Final Results

Regal Petroleum PLC
06 April 2004


For Immediate Release                                               6 April 2004





                              Regal Petroleum plc


                   Preliminary Results for the twelve months
                             to 31st December 2003



Regal Petroleum plc ('Regal', 'the Company or 'the Group') is pleased to
announce today its results for the twelve months ended 31st December 2003.



Highlights include:



•   Turnover increases to US$10,194,000 (2002: $583,000)

•   Losses reduced to $2,908,780 (2002: $4,492,000)

•   Production commenced from MEX3, GOL2 and GOL1 in the Ukraine, with all gas
and condensate production sold locally at an average of $54 per thousand cubic
metres and $186 per metric tonne respectively

•   Completion of gas plant with 1MMm3 of gas per day capacity and 13.2km
pipeline connecting Regal's gas plant in Ukraine to the international export
trunk line to Western Europe

•   Acquisition of 57.69% interest in Kavala Oil S.A. ('Kavala') in October 2003

•   Awarding of first and second exclusive exploration, development and
production licenses in Romania, making Regal the largest and most prospective
oil and gas concession in Romania with a total license area in excess of
10,000km2



Commenting on the preliminary results, Frank Timis, Executive Chairman, said:



'Regal is rapidly developing into a sizeable oil and gas exploration company
with a broad portfolio of quality assets.  The Company has made considerable
progress during 2003 and we anticipate that our strategy of exploiting our
existing assets, coupled with pursuing other exciting projects, will underpin
the future growth of Regal'.



For further information please contact:



Regal Petroleum plc
Tel : [phone]
Frank Timis, Executive Chairman
Stephen West, Company Secretary

Buchanan Communications
Tel : [phone]
Bobby Morse / Catherine Miles


Attached:

Chairman's Statement

Financial Review

Consolidated profit and loss account

Consolidated balance sheet

Consolidated cash flow statement


Regal Petroleum plc



Chairman's Statement for the year ended 31 December 2003





Dear Shareholder



The past year has been critical in building a substantial platform for the
growth of Petroleum by focusing on production and exploration of quality oil and
gas assets.  Through the development of our existing asset base, as well as
seeking other quality opportunities, Regal is poised for delivering considerable
shareholder value during the course of the next few years.



Kavala Acquisition



In October 2003 the Company completed the acquisition of an indirect 57.69 per
cent. interest in Kavala Oil S.A. ('Kavala') through the issuance of 4,788,200
shares at 75p per share.  Kavala is a Greek oil and gas production company with
proven and probable recoverable reserves of 80MMbbls in the Prinos, Prinos North
and Epsilon fields and expected recoverable reserves of up to 240MMbbls in the
Kallirachi oil discovery.  The potential of Kavala, with its proximity to
excellent local and international markets, will be realised during the course of
the next few years as production from producing assets is increased.  In
addition, the discovery of the exciting Kallirachi prospect since the year end,
Regal's first pure exploration project, has provided considerable upside to the
potential of Regal becoming a leading hydrocarbon producer in the region.



Romania Licence Areas



In January 2003 Regal was awarded an exclusive exploration, development and
production license for a 4,103km2 area, the Suceava Block in the North East of
Romania, by the National Agency for Mineral Resources of Romania ('NAMR').  In
December 2003 Regal was awarded a further exclusive exploration, development and
production license by NAMR for a 6,285km2 area, the Barlad Block, which is an
eastward extension of the Suceava Block.



Regal now has the largest and most prospective oil and gas concession of any
foreign company in Romania, with a total license area in excess of 10,000km2 of
the geological oil and gas structures.  Five large gas structures have been
identified and it is Regal's intention to commence exploration drilling in the
second half of 2004.



Ukraine Operations



A total of six wells have been drilled or worked-over in the Golotovschinska,
Mekhediviska and Svyrydivske license areas in Ukraine.  Three of these wells are
currently producing at approximately 260,000 m3 of gas or equivalent per day.
MEX102 has been downhole tested at 645,000 m3 equivalent per day.  The well is
connected up to the processing plant and, after cleaning up, it will go into
production through the plant.



During 2003 the construction of a gas plant was commenced and completed with the
plant being fully operational by July 2003 with a capacity to process 1 million
m3 of gas per day.  In December 2003 a 13.2km high capacity export pipeline
connecting Regal's gas plant to the international export trunk line to Western
Europe was completed and connected on time and within budget.  Completion of the
plant and pipeline is a major achievement for Regal as it ensures control of the
infrastructure as well as providing significant cost savings for the anticipated
increase in gas production.



The required documentation for the Production Licence application was submitted
in December 2003 and it is expected that the Production Licence will be granted
during 2004.









Regal Petroleum plc



Chairman's Statement for the year ended 31 December 2003





Placement of Shares



On 20 October 2003 Regal raised £24.15 million (net of expenses) through an
institutional placing of 35,086,667 new ordinary shares at a price of 75 pence
per share.



This fund raising was completed in conjunction with the acquisition of our
interest in Kavala and has provided the working capital required for the further
development of our existing oil and gas assets and the drilling of a successful
exploration well at the Kallirachi oil discovery in Kavala, which was completed
in February 2004, with very positive results.  Further delineation of the
Kallirachi oil discovery has continued as well as the anticipated infill
drilling in Prinos and Prinos North, and the drilling of the Epsilon field is
due to commence this year.



Board Appointments



Guenter Nolte, previously Managing Director of Halliburton Europe, was appointed
Chief Executive Officer of Regal in March 2003 and has been critical in
implementing Regal's strategy.  Lord Anthony St John of Bletso, a Crossbench
Member of the House of Lords and a Member of the House of Lords European Union
Sub-committee A on Trade Finance and Foreign Affairs, and Nikolaos Loutsigkas,
the President and Managing Director of Kavala Oil S.A., have joined as
non-executive directors in September 2003 and November 2003 respectively.



Strategy and Outlook for 2004



Our strategy of exploiting existing assets to drive cashflow as well as
identifying assets with considerable potential will allow Regal to deliver a
year of profitable growth in 2004.



To further develop our assets in Greece and Romania during 2004 and 2005 a
placement of 13,333,334 new ordinary shares in March 2004 raised an additional
£37.5 million (net of expenses).



2003 has been a year of considerable growth for Regal, with the broadening of
our asset base to include both assets producing strong cashflow as well as
exploration licenses which will further consolidate the Company's growth plans
for many years to come. The success of the Company would not have been possible
without the considerable hard work of its employees and I would like to take
this opportunity to thank all the staff and my fellow members of the Board for
their effort and commitment during the year.



I would also like to thank our shareholders for your continued support in what
has become a significant oil and gas exploration and production company over the
past year.





V. Frank Timis

Executive Chairman





Regal Petroleum plc



Financial Review for the year ended 31 December 2003





Results Summary



The financial results for the year ended 31 December 2003 reflect the Group's
increased production in Ukraine, the acquisition of its interest in Kavala Oil
S.A in Greece and the successful fund raising through an institutional placing
in October 2003.



Institutional Placing and Greek Acquisition



On 26 October 2003, Regal successfully raised £24.15 million net of expenses
through an institutional placing of 35,086,667 shares at 75 pence.  Part of
these funds were applied against construction of infrastructure in the gas field
in Ukraine and drilling of an exploration well in the Kallirachi oil prospect.



Following the institutional placement, the Company had a total of 100,541,534
shares on issue at 31 December 2003.



The Greek acquisition comprised the purchase of 86.11 per cent. of Eurotech
Services S.A., a private company incorporated in Greece. Eurotech owns 67 per
cent. of the entire issued capital of Kavala which is a private Greek company
holding exclusive rights to develop, exploit and operate oil fields in the North
Aegean Sea. Regal indirectly owns 57.69 per cent. of the entire issue capital of
Kavala.



Turnover



Turnover for the year was $10,194,000 generated from the sale of gas and
condensate production from wells MEX3, GOL2 and GOL1 in Ukraine and the sale of
oil, electricity and sulphur production from Kavala in Greece.



The Ukraine production wells GOL2 and GOL1 commenced production in January 2003
and July 2003 respectively.



All gas and condensate production in Ukraine was sold locally at an average
price of $54 per thousand cubic metres of gas and $186 per metric tonne of
condensate.  All sales are paid for in advance.



Kavala sells its oil at a price approximately equal to the prevailing IPE Brent
price less a discount of US$3 per barrel.  Electricity and sulphur, being
bi-products of the oil production, are sold locally at market prices.



Operating Loss



The operating loss for the year was $4,341,000 which includes minority interests
of $1,309,000.



Loss Before and After Tax and after Minority Interest



The loss before and after tax and after minority interests of $2,908,780
included an interest charge of $129,000 and interest earned of $254,000 for the
year. The interest charge represents interest paid on funds loaned to the Group
prior to the fund raising in October 2003. As at 31 December 2003, the Group had
no long term borrowings.



The interest earned reflects the Group's management of cash reserves.



The results include a foreign exchange gain of $1,807,000.





Regal Petroleum plc



Financial Review for the year ended 31 December 2003





Cash Flow



Net cash outflow from operating activities was $1,060,000.



The capital expenditure outflow of $16,766,000 represented the construction of
infrastructure in Ukraine including a gas processing plant, purchase of plant
and equipment and drilling of the Kallirachi exploration well in Greece.



As at 31 December 2003, the Group had total cash balances of $28,539,000.



Financial Risk



The main risks Regal is exposed to are resource price, exchange rate,
counterparty and liquidity risks in its Group operations.  Wherever possible the
Group attempts to minimise the impact of such risks.



Resource risk and counterparty risk is minimised through short-term forward sale
contracts.  Longer term contracts will be negotiated once production levels have
increased.



To minimise exchange rate risks, Regal attempts to match currency receipts and
payments wherever possible.  Regal also seeks to retain sufficient liquidity,
either in the form of cash or maturing deposits to manage the Group's ongoing
programmes.



International Accounting Standards



International Accounting Standards (IAS) will replace UK GAAP for Group
consolidated reporting for the year ended 31 December 2005.  We are currently
assessing the impact on our accounting and systems requirements.



Summary



The financial results for the year to 31 December 2003 are in line with the
Company's expectations.



With an institutional placing completed subsequent to year end in March 2004,
Regal is in a strong financial position to fund the continued development and
growth of its projects in Ukraine, Greece and Romania.







Glenn Featherby

Finance Director



Regal Petroleum plc



Consolidated profit and loss account for the year ended 31 December 2003







                                                            Continuing

                                                            operations     Acquisitions          Total      Total

                                                 Note             2003             2003           2003       2002

                                                                 $'000            $'000          $'000      $'000



Turnover                                            1            2,844            7,350         10,194        583



Cost of sales                                                    (887)          (8,085)        (8,972)       (92)



Gross profit                                                     1,957            (735)          1,221        491

Other operating income                                           1,566            1,400          2,966          -

Administrative expenses                                        (4,788)          (3,740)        (8,528)    (4,663)

Operating loss                                                 (1,265)          (3,075)        (4,341)    (4,172)

Interest receivable                                                                                254        110

Interest payable and similar charges                                                             (129)      (430)

                                                                                               (4,217)    (4,492)

Loss on ordinary activities before

and after taxation




Minority interest                                                                                1,309          -

Loss for the financial year                                                                    (2,908)    (4,492)

Loss per ordinary share (cents)

Basic                                               2                                             4.5c      10.1c

Diluted                                             2                                             4.5c      10.1c






All amounts for 2002 relate to continuing activities.



The notes form part of these financial statements.



Regal Petroleum plc



Consolidated balance sheet at 31 December 2003




                                            Note                   2003             2003        2002        2002
                                                                  $'000            $'000       $'000       $'000
Fixed assets
Intangible assets                                                                  2,350                       -
Tangible assets                                                                   36,188                   5,873
Investments                                                                          203                      54
                                                                                  38,741                   5,927

Current assets
Stocks                                                            3,626                            -
Debtors                                                          10,169                        1,652
            Investments                                           3,770                            -
Cash at bank and in hand                                         28,539                        8,974

                                                                 46,104                       10,626

Creditors: amounts falling due                                 (15,441)                      (1,044)

within one year
Net current assets                                                                30,663                   9,582
Total assets less current liabilities                                             69,404                  15,509
Provision for liabilities and charges                                            (1,253)                   (100)
Minority Interest                                                                (3,948)                       -
Net assets                                                                        64,203                  15,409

Capital and reserves
Called up share capital                        3                                   8,212                   4,613
Share premium                                                                     62,369                  14,754
Merger reserve                                                                   (3,204)                 (3,204)
Capital contributions                                                              7,477                   7,477
Profit and loss account deficit                                                 (10,651)                 (8,231)

Shareholders' funds - equity                                                      64,203                  15,409







The financial statements were approved by the Board on 5 April 2004.







G R Featherby

Director





The notes form part of these financial statements.





Regal Petroleum plc



Consolidated cash flow statement for the year ended 31 December 2003


                                                  Note           2003            2003           2002         2002
                                                                $'000           $'000          $'000        $'000


Net cash outflow from operating                                               (1,060)                     (5,281)

activities

Returns on investments and

servicing of finance



Interest received                                                 280                            110
Interest paid                                                   (130)                          (430)

Net cash outflow from returns                                                     150                       (320)

on investments and servicing of finance
Capital expenditure and financial

investment
Purchase of tangible fixed assets                                            (16,766)                     (3,207)
Acquisitions and disposals                                                    (1,547)                           -

Cash outflow before use of

liquid resources and financing                                               (19,223)                     (8,808)

Management of liquid resources
Purchase of current asset investments                                         (3,168)                           -

Financing
Proceeds from borrowings                                            -                            186

Repayment of borrowings                                         (185)                        (1,337)
Capital contributions received                                      -                          2,741
Issues of ordinary share capital                               44,626                         16,094
Payment of expenses and commissions
on issue of ordinary shares                                   (2,601)                              -

                                                                               41,840                      17,684

Increase in cash                                                               19,449                       8,876







The notes form part of these financial statements.


Regal Petroleum plc



Notes forming part of the financial statements for the year ended 31 December
2003





1            Turnover and net assets
                                                                                                 2003        2002
                                                                                                $'000       $'000
Analysis of turnover by activity:
Oil sales                                                                                       7,121           -
Gas sales                                                                                       2,545         550
Condensate sales                                                                                  299          26
Sulphur sales                                                                                     221           -
Other                                                                                               8           7

                                                                                               10,194         583

                                                                                                 2003        2002
                                                                                                $'000       $'000
Analysis of turnover by geographical market:
Greece                                                                                          7,350           -
Ukraine                                                                                         2,844         583

                                                                                               10,194         583
Turnover was wholly attributable to the group's primary activities.

                                                                                                 2003        2002
                                                                                                $'000       $'000
Analysis of operating profit (loss) by geographical market:
Greece                                                                                        (3,076)           -
United Kingdom                                                                                (1,411)     (2,459)
Ukraine                                                                                           158     (1,713)
Romania                                                                                          (12)           -

                                                                                              (4,341)     (4,172)




                                                                                                 2003        2002
                                                                                                $'000       $'000


Analysis of net assets by geographical origin:
Greece                                                                                         13,091           -
United Kingdom                                                                                 32,243       9,204
Ukraine                                                                                        18,540       6,205
Romania                                                                                           329           -

                                                                                               64,203      15,409







Regal Petroleum plc



Notes forming part of the financial statements for the year ended 31 December
2003 (Continued)





2            Earnings per share



Earnings per share has been calculated on the basis of losses after taxation of
$2,908,780              (2002 - $4,492,000) and 64,654,847 5p ordinary shares
(2002 - 44,383,562 5p ordinary shares on a proforma basis), being the average
number of shares in issue during the year to 31 December 2003.



The effect of all potential ordinary shares is anti-dilutive.





3        Share capital


                                                                                         Authorised
                                                               2003             2002           2003         2002
                                                             Number           Number          $'000        $'000
Ordinary shares of 5p each                              200,000,000       80,000,000          6,440        6,440
 (Approximately 8c each)
                                                                 Allotted, called up and fully paid

                                                               2003             2002           2003         2002
                                                             Number           Number          $'000        $'000

Ordinary shares of 5p each                              100,541,534       57,316,667          8,212        4,613

 (Approximately 8c each)








4          Basis of preparation



The preliminary financial information set out above incorporates the audited
results of Regal Petroleum plc and all its subsidiary undertakings for the year
ended 31 December 2003.



The financial information set out in the announcement does not constitute the
Company's statutory accounts for the year ended 31 December 2003 or 2002. The
financial information for the year ended 31 December 2002 is derived from the
statutory accounts for that year which have been delivered to the Registrar of
Companies. The auditors reported on those accounts; their report was unqualified
and did not contain a statement under s237(2) or (3) Companies Act 1985.



The statutory accounts for the year ended 31 December 2003 will be delivered to
the Registrar of Companies following the Company's annual general meeting.



Furthermore, the preliminary financial information has been prepared on a basis
consistent with the audited financial statements for the year ended 31 December
2002.


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