Ukrainian Update

Regal Petroleum PLC
16 January 2007


Immediate Release                                                16 January 2007


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

                         Update on Ukrainian Operations

Regal is pleased to announce an update on the operations being conducted in its
100% owned Mekhediviska/Golotvschinska (MEX-GOL) and Svyrydivske (SV)
gas-condensate fields.

Licence History and Terms

The MEX-GOL and SV field production licences were granted to Regal (100%) in
July 2004 to allow gas and condensate production from the deep Carboniferous
sandstone reservoirs for a period of 20 years. The validity of the production
licences was confirmed by the Supreme Court of Ukraine on 12 December 2006.

Production

The Company is presently producing gas and condensate from four wells on the
MEX-GOL field area and one well on the SV field. Since the wells were re-opened
on 1 August 2006, following the field closures during the licence litigation,
the Company has had uninterrupted production from the MEX-GOL and SV fields. The
average daily production between 1 August and 31 December 2006 was 3.85 mmcf of
gas and 447 bbls of condensate (1134 boe). Average realised sales prices over
this period were $3.05/mcf for gas and $57.34/bbl for condensate.

Workovers

As part of a planned campaign to reactivate dormant wells and increase
production from existing wells the SV-10 well on the SV field was nitrogen
lifted using coiled tubing in early October 2006 and placed on production test
in mid November 2006. During the test phase the well has so far produced an
aggregate of 100 mmcf of gas and 1940 bbls of condensate. The produced
condensate has been sold along with Regal's other production.

It is planned that the SV-10 well will be put on permanent production following
the installation of separation equipment in the vicinity of the well site to
remove condensate and water. The processed gas will be tied in to the nearby
Regal gas pipeline. This new satellite facility, along with the existing main
processing facility, will have the potential for processing gas and condensate
from future workovers and new wells. Based on equipment lead times the tie-in of
the SV-10 well is expected to be completed by mid-year 2007.

A total of five other wells have been identified as short-term candidates for
workover. Early indications suggest that average workover costs will be
approximately $240,000 per well. Studies are currently underway under the
direction of the new management team, using Western European expertise, which
will lead to a decision in early 2007 on the best wells to re-enter. Once this
re-entry work is completed, planned for the 3rd quarter 2007, the results will
strengthen the current production and revenue from the field with an expected
production uplift of at least 40% by end 2007.

Seismic and Reserves

A contract has been signed between the Company and Ukrainian State Enterprise -
Ukrgeofizika to undertake a 3D seismic survey on the Company's behalf covering
100 km2 of the producing area of the MEX-GOL field. The survey will be acquired
and processed by Ukrgeofizika and is expected to be available for interpretation
by July 2007. Mobilisation of the seismic crew is now nearly complete and the
seismic field operations have recently commenced. The survey is anticipated to
cost approximately US$2.5 million to acquire, process and interpret, and a
initial payment of $600,000 has already been made for the mobilisation.

In parallel with the planned seismic acquisition, a reservoir engineering review
has commenced that will lead to the building of a new reservoir model which,
when combined with the 3D seismic and ongoing well studies, will allow field
reserves to be recomputed. The published reserves, audited by RyderScott in
September 2005 and as reported in the Company's Annual Report and Accounts for
the year ended 31 December 2005, are set out in the table below. These reserves
are stated according to the petroleum resources classification system and
definitions of the Society of Petroleum Engineers.

Net Remaining Reserves              Proved      Probable       Total
(as at 31.12.2005)
Oil/Condensate - mmbbls               11.4         13.7          25.1
Gas - bcf                            403.4        407.9         811.3
Total - mmboe                         83.3         86.4         169.7

Development Drilling

The Company is considering the recommencement of drilling operations on the
MEX-103 well that was suspended in 2005 following the licence litigation which
has now been successfully concluded. In addition, several new development
locations have been selected and permits for drilling on these sites are now
being actively sought. Drilling operations on any new well sites are likely to
commence in 3rd quarter 2007 since drilling rigs and materials need to be
sourced.

Full Field Development Plan

With the completion of the planned 3D seismic it is anticipated that a
comprehensive reservoir model of the MEX-GOL field can be created and the
existing full field development plan will be updated. Drilling and facilities
construction can then commence and is expected to be underway before the end of
2007. It is planned that an update of the reserves will also be undertaken in
4th quarter 2007 with the view to issuing an audited revised estimate by year
end. If, as expected, the current 3D operations are successful, it is planned
that a 3D survey will be acquired over the SV field in 2008.

The Company remains committed to realising the full potential of the proved and
probable reserves in its Ukrainian licences. Various funding mechanisms are
under investigation to allow the Company to effectively take forward the
development program.

New Technical Staff

Mr Les Devine has been engaged as Manager International Drilling, reporting to
the Company's Chief Operating Officer, to ensure that Regal has access to the
best available drilling practices and technology. Les has 30 years of
international experience gained in operations in Europe, India and Algeria,
including 20 years working with drilling contractors including Smedvig and
Deutag. He will initially be based in the Ukraine.


For further information, please contact:

Regal                                                Tel: [phone]

Neil Ritson, Chief Executive Officer
Frank Scolaro, Chairman


Definitions:

km                                  kilometres
mcf                                 thousand cubic feet
mmcf                                million cubic feet
bcf                                 billion cubic feet
bbls                                barrels of oil
mmbbls                              million barrels of oil
boe                                 barrels of oil equivalent
mmboe                               million barrels of oil equivalent


In accordance with the guidelines of the AIM market of the London Stock
Exchange, Neil Ritson BSc (Hons) Geophysics, FGS, Chief Executive Officer of
Regal Petroleum plc, is the qualified person that has reviewed the technical
information contained in this press release.



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