Preliminary Results

Regal Petroleum PLC
25 June 2007



For Immediate Release                                             25 June 2007

                              REGAL PETROLEUM PLC

                    PRELIMINARY AUDITED RESULTS FOR THE YEAR
                             ENDED 31 DECEMBER 2006

Regal Petroleum plc ('Regal', 'the Company' or 'the Group'), the AIM listed
London based oil and gas exploration and production group, today announces its
audited results for the year ended 31 December 2006.

Highlights

Ukraine

   •The legal dispute over the licences in Ukraine was successfully resolved
    by the Supreme Court of Ukraine in December 2006.
   •Realised prices for gas increased by over 40% from January 2006 to
    January 2007.
   •Dormant production well SV-10 was successfully restarted and tested at
    commercial rates.
   •Average daily production between 1 August and 31 December 2006 was 3.85
    MMcf of gas and 447 bbls of condensate, totalling 1,134 boepd.

Romania

   •Suceava Block: a Joint Venture agreement was signed in September 2006
    with Aurelian Oil and Gas plc (Aurelian) farming out a 50% working interest
    in return for their acquiring a minimum of 150 kilometres of 2D seismic and
    the drilling of one exploration well at their sole cost.
   •Barlad Block: over 800 kilometres of 2D seismic was acquired and several
    leads identified of which two are planned to be drilled during 2007.

Egypt

   •The East Ras Budran Concession was farmed out to Apache Khalda
    Corporation LDC (Apache) in October 2006 with a work programme of 3D seismic
    and two exploration wells.

2007 Update

   •Ukraine: Regal has acquired 100 square kilometres of 3D seismic, which is
    currently being processed. A 4.3 kilometre pipeline connecting well SV-10 to
    the Group's gas gathering facility has been constructed increasing
    production by 33%. Tristone Capital has been appointed to assist the Company
    in seeking a strategic partner to participate in the acceleration of the
    field development plan.
   •Romania: It is planned that at least three exploration wells will be
    drilled during 2007, one in the Suceava block and two in the Barlad block.
   •Egypt: It is planned to drill two back-to-back exploration wells in the
    East Ras Budran Concession, the first well commenced in June 2007.

Commenting on the Company's results, Frank Scolaro, Chairman said:

'Regal made significant progress in 2006 on many fronts. The confirmation of the
validity of Regal's licences in Ukraine, the Joint Venture arrangements with
Apache and Aurelian, together with the strengthening of our management team, now
led by Neil Ritson, has put the Company in a much stronger position to deliver
material returns to shareholders in the future. The developments in 2006 have
paved the way for a bright future for Regal.'

Neil Ritson, Chief Executive Officer, also said:

'During the second half of 2006 the new management at Regal have sought to
establish a strong and sustainable foundation for growth by successfully
resolving the legal problems in Ukraine and identifying new partners in Egypt
and Romania. I am confident that the actions taken in 2006, which included the
full impairment of our Kavala Oil investment, have provided the Company with a
strong platform for the future. The impairment of the Greece assets and the
non-cash costs associated with Ukraine give rise to an exceptional one off loss;
however, underlying profitability from operations has improved. As our Ukrainian
fields are developed we anticipate this trend to continue.'

Annual General Meeting

The Annual General Meeting of the Company will on Wednesday 15 August 2007 at
10.00am.

For further information, please contact:

Regal                                                Tel: [phone]

Neil Ritson, Chief Executive Officer
Frank Scolaro, Chairman

Evolution Securities                                 Tel: [phone]
Robert Collins


Definitions
MMcf: million cubic feet
Mcf: thousand cubic feet
bbls: barrels
boepd: barrels of oil equivalent per day

Chairman's Statement

The Company continues to focus its resources on assets in Eastern Europe and on
value creation through both exploration and field development. Our strategic
proposition remains unchanged; however, our ability to achieve our goals has
been greatly enhanced in the past year.

The last year was a key period for the Company following the legal challenge to
its major assets in Ukraine. Those legal proceedings were successfully concluded
by year end when the Supreme Court of Ukraine endorsed Regal's title to 20 year
production licenses. The Company has now embarked on a strategy that we believe
will maximise value from its exciting portfolio of production and exploration
assets.

The year also saw some notable developments including establishing new joint
ventures in both Egypt and Romania to spread risk whilst simultaneously allowing
us to deploy our capital on the production and field development activities
underway in Ukraine. We have also rebuilt our senior management team to ensure
the right skills and relevant experience are available within the Company for
the longer term future. We will continue to employ joint ventures and have
engaged Tristone Capital as advisors to assist us in finding a partner for our
Ukrainian assets during 2007.

Ukraine

We entered the year with concerns over our title to the key Mekhediviska/
Golotvschinska (MEX-GOL) and Svyrydivske (SV) production licences granted to
Regal in July 2004 due to a legal dispute which arose in 2005 between our
previous joint venture partner Chernihivnaftagasgeologia (CNGG) and the Ministry
of Environmental Protection (MEP). To assist us in the process of managing the
legal and strategic aspects of our business in Ukraine we appointed a new legal
team and on their recommendation a strategic partner, Alberry Limited (Alberry),
was introduced to support Regal on a success fee basis.

The dispute over the validity of the licences was finally resolved in December
2006 when the Supreme Court of Ukraine dismissed all claims brought by CNGG. The
Court thereby affirmed the validity of the 20 year licences granted to Regal.

During the year, as a result of the ongoing litigation, the MEX-GOL and SV field
pilot production facilities were shut-in twice. Uninterrupted production,
however, recommenced in August 2006 and through to the year end, average daily
production from the five Regal wells was 3.85 million standard cubic feet of gas
and 447 barrels of condensate. Free cash flow was generated from these
operations and was partially repatriated to the UK. Upper limits on gas prices
set by the Ukrainian Government rose from $2.37 per thousand cubic feet in
January 2006 to $3.07 per thousand cubic feet by year end. A further significant
upward revision to $4.03 per thousand cubic feet occurred in early 2007 as
Russia progressively seeks to eliminate the discount paid by Ukraine for
imported gas. This trend of increasing prices appears set to continue in the
coming years and underpins value in our field development operations.

To accelerate the development of the fields it was decided to acquire 3D seismic
data over the MEX-GOL field and, if successful, to extend the survey over the SV
field in subsequent years. Mobilisation of the Ukrgeofizika crew was under way
at year end and the survey was successfully completed in May 2007.

Additionally, we were able to re-open the SV-10 well and after coiled tubing
conveyed nitrogen lift, we obtained a stable and commercial flow rate which has
been tied in to the existing facilities. We also expect to recommence drilling
on the delayed development plan as soon as the required rig can be refurbished
and a commercial contract agreed.

Egypt

Regal acquired a 100% interest in a prospective onshore concession, East Ras
Budran, in the Gulf of Suez in 2004. In 2006 Regal sought a joint venture
partner and in October farmed-out the concession to Apache Khalda Corporation
LDC (Apache) who entered the partnership with a 75% working interest and
returned to Regal back costs totalling $4.85 million. Apache immediately
acquired an aeromagnetic survey and have subsequently acquired an extensive new
3D seismic survey. Two exploration wells are committed in the concession.
Apache, as operator, will drill those in 2007, with the first commencing in
June.

Romania

The Company holds two large under-explored licences in Romania where there is
considered to be good potential to find gas accumulations. In September 2006 we
concluded a 50% farm-out with Aurelian Oil and Gas plc (Aurelian) on the
northern, Suceava block, under which Aurelian agreed to carry Regal on a 2D
seismic programme and an exploration well. Their 2D seismic (totalling 160km)
has been completed and drilling of a well is planned for July 2007. In the
Barlad block, where Regal maintains a 100% working interest, an additional 800km
of 2D seismic was acquired and interpreted. Using the new seismic data drilling
locations have been defined for two wells which are scheduled to commence in
late third quarter 2007.

Greece

Throughout the year the status quo has been maintained on the Company's Greek
interests. Kavala Oil S.A. (Kavala Oil) has been operated by local management
and the Workers Union and Regal has neither invested nor received any dividend
on its previous investments. In the second half of the year active approaches
were made to potential buyers with a view to Regal divesting its holding in
Eurotech S.A. (Eurotech), the Kavala holding company. Sales discussions were not
concluded by year end and are ongoing in 2007; however, I remain confident that
a partner for the Regal position can be found.

Financial

Regal posted a consolidated loss of $109.2 million in 2006 which reflects
exceptional non-cash charges resulting from the agreement with Alberry to assist
in securing the validity of the Ukrainian licences ($48.9 million) and $43.7
million reflecting the impairment of the Greek assets carried as an investment.

Turnover from sales of gas and condensate in Ukraine was $10.9 million (2005:
$13.9 million) down due largely to the shut-ins associated with the legal
dispute, although partially offset by higher commodity prices. Over the year the
Company received an average price of $105 per thousand cubic metres ($2.95 per
Mcf) for gas and $53 per barrel for condensate.

Net cash outflow from operating activities for the year was $11.8 million (2005:
outflow $30.5 million) and at the end of 2006 the Group had no long-term
borrowings and cash balances of $13.0 million (2005: $34.9 million). This places
the Company in a secure position going forward with various options available
for future financing.

Management

During the year, with the support of our shareholders, we have had a number of
management and Board changes. The result is that we have simplified and
strengthened our management approach. We have been successful in appointing a
new CEO, Neil Ritson, who has a wealth of industry experience and have appointed
a new COO, David Scott. Early in 2007, we also appointed a new CFO, Gordon
Stein.

Outlook for 2007

The year ahead is set to be a critical one in terms of short-term value creation
within the Company. Our focus will be on four key areas: the ongoing field
development operations in Ukraine which we hope will lead to a reserves update
in the fourth quarter; the search for a joint venture partner to work with us to
accelerate the Ukrainian development project; a significant exploration
programme with the drilling of five wells in Romania and Egypt; and finally the
continued process of strengthening corporate governance with the probable
addition of new Board members and advisors; a process which commenced with the
appointment of Mirabaud Securities as joint broker in February 2007.

The developments in 2006 have paved the way for a bright future for Regal. We
hold excellent assets and have a strong and experienced management team, which
together can drive future value creation. I would like to thank the
shareholders, the Board and the staff for their ongoing support.





Financial Review

Overview

The financial performance of the Group in 2006 was detrimentally impacted by the
legal actions in Ukraine and by the continuing lack of operational control
throughout the year in Greece. As a result, the Group was required to post two
exceptional non-cash charges totalling $92.6 million in 2006 for Ukraine and
Greece which contributed significantly towards the $109.2 million loss for the
year; $48.9 million related to an exceptional charge resulting from the
agreement with Alberry to assist in securing the validity of the Ukraine
licences and $43.7 million was attributable to the impairment in the value of
the Group's investment in Greece. In taking these actions in 2006, however, the
Group is in a much stronger position to deliver shareholder value from its
Ukrainian, Romanian and Egyptian assets in 2007 and beyond.

Despite its problems in Ukraine and Greece, the Group continued to invest in its
asset portfolio in 2006, increasing its fixed asset position throughout the year
by $16.1 million, offset by $4.2 million received from Apache as a proportionate
reimbursement of capitalised back-costs from the Egyptian farm-out. This
programme of investment in 2006 has provided a solid platform for the five well
drilling campaign in Romania and Egypt which is due to commence in mid 2007.

Turnover

The Group's turnover for the year was adversely affected by the legal issues in
Ukraine which resulted in two production shutdown periods in the year totalling
131 days. Turnover for the year generated from the sale of gas and condensate
production from wells MEX-102, MEX-3, SV-10, GOL-2 and GOL-1 in Ukraine was down
from $13.9 million in 2005 to $10.9 million in 2006 due largely to the shut-ins
associated with the legal dispute, although partially offset by higher commodity
prices. Included in turnover for 2005 was $23.4 million relating to the sale of
oil and sulphur production from Kavala Oil in Greece. The results for Kavala Oil
for the 2006 year have not been consolidated in the Group's financial statements
as the Group's interest in Kavala Oil is treated as an investment, the value of
which has been fully impaired at the end of 2006.

All gas and condensate production in Ukraine was sold locally at an average
price of $105 per thousand cubic metres of gas and $53 per barrel of condensate
over the year.

Cash Flow

Net cash outflow from operating activities totalled $11.8 million (2005: outflow
$30.5 million). The capital expenditure outflow of $11.8 million (2005: $41.7
million) relates to development and exploration expenditure across the Group.

As at 31 December 2006, the Group had total cash balances of $13.0 million
(2005: $34.9 million). The Group, at 31 December 2006, had no long-term bank
debt.

Financial Risk

The main financial risks Regal are 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. The farm-out campaigns in
Romania and Egypt in 2006 were, for example, undertaken to reduce the portfolio
risk within the Group.

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
activities.

During the year the Group recognised foreign exchange gains of $0.5 million in
the profit and loss account as well as a $4.3 million movement in the foreign
exchange reserve. This is attributable to currency fluctuations during the year.

Funding Position

The Company will fund its share of field developments from a mixture of funds
raised from the potential partial divestment of Ukraine, development carries by
the new partner from that partial divestment, cash flows generated from
production, or from debt raised from banks or financial institutions based on
future cash flows. The Company continues to examine all potential funding
options and has been in active discussions with some major banks in this regard
in 2007.

Contingent Liabilities

As the licence litigation in Ukraine has been finalised by the Ukraine Supreme
Court, the Group no longer recognises a contingent liability in this respect.

Summary

The Company is committed to realising the full potential of its assets. This
means instigating development work on its licences with proved and probable
reserves and raising funds by either selling down a percentage interest or using
financial instruments based on future cash flows. With the resolution of the
legal title issue in Ukraine, and with the support of new partners in Romania
and Egypt, the Company is in a much stronger financial position going into 2007
than was the case at the start of 2006. This enhanced platform will enable the
Group to seek to optimise its asset portfolio in 2007 and beyond through a
focused programme of investment to significantly improve shareholder value and
returns.


Regal Petroleum plc
Consolidated Profit and Loss Account
for the year ended 31 December 2006

                                                         2006             2005
                                                                   as restated
                                                         $000             $000

Group turnover                                         10,845           37,255
Cost of sales                                          (8,306)         (38,505)
Gross profit/(loss)                                     2,539           (1,250)

Normal administrative expenses                        (14,765)         (30,228)
Exceptional administrative expenses                   (54,801)               -
Total administrative expenses                         (69,566)         (30,228)
Other operating income                                    861            1,083
Group operating loss                                  (66,166)         (30,395)

Impairment of investment                              (43,700)               -
Loss on deconsolidation of excluded subsidiary              -          (53,477)
Loss on sale of fixed assets                                -             (113)
Interest receivable and similar income                  1,183            1,115
Interest payable and similar charges                       (2)            (145)
Loss on ordinary activities before taxation          (108,685)         (83,015)
Tax on profit on ordinary activities                     (491)          (1,213)

Loss on ordinary activities after taxation           (109,176)         (84,228)
Retained loss for the financial year                 (109,176)         (84,228)

Loss per ordinary share (cents)
Basic                                                 (85.0c)          (68.9c)

The profit and loss account has been prepared on the basis that all operations
are continuing operations.


Regal Petroleum plc
Consolidated Balance Sheet
at 31 December 2006

                                                         2006             2005
                                                                   as restated
                                                         $000             $000
Fixed assets
Intangible assets                                      26,867           14,731
Tangible assets                                        29,761           29,356
Investments                                                 -           43,700
                                                       56,628           87,787
Current assets
Stocks                                                     37               38
Debtors                                                 3,368            4,995
Investments                                                 -              136
Cash at bank and in hand                               13,048           34,796
                                                       16,453           39,965

Creditors: amounts falling due within one year         (2,171)          (2,267)

Net current assets                                     14,282           37,698
Total assets less current liabilities                  70,910          125,485

Provisions for liabilities and charges                   (950)            (196)
Net assets                                             69,960          125,289

Capital and reserves
Called up share capital                                10,934           10,934
Share premium account                                 217,640          217,640
Other reserves                                         10,644            6,073
Equity reserve                                         49,049                -
Profit and loss account                              (218,307)        (109,358)
Shareholders' funds - equity                           69,960          125,289


Regal Petroleum plc
Consolidated Cash Flow Statement
for the year ended 31 December 2006

                                                      Note      2006      2005
                                                                $000      $000
Net cash flow from operating activities                  2   (11,840)  (30,470)

Returns on investments and servicing of finance
Interest received                                              1,183     1,115
Interest paid                                                     (2)     (145)
                                                               1,181       970

Taxation                                                        (491)   (1,227)

Capital expenditure and financial investment
Purchase of tangible and intangible fixed assets             (16,076)  (41,681)
Sale of intangible assets                                      4,245         -
                                                             (11,831)  (41,681)

Acquisitions and disposals
Deconsolidation of subsidiary undertaking                          -      (669)
Purchase of subsidiary undertaking                                 -    (1,185)
                                                                   -    (1,854)

Cash outflow before management of liquid resources
and financing                                                (22,981)  (74,262)

Management of liquid resources
Disposal of current non-listed investments                         -     3,000
Decrease in monies on deposit                                     20       113
                                                                  20     3,113

Financing
Funds received in connection to the exercise of share
options                                                           80         -
Issue of ordinary share capital                                    -    84,642
Debt due within one year:
Decrease in short-term borrowing                                 (16)   (1,064)
                                                                  64    83,578

(Decrease)/increase in cash in the period                    (22,897)   12,429



Regal Petroleum plc
Consolidated Statement of Total Recognised Gains and Losses
for the year ended 31 December 2006

                                                          2006            2005
                                                                   as restated
                                                          $000            $000
Loss for the financial year                           (109,176)        (84,228)
Gross exchange differences on the retranslation of
net investments                                         (4,331)         (1,606)
Total recognised gains and losses relating to the
financial year                                        (113,507)        (85,834)

Prior year adjustment*                                  (1,791)
Totalrecognised gains and losses since the last
annual report                                         (115,298)

Reconciliations of Movements in Shareholders' Funds
for the year ended 31 December 2006

                                                               2006       2005
                                                               $000       $000
Loss for the financial year                                (109,176)   (82,564)
Prior year adjustment*                                            -     (1,664)
Restated loss for the financial year                       (109,176)   (84,228)
Credits to equity in respect of share based payments
recognised in the profit and loss account                    49,436          -
Other recognised gains and losses relating to the year
(net)                                                         4,411     (1,606)
New share capital subscribed (net of issue costs)                 -     84,642
Prior year adjustment to reserves                                 -      1,664
Net (deficit)/addition to shareholders' funds               (55,329)       472

Opening shareholders' funds                                 125,289    124,817
Closing shareholders' funds                                  69,960    125,289
*Restated for the adoption of FRS 20 Share-Based Payments.


Regal Petroleum plc
Notes forming part of the financial statements
for the year ended 31 December 2006
1 Statutory Accounts

The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31 December 2006 or 2005. The statutory
accounts for 2006 will be delivered to the Registrar of Companies following the
Company's annual general meeting.


2 Reconciliation of operating loss to operating cash flows

                                                          2006            2005
                                                                   as restated
                                                          $000            $000

Operating loss                                         (66,166)        (30,395)
Depreciation, amortisation and impairment charges        2,977          14,840
Exchange differences                                      (343)            771
Movement in provisions                                     754             276
Decrease/(increase) in stocks                                1          (4,522)
Decrease/(increase) in debtors                           1,580            (887)
Decrease in creditors                                     (195)        (12,310)
Current asset investment                                   116              93
Share option charge                                        387           1,664
Exceptional share based payment charge                  49,049               -
Net cash outflow from operating activities             (11,840)        (30,470)




3 Analysis of Net Funds
                                At   Cash flow       Other   Exchange    At end
                         beginning                non-cash   movement   of year
                           of year               movements
                              $000        $000        $000       $000      $000

Cash in hand, at bank       34,796     (22,897)          -      1,149    13,048
Overdrafts                     (16)         16           -          -         -
Current asset                  136         (20)       (116)         -         -
investments
Total                        34,916     (22,901)       (116)     1,149    13,048






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