chairman, commented: "The increase and consolidation of our shareholding in Kavala to 95 per cent. isthe final step in our strategy to increase the Company's interest in the Kavalaoperations so as to realise maximum value from any future increases in reservesand production. Furthermore, the formal government approval of our interests inRomania and Egypt provides the Company with several other exciting explorationplays in countries with prolific hydrocarbon basins. " 31 January 2005 For further information, please contact: Regal Tel: 020 7408 9500Frank Timis, Executive ChairmanRoger Phillips, Finance Director Buchanan Communications Tel: 020 7466 5000Bobby Morse / Ben Willey This information is provided by RNS The company news service from the London Stock Exchange