Issue of Equity

Regal Petroleum PLC
27 February 2004

For Immediate Release                                          27 February 2004


                 Regal Petroleum plc ('Regal' or the 'Company')

     Placing of 13,333,334 new Ordinary Shares at a price of 300p per share
                                       
                     Notice of Extraordinary General Meeting


1.    Introduction and summary


The Board announces today that it has raised conditionally £37.5 million (net of
expenses) by way of a placing of 13,333,334 new Ordinary Shares at a price of
300p per share (the 'Placing Price'). The Placing is conditional, inter alia,
upon the Company obtaining approval from its Shareholders to disapply statutory
pre-emption rights and to grant the Board authority to allot the new Ordinary
Shares. The Placing, which has been jointly arranged by Evolution Beeson Gregory
and Canaccord Capital (Europe) Limited ('Canaccord') pursuant to the terms of
the Placing Agreement, is also conditional upon Admission and has been fully
underwritten by Evolution Beeson Gregory and Canaccord. The Placing proceeds
will be used to fund the working capital requirements of the Company, further
details of which are set out below.


2.    Background to and reasons for the Placing


2003 Placing

In October 2003, the Company acquired 86.11 per cent. of the entire issued share
capital of Eurotech S.A. and, consequently, the indirect ownership of 57.69 per
cent. of Kavala Oil S.A. ('Kavala') which has exclusive rights to develop,
exploit and operate oil fields in the North Aegean Sea. At the time of this
acquisition and in order to provide funds for the purposes of, inter alia,
developing Kavala's oil fields and the Company's existing assets, the Company
raised £24.15 million (net of expenses) by way of a placing of new Ordinary
Shares ('2003 Placing').


Developments in Greece

Following the 2003 Placing, the Company commissioned development and
exploitation studies of Kavala's Prinos, Prinos North and Epsilon fields. Regal
also successfully completed the drilling of an exploration well in the
Kallirachi exploration field and on 13 February 2004 announced the results of
its work programme for Kavala in the Trading Statement. The probable and
possible oil-in-place volume at Kallirachi is expected to be up to 650MMstb
(240MMstb recoverable).


Regal and Kavala are together preparing a six month programme of further
appraisal at the Kallirachi field to confirm the porosity, volatility, oil
saturation and existence of large sandstone reservoirs on the basin. Two
development/production wells are planned to be drilled in the third and fourth
quarters of 2004 with a view to preparing a feasibility study in the first half
of 2005 once Regal has achieved its production targets for the Prinos, Prinos
North and Epsilon fields. Subject to this feasibility study, Kavala will proceed
with the development of the Kallirachi field.


Kavala also intends to commence the construction of a new platform at the
Epsilon field in the third quarter of 2004 which will be connected to the
existing Prinos field production facilities. The intention is to drill a total
of six production wells with a view to realising a minimum daily production from
Epsilon of 13,000 barrels by July 2005.


Developments in Romania

In Romania, as announced by the Company on 3 December 2003, the Company was
awarded a new exclusive exploration, development and production licence for the
6,285km2 EV-2 Barlad Block by the National Agency for Mineral Resources of
Romania.


The Company proposes to perform seismic surveys on the Barlad Block during 2004
to reinterpret and assess additional data. Once the targets have been fully
defined and deemed appropriate, exploration wells will be drilled to determine
the presence, volume and characteristics of hydrocarbons.


Reasons for the Placing

The Directors believe that the proceeds of the Placing will enable the Company
to pursue further its development strategies in both Greece and Romania as
described above and in the Trading Statement of 13 February 2004.


3.     Current trading and prospects


Greece

Further to the Trading Statement of 13 February 2004, current daily production
from the Prinos and Prinos North fields is approximately 4,000bopd. Infill
drilling of four wells is due to commence in the second quarter of 2004 in the
unexploited newly discovered pools in the Prinos and Prinos North fields. In
addition, at least three submersible pumps are to be installed by the end of
2004. Daily production from the Prinos and Prinos North fields is expected to
increase to a minimum of 12,000bopd by January 2005.


Kavala intends to build a new platform at Epsilon during the third quarter of
2004 and to connect this new platform to the existing infrastructure at the
Prinos field production facilities. A total of six production wells are to be
drilled at Epsilon to realise a minimum daily production of 13,000 barrels by
July 2005.


Regal is expecting a minimum production of 25,000 bopd from the Kavala
operations by July 2005; being 12,000 bopd from the Prinos and Prinos North
fields and a further 13,000 bopd from the Epsilon field.


Ukraine

A total of six wells have been drilled or worked-over in Ukraine. Three of
these, GOL1, GOL2 and MEX3, are currently producing and a further two, SV10 and
MEX102, are expected to be producing during March 2004. When all of these wells
are producing, the total daily production rate is expected to be approximately
815,000m3 of gas or equivalent.


Following extensive testing on the GOL2 well, Regal performed a stimulation/
clean-out programme to stabilise production from this well.


Production well MEX102 was drilled to its target depth of 5,230 metres in
December 2003. Following delays in equipment delivery due to severe weather
conditions, the well has now been completed and is in the process of being
connected to the existing infrastructure.


Work-over well SV10 was completed in January 2004 and is ready to be connected
to the infrastructure.


Production well SV52 was drilled to its target depth of 5,400 metres in November
2003. Several gas bearing structures were identified, however, the well tested
at below the Company's expectations and further technical studies have
commenced.


In December 2003, the 13.2km export pipeline connecting Regal's gas processing
plant in Ukraine to the international export trunk line to Western Europe was
completed and connected. All of Regal's gas production is now being transported
through Regal's pipeline which has a capacity of four million m3/day.


The required documentation for the Production Licence application was submitted
in December 2003. The Directors expect that the Production Licence, which will
become necessary in the medium term as the production rates are increased, will
be granted in the first quarter of 2004. Regal intends to commence export sales
in the second quarter of 2004.


Romania

Following the award of the 4,103km2 Suceava Block in February 2003 and the
6,285km2 Barlad Block in December 2003, Regal has a total exploration,
development and production licence area in Romania of 10,388km2.


In accordance with the Suceava Block work programme, the digitising and
modelling of seismic and well log data together with the analysis of all of the
technical information has clearly defined five major leads (structures). In
2004, the Company intends to perform a new seismic programme which will be
followed by the drilling of appraisal/development/production wells.


The Company intends to undertake seismic surveys on the Barlad Block in the
second quarter of 2004 to obtain additional data. Once the structures on both
Blocks have been fully defined and deemed appropriate, exploration and
development/production wells will be drilled to determine the volume and
characteristics of hydrocarbons starting in the fourth quarter of 2004.


4.   The Placing

The Company proposes to raise approximately £37.5 million (net of expenses)
through the issue of the new Ordinary Shares at the Placing Price, which
represents a discount of 5.96 per cent. to the closing middle market price of
319p, of the Company's existing shares on 26 February 2004, being the last
practicable date prior to the publication of this document. The new Ordinary
Shares will represent 11.60 per cent. of the Company's issued share capital
immediately following Admission.


The Placing Agreement

Pursuant to the terms of the Placing Agreement, Evolution Beeson Gregory and
Canaccord have each conditionally agreed to use their respective reasonable
endeavours, as agents for the Company, to each place 6,666,667 of the New
Ordinary Shares with certain institutional and other investors. The Placing has
been fully underwritten by Evolution Beeson Gregory and Canaccord. The Placing
Agreement is conditional upon, inter alia, the Resolutions being duly passed at
the EGM and Admission becoming effective on or before 8.30 a.m. on 25 March 2004
(or such later date as the Company, Evolution Beeson Gregory and Canaccord may
agree, but in any event by no later than 30 April 2004).


The Placing Agreement contains warranties from the Company in favour of
Evolution Beeson Gregory and Canaccord in relation to, inter alia, the accuracy
of the information in this document and other matters relating to the Company
and its business. In addition, the Company has agreed to indemnify Evolution
Beeson Gregory and Canaccord in relation to certain liabilities they may incur
in respect of the Placing. Evolution Beeson Gregory and Canaccord each have the
right to terminate the Placing Agreement in certain circumstances prior to
Admission, in particular, in the event of a material breach of the warranties.


Settlement and dealings

Application will be made to the London Stock Exchange for the new Ordinary
Shares to be admitted to trading on AIM. It is expected that such Admission will
occur on 25 March 2004.


The New Ordinary Shares will, when issued, rank pari passu in all respects with
the existing Ordinary Shares of the Company including the right to receive
dividends and other distributions declared following Admission.


5.   Use of Proceeds

The Directors intend that the net proceeds of the Placing of £37.5 million will
be used to develop Regal's assets in Greece and Romania as follows:


1.         £10.0 million for the further development of the
Kallirachi field including the drilling of two development/production wells and
a detailed feasibility study;


2.         £17.0 million for the development of the Epsilon field
including the construction of a production platform and the drilling of six
production wells; and


3.         £10.5 million for additional seismic analysis and drilling
of wells on the second licence area in the Romanian gas field.


6.     Recommendation

The Directors consider the Placing to be in the best interests of the Company
and its Shareholders as a whole and accordingly unanimously recommend
Shareholders to vote in favour of the Resolutions to be proposed at the EGM as
they have irrevocably undertaken to do so in respect of their beneficial
holdings amounting, in aggregate, to 11,104,887 Existing Shares, representing
approximately 10.93 per cent. of the existing issued share capital of the
Company.


Placing Statistics

Placing Price                                                              300p
No. of Ordinary Shares being Placed on behalf of the Company        13,333,334
Proceeds receivable by the Company, net of expenses              £37.5 million
No. of Ordinary shares in issue following Admission                 114,935868
No. of new Ordinary shares as a percentage of the existing               13.12%
issued Share Capital

Expected Timetable

Extraordinary Meeting                                            10.00a.m. on 23
                                                                    March 2004
Admission and dealings in the new Ordinary Shares expected to     8.00a.m. on 25
commence on AIM                                                     March 2004
Expected date for CREST accounts to be credited                  25 March 2004
Expected date for posting of share certificates for new          By 2 April 2004
Ordinary Shares


For further information please contact:

Regal Petroleum                                                  020 7647 6622
Frank Timis, Chairman
Stephen West, Company Secretary

Evolution Beeson Gregory                                         020 7488 4040
Matt Sutcliffe
Tim Redfern

Canaccord Capital (Europe) Limited                               020 7518 7393
Toby Hayward

Buchanan Communications                                          020 7466 5000
Bobby Morse
Ben Willey







                      This information is provided by RNS
            The company news service from the London Stock Exchange