RPT.L Regulatory News (RPT)

18 May 2005 07:01

Regal Petroleum PLC18 May 2005 Immediate Release 18 May 2005 REGAL PETROLEUM PLC ("Regal" or "the Company") Testing Completed on Second Kallirachi Well, Greece The Directors announce that Kavala Oil S.A. ("Kavala") has completed the testingof four prospective reservoirs identified in the Kallirachi-2 appraisal wellwith light hydrocarbon shows, good reservoir pressure and porosity. Hydrocarbonswere flowed to surface, however, due to low permeability the flow rates from thewell were deemed non-commercial. Drilling: The Kallirachi-2 appraisal well was drilled to a depth of 2,978. Thewell intersected four prospective reservoirs in the Upper Miocene level: 1. the evaporatic zone: 1,540-2,090 metres consisting of four distinct layers of evaporates; 2. the Kavala gas sands equivalent zone: 2,090-2,420 metres consisting of interbedded sandstone and claystone; 3. the Prinos equivalent zone: 2,420-2,578 metres consisting of thin sandstone and siltstone layers between distinct shaly intervals; and 4. the dolomatic zone: 2,578-2,978 metres consisting of interbedded sandstone, hard dolomite and claystone. Testing: intervals in all four of the prospective reservoirs were tested and alltests were completed by 16 May 2005 with limited hydrocarbon shows in all butthe evaporatic zone. The well tests confirmed good reservoir pressure andporosity but low permeability. Gas and oil (42.5 API) were flowed to surfaceduring the well test at rates of 30 barrels of oil per day and 145,000 cubicfeet of gas per day. Due to the low permeability, the flow rates achieved fromthe well were minimal and deemed to be non-commercial. The Kallirachi-2 well is interpreted as being in a less than optimal position inthe basin. The location of the Kallirachi-2 well was determined afterinterpretation of existing 3D seismic data over the area and the results of theKallirachi-1 well (completed in January 2004). The Company believes that the confirmation of the presence of hydrocarbons, goodreservoir pressure and porosity indicates that unexploited hydrocarbons remainin the basin. Further Work: it is now planned to complete a detailed analysis of theKallirachi-2 well results, in conjunction with the existing results from 3Dseismic interpretation and the Kallirachi-1 well test, in order to target newwell locations with higher permeability. It is expected that this work programmewill take approximately six to nine months to complete. The costs of the work programme and the further exploration/appraisal drillingwill be funded from projected future cashflows from Kavala together with the £15million allocated from the recent placing. Kavala is a private company incorporated in Greece in which Regal has anindirect 94.84 per cent. interest. Commenting on the results of the Kallirachi-2 appraisal well, Frank Timis,Executive Chairman, said: "Although the Kallirachi-2 appraisal well did not produce hydrocarbons at acommercial rate it did confirm the presence of hydrocarbons in the basin. Weremain confident that additional reserves can be identified in Kavala byutilising the results of the Kallirachi-2 well in conjunction with existingseismic and well data." 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