The Directors of Regal are pleased to announce that following successful negotiations Eurotech Services S.A. (“Eurotech”), a subsidiary of Regal, has reached agreement to increase its shareholding in Kavala Oil S.A. (“Kavala”) from 67 per cent. to 95 per cent.

Eurotech, a 86.11 per cent. subsidiary of Regal, has agreed to subscribe for new issued share capital in Kavala for a total consideration of 10 million Euros (such amount to be funded by a loan from Regal) thereby increasing its interest to 95 per cent. of the total issued capital of Kavala.  The remaining 5 per cent. of the issued share capital of Kavala is owned by an association of Kavala's employees.

Seismic Inversion Study: Regal is currently finalising the reprocessing of seismic data, the inversion of the reprocessed seismic and the volumetric study of the contingent resource in the Prinos Group basin, which includes the Kallirachi discovery.  It is expected that this report will be finalised in September 2004.

Infill Drilling: Kavala has commenced the drilling of its first infill well in the Prinos North field and it is expected that this well will be completed in September 2004.

The Directors intend to release a detailed Kavala operations update in September 2004.

Commenting on the increase in interest, Frank Timis, Chairman of Regal, said:

“The increase in ownership in Kavala is an important step in our strategy to create significant returns for our shareholders.  Considerable progress has been made in Greece over the past three months and we look forward to providing shareholders with a detailed appraisal of this progress next month when the studies have been completed.”

For further information, please contact:

Regal
Frank Timis, Executive Chairman 
Chris Phillips, Company Secretary 
Tel: 020 7408 9500 

Buchanan Communications 
Bobby Morse  
Tel: 020 7466 5000