Regal Petroleum plc (“Regal” or “the Group”), the oil and gas exploration, development and production company, is pleased to announce its preliminary results for the year ended 31 December 2002 (“the financial period”).

 

Highlights during the financial period include:

 

• Successful flotation on AIM in September 2002 raising £10m via a placing of 16.7m shares at 60p per share
• Successful registration as an oil and gas producer in the Ukraine allowing Regal to proceed with its export programme
• Commencement of gas production in August 2002 from MEX3, producing on average 110,000 cubic meters of gas and 2 metric tonnes of condensate per day
• Drilling of Regal's first new well, GOL 2, was successfully completed in November 2002 (and commenced production in January 2003)
• Work over rigs installed on GOL 1 and SV10 during the fourth quarter 2002
• Drilling of new wells SV52 and MEX102 commenced in Q4 2002

 

Highlights post the financial year include:

 

• Four wells completed to date and a further 4 wells due to be completed by the end of 2003
• Construction of the 1st phase of Regal’s new gas processing plant completed, providing a capacity of 1,000,000 m3 per day
• Export programme progressing well with exports of gas due to commence in Q3 2003
• Acquisition of onshore oil & gas exploration and development license in North East Romania in February 2003
• Appointment of Guenter Nolte as Chief Executive Officer

 

Commenting on the results, Frank Timis, Chairman of Regal, said:

 

“2002 was an important year in creating the structure required for Regal to continue its rapid development. Significant progress has been made in the Ukraine with exports likely to commence in the next few months. Our strategy remains to identify other assets with similar potential and believe that we have the management team, the corporate structure and the necessary cash flow to deliver a year of considerable growth in 2003.”

 

JUNE 2003 TRADING UPDATE

 

Work-Over MEX3: Regal's first well continues production since being brought into production in August 2002.

 

New Well GOL2: Regal's second well continues production since being brought into production at the end of January 2003.

 

Work-Over GOL1: Regal's third well is now completed and is expected to commence commercial production by 25 June 2003.

 

Work-Over SV10: Regal's fourth well is now completed and will be connected for production once the new second phase gas plant has been completed (refer below).

 

New Well SV52: Regal's fifth well has been drilled to a depth of 4,674 metres and is expected to be completed in Q4 2003.

 

New Well MEX102: Regal's sixth well has been drilled to a depth of 3,829 metres and is expected to be completed in Q4 2003.

 

Other Wells: Two other wells have been identified for work-over and are expected to be completed in Q4 2003 bringing the total number of completed wells to 8 by the end of the year.

 

First Phase Gas Plant: During commissioning of GOL2 it became evident that there were capacity restrictions in the state owned gas processing and treatment plant and pipelines. Accordingly, the Directors made an immediate decision to fast track the construction of the Regal owned first phase gas plant and associated infrastructure. Construction commenced in April 2003 and is now complete and being commissioned in anticipation of being fully operational by 25 June 2003. This new plant enables production to be increased to 450,000m³ per day from 25 June 2003 until the construction of the new high capacity pipeline has been completed to enable maximum flow of gas from completed wells. The capacity of the plant is 1,000,000m³ per day. The new plant also enables Regal to have total control over the production of gas and condensate by removing the reliance on the state owned facilities.

 

Second Phase Gas Plant: The second phase of the gas plant referred to above is due to be completed by 31 December 2003. The capacity of the second phase plant will be 2,000,000m3 per day bringing total plant capacity to 3,000,000m³ per day. This will include the construction of a 17km high capacity pipeline connected from the new gas plant to the main gas export trunk pipeline to allow Regal to utilise current production and allow for future growth potential generated by drilling/work-over of new wells and by implementing advanced stimulations technology on existing wells (to optimise flow rates).

 

Exports: Regal expects to commence exporting gas in the third quarter 2003 which will increase the gas sales price to approximately US$90 per thousand cubic metres (an increase of over 60% compared with current domestic prices).

 

Suceava Block, Romania: The geological and geophysical data package is being prepared to assist the seismic and geochemical program which is due to commence in 2004.

 

For further information, please contact:

 

Regal Petroleum plc Tel: 020 7647 6622 
Frank Timis, Executive Chairman   
Glenn Featherby, Finance Director   

   
Buchanan Communications  Tel: 020 7466 5000 
Bobby Morse / Tim Thompson