The Company is pleased to announce that following the competitive partial divestment process run by Tristone Capital Limited on the Company’s behalf in relation to the Mekhediviska-Golotvschinska (“MEX-GOL”) and Svyrydivske (“SV”) gas and condensate fields in Ukraine, Regal has entered into an exclusive Memorandum of Understanding (“MOU”) with the private oil and gas company, MND Exploration and Production Limited (“MND”).  Under the terms of the proposed transaction, which is for a 50% interest in the Ukrainian production assets, KKCG Oil and Gas BV, MND’s holding company in The Netherlands, will invest a total US$330,000,000 in the development of the MEX-GOL and SV fields.

udited proven and probable reserves in the MEX-GOL and SV fields are currently estimated to be 169 mmboe (RyderScott, 2005) and it is envisaged that development will require the drilling of a significant number of development wells in order to achieve projected peak production rates and recovery of these reserves.

The terms of the MOU allow the Company and MND to conduct due diligence and negotiate transaction documentation on an exclusive basis, but it must be stressed however that, save in respect of certain matters, the MOU is non-binding and conditional upon due diligence and the execution of transaction documentation.  In addition, save as set out herein, the terms of the MOU remain confidential.

Regal’s Chief Executive Officer, Neil Ritson, said: “The Regal assets in Ukraine have attracted considerable interest from bidders and we are delighted that the proposed deal with MND will provide an immediate acceleration of activity and sustained investment. Having considered the merits of the proposals from all bidders covering a diverse range of capabilities we strongly believe that MND offers the best opportunity to realise shareholder value in our Ukrainian assets.  MND has excellent technical and operational expertise and we feel confident that working together in a jointly operated venture, Regal and MND, will create the greatest project value.”

The Company would like to stress that the signing of the MOU does not imply that any transaction is certain to occur or that the proposed transaction will reach completion.

For further information, please contact:

Regal Tel: 020 7408 9500
Neil Ritson, Chief Executive Officer 
Frank Scolaro, Chairman 

Evolution Securities Tel: 020 7071 4300
Robert Collins 

Mirabaud Securities Tel: 020 7321 2508
Pav Sanghera 

Buchanan Communications Tel: 020 7466 5000
Bobby Morse 
Ben Willey 

Definitions:

mmboe  million barrels of oil equivalent
boe       barrels of oil equivalent

In accordance with the guidelines of the AIM market of the London Stock Exchange, Neil Ritson BSc (Hons) Geophysics, FGS, Chief Executive Officer of Regal Petroleum plc, is the qualified person that has reviewed the technical information contained in this press release.

Further information on Regal and MND can be found on their respective websites as follows:-

Regal - www.regalpetroleum.co.uk

MND - www.mnd-uk.com