Companies: RPT   

Regal Petroleum is raising £80 million, as the stock exchange refers past alleged rule breaches to AIM’s Disciplinary Committee.

Headed since November by Shell veteran David Greer, the battle-scarred company, once headed by the controversial Frank Timis, has conditionally placed shares at 150p to raise £84 million before £4 million expenses, through broker Mirabaud and Strand Partners, its new nominated adviser. Regal says the money will go to exploit and develop gas and condensate fields in the Ukraine.

The company, based at the Old Bailey in London, is now going it alone in the Ukraine after a plan to develop the assets jointly with Shell lapsed late last year. Regal says its operations remained ‘cash-flow positive and profitable’ throughout 2007, with average production from five wells of 5.32 million cubic feet and 275 barrels of condensate a day in the second six months.

Since Greer’s arrival at the helm with a new team, the company has disposed of its assets in Greece, the focus of its troubles when Timis ran the show, and Liberia. Regal says it ended 2007 with nearly £3 million cash and £3.5 million remaining of a £7.25 million drawdown facility.

The company, whose shares hit 509p in 2005, fell from its AIM pedestal when its much-vaunted Kallirachi prospect in Greece proved to be dry. After investigating ‘notifications’ by Regal to the market about drilling at Kallirachi between 2003 and 2005, the London Stock Exchange has told the company it intends to refer alleged breaches of the junior market’s rules to the AIM Disciplinary Committee.

This referral has prompted the Financial Services Authority to discontinue its own investigation of these matters. Regal shares, which slumped to 34.5p by early 2006 before rebounding to 257p last year, now stand at 146.25p, down 0.5p this morning, and remain speculative in the short term.

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