Conditional Placing

Regal Petroleum PLC
24 January 2008



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

                       Conditional Placing of New Shares

Regal Petroleum plc, the independent oil & gas exploration and production
company, today announces that it has conditionally placed (the 'Placing') new
ordinary shares of 5p each in the capital of the Company (the 'Placing Shares')
in order to raise approximately £84 million (before expenses). The Company also
announces the appointment, with immediate effect, of Strand Partners Limited as
its new Nominated Adviser ('Nomad').

Highlights

•        Subject to shareholder approval, Regal will issue 56,440,000 Placing
Shares at a price of £1.50 (the 'Placing Price'), raising (after deduction of
expenses) approximately £80 million.

•        The Placing Shares represent 39.5% of the existing issued share capital
of the Company. On admission of the Placing Shares to trading on AIM, there will
be 199,468,824 ordinary shares of 5p each ('Ordinary Shares') in issue, valuing
the issued share capital of Regal at £299.2m at the Placing Price.

•        The net proceeds of the Placing will be used, primarily, to fund the
exploitation and development of the Group's Ukrainian assets and provide
additional working capital to the Company.

•        The Placing Shares have been conditionally placed with institutional
investors.  Admission and dealings in the Placing Shares on AIM are expected to
commence on 22 February 2008, subject to shareholder approval at a general
meeting of the Company to take place on 19 February 2008.

•        Regal has been notified by the London Stock Exchange, that following an
investigation it intends to refer a case regarding alleged breaches by Regal of
the AIM Rules to the AIM Disciplinary Committee.  Further details of this matter
appear in paragraph 4 of this announcement.

•        The Company is pleased to announce the appointment of Strand Partners
Limited ('Strand Partners') as its new Nomad. Mirabaud Securities Limited
('Mirabaud') will continue in its capacity as the Company's broker.

•        A circular, convening a general meeting for 19 February 2008 to seek
shareholder approval for the Placing, will be posted to Shareholders as soon as
possible.



David J Greer OBE, Regal's Chairman and Chief Executive Officer, commented:

'I am delighted with the response of investors to our proposed placing. To have
received commitments considerably in excess of our requirements in current
market conditions is a testament to the quality of our asset base and the
strategy in place to exploit it. I look forward to reporting back to
shareholders on our progress in the coming months.'

'I would like to welcome Strand Partners as our new Nomad and I would like to
thank both Strand Partners and Mirabaud for their support during the successful
placing.'


Contacts:

Regal                                                       Tel: [phone]
David J Greer, Chairman & Chief Executive Officer

Strand Partners Limited                                     Tel: [phone]
Simon Raggett
Rory Murphy

Mirabaud Securities                                         Tel: [phone]
Peter Krens

Citigate Dewe Rogerson                                      Tel: [phone]
Martin Jackson
Scott Fulton



              Placing of New Shares and Notice of General Meeting

1.         Introduction and summary

The Company proposes to raise approximately £84 million (before expenses) by way
of a conditional placing (the 'Placing') of 56,440,000 ordinary shares of 5p
each (the 'Placing Shares') at a price of £1.50 per share (the 'Placing Price').
The net proceeds of the Placing will be used, primarily, to fund the
exploitation and development of the Group's Ukrainian assets and also to provide
additional working capital to the Company.

The Placing Shares have been conditionally placed with institutional investors.
Subject, inter alia, to the passing of the resolutions to be proposed at a
general meeting to take place on 19 February 2008 (the 'General Meeting'),
admission and dealings in the Placing Shares on AIM are expected to commence on
22 February 2008.

The Placing is conditional, inter alia, upon shareholders passing the
resolutions to be proposed at the General Meeting.

2.         Background to and reasons for the Placing

The Group's most significant assets are the gas and condensate fields at
Svyrydivske ('SV') and Mekhediviska-Golotvschinska ('MEX-GOL'), Ukraine (the
'Fields').  During the course of 2007, the Company has been planning the further
development and exploitation of the Fields.  In March 2007 the Company appointed
Tristone Capital Limited ('Tristone'), a specialist global energy advisory firm,
to carry out a review of the strategic options available to Regal in respect of
the further development and exploitation of the Fields.  Following the
conclusion of that study, Tristone was engaged by Regal to advise on the partial
divestment of an interest in the Fields, and a competitive bid process began in
April 2007.

Following the conclusion of that process KKCG Oil & Gas B.V. ('KKCG') became the
preferred bidder and on 14 September 2007 the Company announced that an
exclusive memorandum of understanding had been entered into with MND Exploration
and Production Limited (the UK subsidiary of KKCG) whereby KKCG would invest
US$310 million in the development of the Fields and pay $20 million to Regal in
return for a 50% interest in Regal Petroleum (Jersey) Limited ('RPJ').
Following the expiration of the exclusivity period, it was announced on 21
November 2007 that the Company had entered into an exclusive memorandum of
understanding with Shell Exploration & Production Ukraine Investments (1) BV
('Shell').  The proposed outline terms for that transaction were that Shell
would acquire a 51% interest in RPJ in return for investing a total of US$360
million in the development of the Fields and the payment of $50 million to
Regal.  On 26 November 2007, the Company announced that it had received notice
of termination of the Memorandum of Understanding between the Company and Shell.
The Company now intends to fund the proposed further development and
exploitation of the Fields as detailed in this announcement, from the proceeds
of the Placing.

The Company intends to increase and accelerate the exploitation and development
of the Fields through improved reservoir delineation through the use of new 3D
seismic data (including a 3D seismic survey of the SV field which has recently
commenced) and the use of modern well engineering, workovers, stimulation and
production practices.  The Company is developing a full field development plan
for the Fields which envisages the drilling of approximately 60 wells (including
vertical and multi-lateral wells) and the construction of new gas treatment
facilities and flowlines.

In order to implement the development and exploitation of the Fields, the
Company has recruited a management team of experienced oil and gas industry
professionals with strong technical skills.

3.         The Ukrainian Assets

The Group's Ukrainian assets comprise the Fields, which are located in the
Dnieper-Donets sedimentary basin.  The gas condensate Fields are made up of
eleven mapped gas bearing horizons, up to 19 metres thick, from 4,700 to 6,000
metres below surface.

Lower Carboniferous reservoirs form the main gas bearing horizons.  The gross
interval reaches a thickness of 800 to 1,000 metres within the Fields.  Due
predominantly to the depth of burial, the reservoirs have moderate porosity and
low permeability.  Despite this, a number of the exploration wells and appraisal
wells which have been drilled have demonstrated encouraging production rates on
test.

The published proved and probable reserves of the Fields as at 31 December 2006
were 810,400 MMscf of gas and 25,009 Mbbls of condensate (169,410 Mboe).  The
most recent reserves audit was conducted by Ryder Scott in 2005 and is the basis
for these published proved and probable reserves.  A copy of the reserves report
prepared by Ryder Scott is published on the Company's website -
www.regalpetroleum.co.uk.

The Group owns and operates its own gas and condensate treatment plant, which
has a processing capacity of approximately 700,000 cubic metres per day of gas
and 200 cubic metres per day of condensate.

The Group also owns a 13.2 kilometre long, 325 mm pipeline connecting the gas
and condensate plant to the main Kursk-Kiev export trunk pipeline and bypassing
the local gas distribution network by tying into the international Majestral gas
trunk line.  The pipeline has a capacity of 1,500,000 cubic metres per day.

4.         Operational and Trading Update

Ukraine (100% working interest)

The Company's average production for the six month period to 31 December 2007
was 5.32 MMscfd and 275 barrels of condensate per day (equivalent to 1,222
boepd).  This was from the five wells in production during that six month
period: GOL-1, GOL-2, MEX-3, MEX-102 and SV-10.

Operations have remained cash flow positive and profitable throughout the course
of 2007.

In the second half of 2007, gas prices achieved by the Company have been almost
constant with an average price of $4.04 per Mscf, an increase of approximately
32% over the same period in 2006.  On 5 December 2007, it was announced by the
Ukrainian Government that an agreement had been reached between Russia and
Ukraine whereby, commencing during 2008, Ukraine will pay Russia $5.08 per Mscf
compared to the current levels of $3.68 per Mscf.  This is an increase of 38% on
the prices for 2007.  Historically an increase in importation prices has led to
a similar increase in the price caps set by the Ukrainian Government for the
sale of gas within Ukraine.

The average condensate sales price achieved by the Company for the six month
period to 31 December 2007 was approximately $74 per barrel compared to $55 per
barrel in the first half of 2007.  The average realised price achieved by the
Company in December 2007 was approximately $87 per barrel.

The Company signed a contract with Chernihivnaftagasgeologia ('CNGG') for the
drilling of the MEX-103 production well in late July 2007 with drilling
commencing in early October 2007.  The well had reached 3,700 metres on 31
December 2007 and drilling continues as planned.  The well is due to be
completed in October 2008.

Six other production wells are in the process of being permitted and preliminary
discussions have been initiated with a number of drilling companies able to
provide equipment and services.  The drilling of further wells is planned to
commence in mid 2008.  Additionally, Regal is considering methods to prolong
production from its existing production wells and has recently completed a
production logging programme with a view to working over some of these wells.

A 3D seismic survey covering approximately 100 square kilometres of the MEX-GOL
licence area was completed in late May 2007 and the processing of this data is
due to be completed by February 2008.  This information will assist with an
improved understanding of sub-surface geology leading to more informed placement
of new wells and a better understanding of reserve estimates.

In addition, the Company has engaged Ukrgeophysica to undertake a 100 square
kilometre 3D seismic survey of the SV field.  The seismic acquisition for this
survey has recently commenced and is expected to take approximately 4 to 5
months to complete.  This will conclude the complete 3D coverage of the MEX-GOL
and SV licences.

Romania

Barlad Block (100% working interest)

On 13 December 2007, the Company announced that the initial flow testing of
Regal's first exploration well, RBN-4, on the Barlad Concession in Romania, had
resulted in a maximum flow rate of dry gas at a rate of 3.74 MMscfd on a 12mm
choke with a flowing tubing head pressure of 49 bar over a 24 hour flow period.
A 4.6 metre interval, between 756.7 metres and 761.3 metres, was perforated and
tested and there was minimal water production in the test.  A second interval of
12.7 metres, between 543.3 metres and 556.0 metres was flow tested but
hydrocarbons were not present.  This well was completed to a total depth of 973
metres TVD into the Sarmatian formation.

The RBN-4 well has now been suspended to allow re-entry to the lower producing
interval and the Company is currently evaluating the results of the well.

In addition, the Company drilled a second planned exploration well, RBN-3, on
the Barlad Concession.  This well was drilled to a total depth of 1,116 metres
but, after logging, it was considered that no commercial hydrocarbons were
present and the well was plugged and abandoned.  This well was located
approximately 17 kilometres to the northwest of the RBN-4 well and was intended
to evaluate primary targets in the Sarmatian formation and a secondary target in
the Eocene formation.

Suceava Block (50% working interest)

During 2007, the Company's farm-in partner, Aurelian Oil and Gas Plc  ('Aurelian
'), acquired 160 kilometres of 2D seismic data in the block and drilled an
exploration well, Dornesti Sud-1, which was intended to target reservoirs in the
Sarmatian formation.  This well encountered a gas bearing zone in the Sarmatian
formation and flow testing of a 12.5 metre interval, from 531.8 metres to 544.3
metres, produced gas at an average rate of 24,840 Sm3d (876 Mscfd) with a
flowing wellhead pressure of 32 bar (464 psi) on a 12mm choke over an 8 hour
main flow period.

The Dornesti Sud-1 well was drilled to a total depth of 910 metres and
encountered gas in the interval 528 metres to 545 metres. This section, which
consists of sandstones interbedded with siltstones and claystones, was
interpreted to be gas bearing on evaluation with electrical logs.   The well has
been completed as a production well and it is now planned to tie it in during
2008 to the Bilca Gas Plant, operated by Aurelian on its adjacent Brodina Block
EIII-1 concession.

A second exploration well may be drilled in the first half of 2008, once the
results of the first well have been evaluated.  If such a well is approved by
each of Aurelian and Regal, the Company will be required to fund its own share
(50%) of the well costs.

Egypt (25% working interest)

The Company holds a 25% interest in the East Ras Budran Concession in the Gulf
of Suez with its partner, Apache Khalda Corporation LDC ('Apache'), which holds
the remaining 75% interest.

In early 2007 Apache, as Concession operator, acquired a 3D seismic survey over
the central portion of the Concession. The resulting 3D seismic data has been
processed and interpreted. The first of two exploration wells, ERB-A-1X, was
spudded in June 2007 and this well reached its target depth 13,615 feet MD
(11,921 feet TVD), including a 1,000 foot near horizontal section, and was
subsequently flow tested.  The well was opened for a 12 hour period and produced
at an average rate of 1,901 bopd from the target Darat Limestone.  This well was
suspended as a future production well and an appraisal well ('ERB-A-2X'), is
under consideration for mid 2008.  Apache and the Company have applied to the
Egyptian authorities for a development lease in respect of the 'A' structure.

In the third quarter of 2007, a second exploration well, ERB-B-1X, was drilled
to a total depth of 5,146 feet.  This well encountered oil shows and the well
was subsequently tested without a productive flow of oil being achieved. The
well has now been plugged and abandoned.

A third exploration well, ERB-B-2X, is under preparation for spudding in
February 2008 which is intended to further explore the 'B' structure.

Greece

As announced on 21 December 2007, the Company has disposed of its entire
shareholding in Eurotech Services SA, through which the Company had held its 95%
economic interest in Kavala Oil SA.  Under the terms of sale, the Company sold
the entire issued share capital of Eurotech Services SA to Aegean Energy SA for
a consideration of US$1.5 million in cash.  The Company fully impaired its
investment in Eurotech Services SA in its accounts for the year ended 31
December 2006 and no profits were attributable to its investment in Eurotech
Services SA in such period.

Liberia

As announced on 21 December 2007, the Company has disposed of its entire
shareholding in Regal Liberia Limited, through which the Company had held its
25% interest in Blocks 8 & 9 offshore Liberia.  The Production Sharing Contracts
in respect of these Blocks remained unratified by the Liberian Government and
the Company took the view that this project did not constitute part of its
future area of core interest.

Financial Position

The unaudited gross profits increased from $2.7 million to $7.0 million when
comparing the nine month periods ending September 2006 and September 2007
respectively.

The unaudited turnover for the 11 month period to 30 November 2007 increased to
$13.9 million (30-Nov-06: $10.4 million). This increase is primarily
attributable to an uninterrupted nine months of continued production in 2007 in
Ukraine, together with new production following the hook-up of the SV-10 well in
May 2007, whereas the same period in 2006 was marred by intermittent disruption
to production due to court enforced shut-ins.

The Group had net cash of $7.0 million (30-Jun-07: $9.4 million) at 30 September
2007 and net assets of $59.2 million (30-Jun-07: $62.8 million).  As at 31
December 2007, the Group had cash in hand of approximately $5.6 million and had
drawn down $9 million from its $15 million Revolving Credit Facility with Bank
of Scotland.  As at 31 December 2007, the Group had net assets of approximately
$55 million.

Board Changes

On 22 November 2007, the Company announced the appointment of Mr David John
Greer OBE as Chairman and Chief Executive Officer and Mr Antonio Mozetic as a
Non-Executive Director of the Company, each with immediate effect.  In addition,
Mr Hendrikus (Harry) Alardus Verkuil was appointed as an Executive Director and
Chief Operating Officer on 15 January 2008.

It was also announced on 22 November 2007 that Mr Francesco Scolaro had stepped
down as Non-Executive Chairman of the Company due to other business commitments
but would continue as a Non-Executive Director and that Mr Neil Ritson had
resigned from his position as Chief Executive Officer and Director with
immediate effect.

Regulatory Matters

Regal has been notified by the London Stock Exchange, that following an
investigation it intends to refer a case regarding alleged breaches by Regal of
the AIM Rules to the AIM Disciplinary Committee the ('ADC')

Regal understands that the case against it relates to alleged breaches of what
were, at the relevant time, AIM Rules 9 and 10 (equivalent to Rules 10 and 11 of
the current AIM Rules) in connection with notifications made by Regal during the
period from June 2003 to June 2005, regarding the drilling of two exploration
wells known as Kallirachi 1 and Kallirachi 2, in its Kallirachi Prospect in the
North Aegean Sea, over which Regal's former indirect subsidiary, Kavala Oil S.A.
held rights. This referral follows an extensive investigation by the London
Stock Exchange.

Subsequent to the commencement of the London Stock Exchange's investigation,
Regal received notification that the Financial Services Authority ('FSA') had
also decided to investigate the same matters and the London Stock Exchange's
investigation was therefore suspended pending the outcome of the FSA's
investigation. The FSA and the London Stock Exchange have now agreed, and have
advised Regal, that the FSA has discontinued its own investigation in light of
the London Stock Exchange's proposed referral of this matter to the ADC.

In view of the referral of the case to the ADC, it is likely that the outcome of
this matter will not be known for a further six months at least.

Relationship Agreement

The Company has entered into a relationship agreement (the 'Relationship
Agreement') with CA Fiduciary Services Ltd as trustee for the Timis Trust (the
'Trustee'), Frank Timis ('Mr. Timis') and Strand Partners under the terms of
which the Trustee and Mr. Timis (in respect of himself and his associates (as
defined therein)) have undertaken to exercise or procure the exercise of their
voting rights in the share capital of the Company so as to procure that, inter
alia and subject to certain exceptions: (i) the Company is capable at all times
of carrying on its business independently of Mr. Timis and his associates; (ii)
no variations are made to the Company's articles of association which would be
contrary to the maintenance of the Company's ability to carry on its business in
such a way; (iii) the Board's independence is maintained in relation to the
enforcement of the Relationship Agreement; and (iv) any transactions, agreements
or arrangements entered into by the Company with such persons (or their
enforcement, implementation or amendment) will be made on an arm's length basis
and on normal commercial terms. The Relationship Agreement contains provisions
under which it will terminate: (i) on its second anniversary (unless extended by
agreement); (ii) upon the Trustee, Mr. Timis and his associates ceasing, in
aggregate, to hold 10 per cent or more of the rights to vote at general meetings
of the Company, provided that, such persons will continue to be bound by the
Relationship Agreement should they subsequently hold such rights; or (iii) if
the Company decides to abandon completely the development of the Ukrainian
operations and Mr. Timis and the Trustee serve written notice of termination
upon the other parties.

Change of Nomad

The Company has appointed Strand Partners Limited as its new Nomad.  Mirabaud
will continue in its capacity as the Company's broker.

5.         Details of the Placing

The Company proposes to raise approximately £84 million (before expenses)
through the Placing.  The Placing Price represents a premium of approximately
1.7 per cent. to the closing mid-market price of 147.5 pence per Ordinary Share
on 22 January 2008, being the last dealing day prior to this announcement.  The
Placing Shares will represent approximately 28.3 per cent. of the Company's
issued share capital as expected to be enlarged by the Placing.

Pursuant to the terms of the placing agreement between Mirabaud and the Company
(the 'Placing Agreement'), Mirabaud, as agent for the Company, has agreed to use
reasonable endeavours to procure subscribers for the Placing Shares at the
Placing price.  The Placing Agreement is conditional upon, inter alia, the
resolutions being duly passed at the General Meeting and admission of the
Placing Shares to trading on AIM becoming effective on or before 22 February
2008 (or such later date as the Company and Mirabaud may agree, but in any event
no later than 5 March 2008).  The Placing Agreement contains provisions
entitling Mirabaud to terminate the Placing Agreement at any time prior to
admission in certain circumstances.  If this right is exercised, the Placing
will not proceed.  The Placing has not been underwritten by Mirabaud.

Application will be made to London Stock Exchange plc for the Placing Shares to
be admitted to trading on AIM.  It is expected that admission will become
effective and that dealings in the Placing Shares on AIM will commence on 22
February 2008.

The Placing Shares will rank pari passu in all respects with the existing
ordinary shares in issue, including the right to receive all dividends and other
distributions declared following admission.  It is expected that CREST accounts
will be credited on the day of admission and that share certificates (where
applicable) will be despatched shortly thereafter.



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