RPT.L Regulatory News (RPT)

25 Apr 2005 17:58

Regal Petroleum PLC25 April 2005 Immediate Release 25 April 2005 REGAL PETROLEUM PLC ("Regal" or the "Company") Placing of 11,500,000 New Ordinary Shares 1. Introduction and summary The Directors of Regal today announce that the Company has raised £44,850,000(before expenses) by way of a placing of 11,500,000 ordinary shares of 5 penceeach ("Ordinary Shares") at a price of 390p per share (the "Placing"). ThePlacing proceeds will be used to fund the working capital requirements of theCompany, further details of which are set out below. 2. Background to and reasons for the placing BackgroundDuring late 2004 and the current year to date the Company has completedsuccessful exploration drilling and testing in the Suceava licence in Romaniaand has completed the drilling of the second appraisal well in the GreaterKallirachi Area in Greece, with the testing of this well still in progress. The Suceava exploration well in Romania resulted in a significant dry gasdiscovery. Current Regal mapping indicates a recoverable gas resource in theSuceava licence of up to 3.8 trillion cubic feet (684 million barrels of oilequivalent). It is the Company's intention to drill a series of shallow, lowcost appraisal/development wells in 2005 and 2006. In conjunction with the drilling in Romania, the Company intends to drillfurther appraisal/development wells in Kavala, Greece, with the number of wellsdepending on the impending test results of the Kallirachi-2 appraisal well. Inaddition, the Company intends to drill two exploration wells in the Egyptconcession area in 2005 and 2006. The Ukraine operations continue to be profitable and generate positive cash flowand accordingly all current projected working capital requirements for Ukraineare expected to be funded from this positive cash flow. Reasons for the PlacingThe Directors believe that the proceeds of the Placing will enable the Companyto aggressively pursue its exploration, appraisal and development strategies inRomania, Greece and Egypt as described above. 3. Current trading and prospects Please refer to the separate trading update released by the Company on 25 April2005. 4. The Placing The Company has today entered into a placing agreement with Evolution SecuritiesLimited ("Evolution"), pursuant to which, Evolution has agreed to use itsreasonable endeavours to procure placees for an aggregate of 11,500,000 newOrdinary Shares ("Placing Shares") at a price of 390p per share ("PlacingPrice"), or failing which, to subscribe itself, as principal, for such shares.The Placing Price represents a discount of 3.11 per cent. to the closing middlemarket price of 402.5p of an existing Ordinary Share on 22 April 2005, being thelatest practicable date prior to the release of this announcement. The PlacingShares will represent 8.95 per cent. of the Company's issued capital immediatelyfollowing completion of the Placing. Disapplication of statutory pre-emptive rightsAt the Company's annual general meeting of shareholders held on 10 June 2004,the Directors were given authority to allot new Ordinary Shares for cash on anon pre-emptive basis up to an aggregate nominal amount of £577,180, equating to11,543,600 new Ordinary Shares. Prior to the Placing, none of this authority hadbeen utilised. Settlement and dealingsApplication will be made to the London Stock Exchange for the Placing Shares tobe admitted to trading on AiM ("Admission"). It is expected that Admission willoccur, and dealings in the Placing Shares begin, at 8.00a.m. on 29 April 2005. The Placing Shares will, when issued, rank pari passu in all respects with theexisting Ordinary Shares in issue, including the right to receive dividends andother distributions declared following Admission. 5. Use of Proceeds The Directors intend that the net proceeds of the Placing of approximately £42.6million will be used to develop Regal's assets in Romania, Greece and Egypt asfollows: a. £20.0 million for the drilling of up to twelve appraisal/development wells in the Suceava and Barlad licences in Romania;b. £15.0 million for the drilling of further appraisal/development wells in Kavala, Greece;c. £4.0 million for the drilling of two exploration wells in the Egypt concession area; andd. £3.6 million for additional working capital requirements. 6. Placing statistics Placing price 390p Number of Ordinary Shares being placed 11,500,000 Net proceeds receivable by the Company £42.6 million Number of Ordinary Shares in issue following Admission 128,508,201 Number of new Ordinary Shares as a percentage of theexisting issued share capital 8.95% Commenting on the Placing Frank Timis, Executive Chairman, said: "The additional working capital will fund the Company's aggressive programme ofmaturing and exploiting the resources base of the Company to deliver significantreserves, particularly in Romania, Greece and Egypt". 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