Companies: RPT   

Fallen AIM star Regal Petroleum has agreed a £205 million memorandum of understanding with Shell over its Ukrainian assets.

The company, once headed by controversial Romanian entrepreneur Frank Timis, was negotiating a deal over its Mekhediviska-Golotvschinska (MET-GOL) and Svyrydivske (SV) gas and condensate fields with Czech concern MND Exploration and Production. But the two groups couldn’t agree a timetable and Regal, now steered by chief executive officer Neil Ritson, has now reached a 'non-binding' agreement, which could lead to Shell Exploration & Production taking a majority stake.

This gives eight weeks for the two companies to carry out due diligence on the MET-GOL project and negotiate precise terms. If both are satisfied and do a deal, Shell will pay Regal £25 million for 51 per cent of its Jersey subsidiary holding the Ukrainian licences and another £180 million to develop MET-GOL and SV.

Floated at 60p five years ago, shares in Regal soared to 509p by early 2005, but a dry well at Kallirachi in Greece put paid to all that and the price plunged to 34.5p last year. The shares have now climbed back to 173.5p, up 1.5p this morning, valuing the company at £248 million.

They have speculative potential, depending on whether Shell decides to go ahead.

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Regal Petroleum	AIM	£76.72m	36.25p	-0.75p
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Other company articles:
Regal raises £20.5m			04/07/2008
Regal slashes loss			24/06/2008
Exploration Insights by Robert Tyerman			02/06/2008
Regal secures Ukraine rigs			15/05/2008
Discreetly tapping the market			12/02/2008