RPT.L Regulatory News (RPT)

21 Nov 2007 07:01

Regal Petroleum PLC21 November 2007 Immediate Release 21 November 2007 REGAL PETROLEUM PLC ("Regal" or "the Company") Update Ukraine Partial Divestment The Company wishes to inform the market that the period of exclusivenegotiations entered into with MND Exploration and Production Limited ("MND") inSeptember 2007 has now come to an end without concluding an agreement in thetimetable set out in the Memorandum of Understanding between the parties. TheCompany is however pleased to announce that it has entered into a Memorandum ofUnderstanding (the "Shell Memorandum of Understanding") with Shell Exploration &Production Ukraine Investments (1) BV ("Shell"). The Shell Memorandum of Understanding sets out the proposed outline terms for aproposed transaction with Shell relating to the acquisition by Shell of a 51%interest in Regal Petroleum (Jersey) Limited, a wholly owned subsidiary of Regaland indirectly the holder of the licences for the Mekhediviska-Golotvschinska("MEX-GOL") and Svyrydivske ("SV") gas and condensate fields in Ukraine. TheShell Memorandum of Understanding provides that if the transaction is concludedShell will pay a total of US$410,000,000, made up of US$50,000,000 as a cashconsideration to Regal for the transfer of 51% of the share capital of RegalPetroleum (Jersey) Limited and the first US$360,000,000 of the total capitalexpenditure in the development of the MEX-GOL and SV fields. The terms of the Shell Memorandum of Understanding allow the Company and Shellto conduct due diligence and negotiate transaction documentation during an 8week period on an exclusive basis, but it must be stressed however that, save inrespect of certain matters, the Shell Memorandum of Understanding is non-bindingand conditional upon due diligence and the execution of transactiondocumentation. In addition, save as set out herein, the terms of the ShellMemorandum of Understanding remain confidential. Regal's Chairman, Francesco Scolaro, commented that "The interest of Shelldemonstrates the underlying value of our assets in Ukraine and further underpinsthe future potential in these assets and in the Company. The offer from Shellimproves on that previously made by MND and I am delighted with the efforts ofthe management to deliver value and I have every confidence in the Company inthe future." Neil Ritson, Chief Executive Officer, said; "We look forward to working withShell since their commercial and technical skills will greatly assist inaccelerating the field development work we have already started." The Company would like to stress that the signing of the Shell Memorandum ofUnderstanding does not imply that any transaction is certain to occur or thatthe proposed transaction will reach completion. For further information, please contact: Regal Tel: 020 7408 9500 Neil Ritson, Chief Executive OfficerFrancesco Scolaro, Chairman Evolution Securities Tel: 020 7071 4300Robert CollinsTim Redfern Mirabaud Securities Tel: 020 7321 2508Pav Sanghera Buchanan Communications Tel: 020 7466 5000Bobby MorseBen Willey This information is provided by RNS The company news service from the London Stock Exchange