9th May 2006 13:52
Regal Petroleum PLC09 May 2006 Immediate Release 9 May 2006 REGAL PETROLEUM PLC ("Regal" or "the Company") Ukrainian Update In July 2004 Regal was awarded 100% interests in two 20 year production licencesin respect of the Mekhediviska/Golotvschinska (MEX-GOL) and Svyrydivske (SV) gas/condensate fields in Ukraine. Regal had previously been in a joint venturesince August 1999 with Chernihivnaftogasgeology ("CNGG") in respect of theseconcession areas. In order to clarify the legal actions which have previously been announced bythe Company, summaries are set out below:- 1. Licence Action CNGG brought legal proceedings against its own parent organisation, the Ministryof Environmental Protection ("MEP"), claiming that the correct procedures werenot followed in awarding the two production licences to Regal. At a hearingheld on 10 November 2005, the Kiev City Commercial Court upheld CNGG's claim.Regal joined these proceedings as a third party to protect its interests. Regal appealed the decision of the Kiev City Commercial Court to the Kiev Courtof Appeal. At a hearing of this appeal held on 31 January 2006 the Kiev Courtof Appeal dismissed Regal's appeal and upheld CNGG's claim. As a result of thedecision Regal shut down production at the Company's operations at the MEX-GOLand SV fields. Regal lodged a further appeal to the Supreme Administrative Court of Ukraine aswell as an application to recommence production pending the hearing of suchfurther appeal. At a hearing held on 27 February 2006 the SupremeAdministrative Court of Ukraine granted an order allowing Regal to re-commenceproduction at the fields. On 5 May 2006 Regal's appeal to the Supreme Administrative Court of Ukraine washeard when the Supreme Administrative Court of Ukraine dismissed Regal's appeal.Regal is currently awaiting written details of this decision and will thenlaunch a further appeal to the Supreme Court of Ukraine. In the meantime as aresult of the decision of the Supreme Administrative Court of Ukraine, Regal hasshut down production operations at its GOL/MEX and SV fields in Ukraine. Withinthe further appeal proceedings, Regal is intending to lodge an application foran order to allow production to be re-started pending the hearing of suchfurther appeal. 2. Joint Venture Dissolution Action In May 2005 an action was commenced in Poltava Court seeking orders that theprevious joint venture between Regal and CNGG be dissolved and the physicalassets of the joint venture be distributed between the parties. The assetsconsisted of, inter alia, 6 wells, a gas processing facility to dry gas andrecover condensate with a capacity of 1 million cubic metres per day, pipelinereticulation to the plant and a 13.2 kilometre 325 mm pipeline connecting thegas plant to the main Kursk-Kiev export trunk pipeline. In a hearing of this action on 22 August 2005, the Poltava Court awarded thephysical assets to Regal and compensation to CNGG for its share of the jointventure assets. CNGG lodged an appeal of the decision to the Kiev Court of Appeal. This appealwas heard on 11 October 2005 when the Kiev Court of Appeal dismissed CNGG'sappeal and upheld the original decision. CNGG then lodged a further appeal to the Supreme Commercial Court of Ukraine.This appeal was heard on 7 December 2005 when the Supreme Commercial Court ofUkraine dismissed the appeal thereby ruling in Regal's favour. CNGG lodged a further appeal to the Supreme Court of Ukraine which was heard on20 February 2006 when the Supreme Court of Ukraine ruled in favour of Regal anddismissed the final appeal brought by CNGG. Regal believes in the sanctity of the laws of the Ukraine, is advised by itsUkrainian lawyers that it has complied with the laws of the Ukraine in respectof the grant of its production licences, that the production licences wereawarded in accordance with the applicable legislation in the Ukraine and thattherefore the validity of its production licences will ultimately be upheld. For further information, please contact: Regal Tel: 020 7408 9500 Paul Morgan, Chairman & CEO Buchanan Communications Tel: 020 7466 5000Bobby Morse This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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