Agreement

Regal Petroleum PLC
09 August 2006



Immediate Release                                                  9 August 2006

                              REGAL PETROLEUM PLC
                                        
                           ('Regal' or the 'Company')


       Subscription and Services Agreement between Alberry Limited, Regal
                 Petroleum Corporation Limited and the Company

The Company is pleased to announce that it has entered into a conditional
agreement  (the 'Subscription and Services Agreement') with Alberry Limited
('Alberry'), a  company registered in the British Virgin Islands, pursuant to
which Alberry has  agreed to subscribe for new ordinary shares in Regal
Petroleum Corporation Limited  ('RPC'), representing 15 per cent. of the
enlarged share capital of RPC for a cash  consideration of £100,000 and has
agreed to provide certain services to the Company  in relation to its Ukrainian
assets.  RPC is a wholly owned indirect subsidiary of the  Company incorporated
in Jersey and is the holding company for Regal's Ukrainian  operations. 
Following this proposed transaction, the Company would retain an 85%  interest
in RPC.

Further to the announcement made to shareholders on 4 July 2006, the Board is
still in early stage discussions which may or may not lead to an offer being
made for the Company. Consequently, under the requirements of the City Code on
Takeovers and Mergers, completion of the Subscription and Services Agreement and
implementation of the transaction, is subject, inter alia, to shareholder
approval and the Company will shortly be posting a circular and notice of
Extraordinary General Meeting ('EGM') to shareholders. A detailed summary of the
terms of the Subscription and Services Agreement will appear in the circular,
copies of which shall be obtainable from the Company's website:
www.regalpetroleum.com.

The terms of the Subscription and Services Agreement, inter alia, provide that:
     
1.   Alberry shall use its best endeavours to procure that the Company has and 
     shall continue to have the benefit of the production licences in relation 
     to the GOL/MEX and SV fields (the 'Licences'), that the Licences are and 
     remain recognised as valid by all relevant authorities in the Ukraine and 
     that the Company is able and continues to be able to exploit the Licences 
     without interference.

2.   Alberry will be responsible for liaising with all relevant Ukrainian 
     authorities on behalf of the Company in order to establish the validity of 
     the Licences.

3.   On or within 90 days of the first anniversary of completion of the 
     Subscription and Services Agreement, Alberry is required to demonstrate 
     that the Licences are and shall remain valid by delivering evidence that a 
     valid, effective and final judgement has been entered in favour of the
     Company by the Ukrainian courts confirming that the Licences are valid and 
     a legal opinion from the Company's Ukrainian lawyers confirming, inter 
     alia, that the Licences are valid and that the judgement referred to above 
     is valid, effective and final.
     
4.   If, on or within 90 days of the first anniversary of completion of the 
     Subscription and Services Agreement, the Licences are demonstrated to be 
     valid, then the Company shall purchase the ordinary shares in RPC allotted 
     to Alberry under the Subscription and Services Agreement for a 
     consideration of $50,901,300 which may be satisfied in cash, by the issue 
     of new ordinary shares in the Company or a mixture of the two, at the 
     absolute discretion of the Company.
     
5.   Notwithstanding the foregoing in no event shall the number of new ordinary 
     shares in the Company to be allotted and issued to Alberry pursuant to the 
     Subscription and Services Agreement exceed a number that would result in 
     Alberry and any person acting in concert with Alberry (as defined in the 
     City Code on Takeovers and Mergers) being interested in, in excess of 29.99 
     per cent. of the issued ordinary share capital of the Company immediately 
     following such allotment and issue. 
     
6.   If however, Alberry fails to demonstrate that the Licences are valid, the 
     Company shall purchase the ordinary shares in RPC allotted to Alberry for a 
     consideration of £50,000, payable in cash.

Ukrainian update

The Company re-commenced production from its operations on the GOL/MEX and SV
fields in Ukraine on 1 August 2006. The Company is continuing its legal action
to establish the legality of its licences to operate the fields.

General

The Group through its operating subsidiaries is engaged in the development and
exploitation of the GOL/MEX and SV fields and the extraction of natural gas and
condensate. As published in the Audited Annual Report and Accounts 2005 of Regal
Petroleum plc, the profits attributable to the Group's Ukraine operations in the
financial year ended 31 December 2005 were $2,036,000 and the net asset value of
the Group's Ukrainian operations as at 31 December 2005 was $30,979,000.

None of the Company, its directors, officers and employees has or has had any
interest in the shares in the capital of Alberry.

Responsibility

The Directors of the Company accept responsibility for the information contained
in this statement.  To the best of their knowledge and belief (having taken all
reasonable care to ensure that such is the case), the information contained in
this statement is in accordance with the facts and does not omit anything likely
to affect the import of such information.

For further information, please contact:

Regal
Roger Phillips, Finance Director                          Tel: [phone]

Frank Scolaro, Non-Executive Director                     Tel: [phone]



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