Energees Investments And Regal Petroleum Announce Increased Recommended Partial Cash Offer

LONDON, February 6, 2011 /PRNewswire/ --

- Following the announcement on 10 December 2010 of a recommended cash offer for Regal, Energees Investments (the principal holding company of the Smart Holding Group) and Regal are pleased to announce that they have reached agreement on the terms of a revised, increased, recommended partial cash offer to be made by Energees Management. - The revised offer will be structured as a partial offer for up to 224,446,485 Regal Shares (representing approximately 70 per cent. of the fully diluted share capital of the Company) at 38 pence in cash per Regal Share (the Increased Partial Offer). - The terms of the Increased Partial Offer value Regal's fully diluted share capital at approximately GBP121.8 million and the Regal Shares subject to the Increased Partial Offer at approximately GBP85.3 million. - The Increased Partial Offer allows those Regal Shareholders, who accept in respect of all of their Regal Shares, the potential for a full exit at 38 pence in cash per Regal Share (although acceptances in respect of more than 70 per cent. of a Shareholder's Regal Shares may be subject to scaling down as set out in paragraph 2 of this Announcement). - The consideration of 38 pence per Regal Share under the terms of the Increased Partial Offer represents a: - 204% premium to the closing price of 12.5 pence per Regal Share on 24 November 2010, being the last business day before the commencement of the Offer Period; - 147% premium to the average closing price of 15.4 pence per Regal Share for the one month period prior to the commencement of the Offer Period; and - 58% premium to the offer price of 24 pence per Regal Share under the Original Offer. - The Increased Partial Offer will also allow those Regal Shareholders, who do not want to accept the Increased Partial Offer in respect of all of their Regal Shares, to retain an ongoing equity interest in Regal in respect of some or all of their holding. - The Increased Partial Offer has a clearly defined timetable, is not subject to Ukrainian anti-trust clearance (which was received by Energees Management on 20 January 2011) and will enable (subject to the Increased Partial Offer being declared wholly unconditional on 20 February 2011) cash consideration to be despatched to Regal Shareholders on or around 8 March 2011 (once any scaling down exercise has been completed). - Smart Holding Group is one of the largest, diversified groups of companies in Ukraine and brings extensive experience of operating in Ukraine and in the natural resources sector. - The Increased Partial Offer will result in the Smart Holding Group obtaining majority ownership of Regal and will give local, Ukraine-based shareholder support to Regal management, as well as providing value and certainty to Regal Shareholders. - The Regal Directors, who have been so advised by BofA Merrill Lynch, consider the terms of the Increased Partial Offer to be fair and reasonable. The background to and reasons for the Regal Directors' recommendation are summarised in paragraph 6 of this Announcement. In providing its advice, BofA Merrill Lynch has taken into account the commercial assessments of the Regal Directors. - The Regal Directors have terminated Regal's discussions with Heamoor and Geo-Alliance, having concluded that the Increased Partial Offer is the best and only firm option currently available to Regal Shareholders and on the basis that the Increased Partial Offer delivers greater certainty of value for Regal Shareholders than their proposed transaction or Regal remaining an independent quoted entity without the majority ownership of Energees Management. - The Increased Partial Offer Document is being published, and will be posted to Regal Shareholders (other than persons in a Restricted Jurisdiction), today together with the Approval Form and New Form of Acceptance. - Energees Management has received irrevocable undertakings to accept and approve the Increased Partial Offer from certain Regal Shareholders, as well as Regal Directors, in respect of 42,509,411 Regal Shares, representing approximately 13.35 per cent. of Regal's existing issued ordinary share capital. 15,484,800 of these Regal Shares, representing approximately 4.86 per cent. of the existing issued ordinary share capital of Regal, relate to long derivative contracts in respect of which the holder has undertaken to use reasonable endeavours to procure (so far as it is able) acceptance and approval of the Increased Partial Offer. Further details are set out below. - The Increased Partial Offer must be declared unconditional as to acceptances by 20 February 2011 (unless the Panel otherwise consents) and Regal Shareholders are therefore urged to return their New Forms of Acceptance and Approval Forms as soon as possible.

Commenting on the Increased Partial Offer, Alexey Pertin, Director of Energees Investments and CEO of the Smart Holding Group, stated that:

"Our Increased Partial Offer is a carefully considered means of providing all shareholders a complete solution today.

Those seeking ongoing equity exposure can select equity and maximise their ongoing stake in Regal, knowing exactly what they are investing in - a re-energized Regal with the committed local country backing of Energees Management - without taking risk on assets, strategy and management which may be unfamiliar to Regal Shareholders.

In addition, with the 147% one month average premium available under the Increased Partial Offer, Energees Management is providing Regal shareholders the option to enjoy a highly attractive and quickly realisable cash exit (potentially for up to 100% of their shareholding) at highly compelling valuation levels.

We are excited about supporting Regal in the next stage of its journey and look forward to working to realise value for all stakeholders, today, tomorrow and in the future."

Keith Henry, Chairman of Regal, commented:

"Against the background of operational, legal and funding challenges faced by the Company, your Board is pleased to have reached a much improved agreement with Energees Management that allows Regal Shareholders to receive a substantially increased cash element of consideration as well as retaining the option of maintaining equity exposure in Regal.

Based on work completed to date in connection with the Geo Proposal by Regal and its advisers, and the Board's assessment of the certainty of being able to finalise all required workstreams and to announce a binding transaction with Heamoor and Geo-Alliance, the Board of Regal has concluded that the Increased Partial Offer represents a superior proposition with respect to certainty of value by comparison to the Geo Proposal, that the Increased Partial Offer is the best and only firm option currently available to Regal Shareholders and therefore intends unanimously to recommend shareholders to accept and approve the Increased Partial Offer"

This summary should be read in conjunction with, and is subject to, the full text of this Announcement. The Conditions to, and certain further terms of, the Increased Partial Offer are set out in the Original Offer Document as amended by this Announcement, the Increased Partial Offer Document, the Approval Form and the New Form of Acceptance. Appendix 1 to this Announcement contains the sources and bases of information used in this Announcement. Appendix 2 to this Announcement contains details of the irrevocable undertakings. Appendix 3 to this Announcement contains the definitions of certain expressions used in this summary and in this Announcement.

In this Announcement all references to: (a) "pounds", "GBP" "p" or "pence" are to the lawful currency of the United Kingdom; and (b) "dollars", "$", "Cent" or "cents" are to the lawful currency of the United States.

This Announcement is not intended to be and does not constitute, or form any part of, an offer to sell or the solicitation of an offer to subscribe for or buy any securities, nor shall there be any sale, issue or transfer of the securities referred to in this Announcement in or into any jurisdiction in contravention of any applicable law.

The Increased Partial Offer will be made solely by means of the Increased Partial Offer Document and the Approval Form and the New Form of Acceptance accompanying the Increased Partial Offer Document, which will, together with the Original Offer Document, contain the full terms and conditions of the Increased Partial Offer, including details of how it may be accepted.

BofA Merrill Lynch is acting exclusively for Regal and no-one else in connection with the Increased Partial Offer and will not be responsible to anyone other than Regal for providing the protections afforded to clients of BofA Merrill Lynch or for providing advice in relation to the Increased Partial Offer or any other matter referred to in this Announcement.

UBS is acting exclusively for Energees Investments and Energees Management and no-one else in connection with the Increased Partial Offer and will not be responsible to anyone other than Energees Investments and Energees Management for providing the protections afforded to clients of UBS or for providing advice in relation to the Increased Partial Offer or any other matter referred to in this Announcement.

Overseas Jurisdictions

The distribution of this Announcement in jurisdictions other than the UK and the availability of the Increased Partial Offer to Shareholders who are not resident in the UK may be affected by the laws of relevant jurisdictions. Therefore any persons who are subject to the laws of any jurisdiction other than the UK or Shareholders who are not resident in the UK will need to inform themselves about, and observe, any applicable requirements. Except as required by applicable law, copies of this Announcement are not being, and may not be, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction.

In particular, the Increased Partial Offer is not, unless decided otherwise by Energees Management, being made in or into, and is not capable of acceptance in or from, any Restricted Jurisdiction. Persons receiving this Announcement (including, without limitation, custodians, nominees or trustees) should observe these restrictions and should not send or distribute documents in or into any Restricted Jurisdiction.

This Announcement has been prepared for the purpose of complying with English law and the Takeover Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the UK.

US Holders should note that the Increased Partial Offer relates to the shares of a UK company, is subject to UK disclosure requirements (which are different from those of the United States) and that the Increased Partial Offer Document and any other documents relating to the Increased Partial Offer have been or will be prepared in accordance with the Takeover Code and the UK disclosure requirements, format and style, all of which differ from those in the United States. Financial information included in this Announcement has been prepared, unless specifically stated otherwise, in accordance with accounting standards applicable in the UK and thus may not be comparable to the financial information of United States companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

The Increased Partial Offer will be made in the United States pursuant to applicable US tender offer and securities laws and otherwise in accordance with the requirements of the Takeover Code. Accordingly, the Increased Partial Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments that are different from those applicable under US domestic tender offer procedure and law.

The receipt of cash pursuant to the Increased Partial Offer by a US Holder may be a taxable transaction for United States federal income tax purposes and under applicable United States state and local, as well as foreign and other, tax laws. Each Shareholder is urged to consult his independent professional adviser immediately regarding the tax consequences of acceptance of the Increased Partial Offer.

It may be difficult for US Holders to enforce their rights and claims arising out of United States federal securities laws, since Energees Management and Regal are located in countries other than the United States, and some or all of their officers and directors may be residents of countries other than the United States. US Holders may not be able to sue a non-United States company or its officers or directors in a non-United States court for violations of United States securities laws. Further, it may be difficult to compel a non-United States company and its affiliates to subject themselves to a United States court's judgement.

To the extent permitted by applicable law, in accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Energees Management or its nominees, or its brokers (acting as agents) or their respective affiliates, may from time to time make certain purchases of, or arrangements to purchase Regal Shares outside of the United States, other than pursuant to the Increased Partial Offer, until the date on which the Increased Partial Offer becomes effective, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Such purchases or arrangements to purchase will comply with all applicable UK rules, including the Takeover Code, the rules of the London Stock Exchange and Rule 14e-5(b) of the US Exchange Act to the extent applicable. Any information about such purchases will be disclosed as required in the UK, will be reported to the Regulatory News Service of the London Stock Exchange and will be available on the London Stock Exchange website at http://www.londonstockexchange.com/prices-and-news/prices-news/home.htm.

Forward-Looking Statements

This Announcement contains a number of "forward-looking statements" relating to Energees Management, Energees Investments, the Smart Holding Group and the Regal Group and the business sectors in which they operate. Generally, the words "will", "may", "should", "continue", "believes", "expects", "intends", "anticipates", "forecast", "plan" and "project" or similar expressions identify forward-looking statements. Such statements reflect the relevant company's current views with respect to future events and are subject to risks, assumptions and uncertainties that could cause the actual results to differ materially from those expressed or implied in the forward-looking statements. Many of these risks, assumptions and uncertainties relate to factors that are beyond the relevant company's ability to control or estimate precisely, such as future market conditions, changes in general economic and business conditions, introduction of competing products and services, lack of acceptance of new products or services and the behaviour of other market participants. Although the expectations reflected in such forward-looking statements considered are reasonable, there can be no assurance that such expectations will prove to have been correct. You should not, therefore, place undue reliance on these forward-looking statements, which speak only as of the date of this Announcement.

Disclosure requirements of the Takeover Code

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified.

An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at http://www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44(0)20-7638-0129.

Publication on website

In accordance with the Takeover Code, a copy of this Announcement, the Increased Partial Offer Document, the New Form of Acceptance and the Approval Form will be available at http://www.regalpetroleum.co.uk and http://www.smart-holding.ua by no later than 1.00p.m. (London time) on the date of this Announcement.

Not for Release, Publication or Distribution in, Into or From Any Jurisdiction Where to do so Would Constitute a Violation of the Relevant Laws of Such Jurisdiction

Energees Investments and Regal Petroleum Announce Increased Recommended Partial Cash Offer

1 Introduction

Following the announcement on 10 December 2010 of a recommended cash offer for Regal, Energees Investments and Regal are pleased to announce that they have reached agreement on the terms of a revised, increased, recommended partial cash offer to be made by Energees Management.

The revised offer will be structured as a partial cash offer for up to 224,446,485 Regal Shares (representing approximately 70 per cent. of the fully diluted share capital of the Company) at 38 pence per Regal Share (the Increased Partial Offer).

The consideration of 38 pence per Regal Share under the terms of the Increased Partial Offer represents a:

- 204% premium to the closing price of 12.5 pence per Regal Share on 24 November 2010, being the last business day before the commencement of the Offer Period; - 147% premium to the average closing price of 15.4 pence per Regal Share for the one month period prior to the commencement of the Offer Period; and - 58% premium to the offer price of 24 pence per Regal Share under the Original Offer.

2 The Increased Partial Offer

The Increased Partial Offer, which will be subject to the Conditions and further terms set out in Appendix I to the Original Offer Document as amended by this Announcement, the Increased Partial Offer Document, the Approval Form and the New Form of Acceptance, will be made on the following basis:

for each Regal Share 38 pence in cash

The Increased Partial Offer values the Company's fully diluted ordinary share capital at approximately GBP121.8 million and the Regal Shares subject to the Increased Partial Offer at approximately GBP85.3 million.

Regal Shareholders may accept the Increased Partial Offer in respect of any number of their Regal Shares or none at all. Subject to the Increased Partial Offer becoming unconditional in all respects, acceptances will be met in full to the extent that they are for up to 70 per cent. (the Relevant Percentage) of an accepting Regal Shareholder's registered holding of Regal Shares at the Record Date. Acceptances in excess of this amount will be met to the extent that other Regal Shareholders do not accept the Increased Partial Offer or accept in respect of less than their Relevant Percentage. Regal Shares tendered in excess of those representing the Relevant Percentage of an accepting Regal Shareholder's holding at the Record Date will be accepted from each Regal Shareholder in the same proportion to the number tendered to the extent necessary to enable Energees Management to acquire 224,446,485 Regal Shares pursuant to the Increased Partial Offer.

In the event that scaling down, as described above, is required in respect of any accepting Regal Shareholders, Energees Management will make an announcement stating the basis of such scaling down by 9.00 a.m. on the second business day following the closing of the Increased Partial Offer.

Regal Shareholders who have already accepted the Original Offer in respect of some or all of their Regal Shares will be deemed to have accepted the Increased Partial Offer in respect of the same number of Regal Shares (subject to scaling down on the basis set out above to the extent this exceeds the Relevant Percentage of their holding at the Record Date). Such Shareholders need not complete a New Form of Acceptance or submit a further electronic instruction unless they wish to reduce the number of Regal Shares the subject of their acceptance, however if they approve of the Increased Partial Offer they should complete and return an Approval Form (once received by them) in accordance with the procedures set out in the Increased Partial Offer Document and paragraph 14 below (whether they hold their Regal Shares in certificated or uncertificated form).

The 224,446,485 Regal Shares for which the Increased Partial Offer is being made represent approximately 70 per cent. of the fully diluted share capital of the Company. The Increased Partial Offer will extend, subject to the Conditions and further terms set out in the Original Offer Document as amended by this Announcement, the Increased Partial Offer Document, the Approval Form and the New Form of Acceptance, to any new Regal Shares unconditionally allotted or issued fully paid (or credited as fully paid) on or after the date the Increased Partial Offer is made and prior to the Record Date.

Regal Shareholders should note that the Relevant Percentage has been calculated on the basis of the fully diluted share capital of the Company (being 320,637,836 Regal Shares) and it may change slightly if the number of Regal Shares in issue on the Record Date differs from this number.

The Regal Shares will be acquired pursuant to the Increased Partial Offer fully paid with full title guarantee and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other third party rights or interests of any nature whatsoever and together with all rights now and hereafter attaching to them, including, without limitation, the right to receive and retain all dividends and other distributions (if any) declared, made or paid in respect of the Regal Shares on or after 10 December 2010.

In the event that the Increased Partial Offer becomes unconditional in all respects, Energees Management will hold Regal Shares carrying more than 50 per cent. of the voting rights of Regal, and Energees Management will be free (subject to Rule 36.3 of the Takeover Code) to acquire further Regal Shares without incurring any obligation under Rule 9 of the Takeover Code to make a general offer.

Following a successful partial offer, Rule 36.3 of the Takeover Code prevents the offeror, any person acting in concert with the offeror in the course of the partial offer and any person who is subsequently acting in concert with any of them from acquiring any interest in the shares of the offeree during a period of 12 months after the end of the offer period without the consent of the Panel.

Under Rule 36.5 of the Takeover Code, approval of the Increased Partial Offer by Regal Shareholders is required and the Increased Partial Offer will be conditional upon such approval being obtained. For this condition to be satisfied, Regal Shareholders, who are independent of Energees Management and persons acting in concert with Energees Management, and represent more than 50 per cent. of the voting rights in Regal must give their approval to the Increased Partial Offer. If such approval is not obtained, the Increased Partial Offer will lapse. All Regal Shareholders who approve of the Increased Partial Offer (whether or not they wish to accept the Increased Partial Offer and whether they hold their Regal Shares in certificated or uncertificated form) should therefore complete and return the Approval Form (once received by them) in accordance with procedures set out in the Increased Partial Offer Document and paragraph 14 below.

3 Background to and reasons for the Increased Partial Offer

Energees Management has considered the feedback it has received from Regal Shareholders and has formulated the partial offer structure in order that Regal Shareholders have the option to receive a combination of cash and retain part of their holding in Regal Shares. In addition, Regal Shareholders may elect to accept more cash or retain more shares, although elections for increased amounts of cash are subject to being scaled down as referred to above and the ability for a Regal Shareholder to retain more than 30 per cent. of its shareholding is subject (inter alia) to sufficient acceptances being received in aggregate to satisfy the acceptance condition set out in paragraph 13 below.

The price of 38 pence per Regal Share under the Increased Partial Offer means that Regal Shareholders can receive a highly compelling cash element of consideration representing a:

In addition, the terms of the Increased Partial Offer are such that:

- Regal Shareholders are able to maintain a meaningful stake in Regal of 30 per cent. of their current shareholding, and a higher level than this should they wish to do so (subject, inter alia, to sufficient acceptances being received in aggregate to satisfy the acceptance condition set out in paragraph 13 below) and in either scenario, therefore, share in the performance of Regal under the new majority ownership of Energees Management who are familiar with conducting business in Ukraine; - as existing shareholders in Regal, Regal Shareholders know the business and assets to which their shareholding relates and can ascribe value to their shareholding; and - as set out below, Regal's admission to trading on AIM will be maintained, preserving the corporate governance and minority shareholder protections for Regal Shareholders.

Finally, the partial offer structure also enables Regal Shareholders to exit Regal for cash via the Increased Partial Offer (for at least 70 per cent. of their shareholding) and/or, subject to market liquidity at the relevant time, to continue to be able to do so through subsequent sales of any retained interest in Regal Shares following completion of the Increased Partial Offer, as Regal will continue to be admitted to trading on AIM.

It should also be noted that Ukrainian anti-trust clearance was received by Energees Management on 20 January 2011, meaning that condition 1(b) to the Original Offer and the Increased Partial Offer is now satisfied.

With regard to the proposals announced on 18 January 2011 by Regal to be made by Heamoor Limited (Heamoor) and Geo-Alliance Oil-Gas Public Limited (Geo-Alliance), the Increased Partial Offer compares very favourably:

- the cash consideration per Regal Share available to Regal Shareholders is 13 pence more than the 25 pence per Regal Share available to Shareholders under the proposed purchasing commitment or proposed pre-conditional cash offer as set out in the announcement on 18 January 2011 as referred to above (which represents a premium of 52%); - the strategy for the Regal Group is known under the terms of the Increased Partial Offer (see paragraph 4 below); - the Heamoor potential offer includes, as part of the proposed reverse takeover of Regal, a contribution of Geo-Alliance assets which may be unfamiliar to Regal shareholders and the value of which may, in Energees Management's view, not be certain, as, notwithstanding published data on these assets, such data depends on a number of assumptions, for instance as to oil price and costs, which, in Energees Management's view, are uncertain; - the Heamoor potential offer is more complex than the Increased Partial Offer and is subject to a number of conditions, including anti-trust approval(s) of the Anti Monopoly Committee of Ukraine; and - in order for Heamoor/Geo-Alliance to present its proposals to shareholders, considerable documentation will need to be agreed, approved and published, and a general meeting of Regal Shareholders will need to be held, both of which could contribute to an extended timetable when compared to the timetable of the Increased Partial Offer. The Increased Partial Offer has a clearly defined timetable and is available for acceptance by Regal Shareholders until 20 February 2011 and, subject to the Increased Partial Offer being declared wholly unconditional on 20 February 2011, cash consideration will be despatched to Regal Shareholders on or around 8 March 2011 (once any scaling down exercise has been completed).

4 Strategy and Board composition

Energees Management, as part of the Smart Holding Group, has in place a clear strategy for supporting Regal's continued development.

Financial Support and Capital Investment

As majority owner of Regal following the Increased Partial Offer becoming, or being declared, wholly unconditional, Energees Management will be committed to developing the Regal Group. Energees Management recognises that in order to develop the Regal business, investment of further capital will be required. While Energees Management has made no firm decision on the form of such investment and will utilise the most efficient structure that meets the requirements of the Regal Group in the prevailing circumstances at the time, it is anticipated that further investment to fund the Regal Group's required capital expenditure programme would take the form of shareholder loans.

It is intended that the injection of further capital will allow Energees Management and Regal to explore options to increase productivity which, in addition to growing productivity of Regal's existing wells, may also include, subject to appropriate opportunities arising at the relevant time which might benefit the Regal Group, potential acquisitions and/or joint usage of existing State controlled wells and, subsequently, the exploration and drilling of new wells.

Experienced management team

Energees Management believes that the experience of the Smart Holding Group as a whole, and its established track record in operating in Ukraine's natural resources sector, as well as management with oil & gas expertise, will facilitate the efficient development of the Regal business. Energees Management also believes that Regal would form an important platform for further growth, potentially leading to the creation of a market leader amongst Ukraine-focused independent E&P players.

Operational and legal support

Energees Management intends to explore with the Regal Directors ways in which the operational expenses of Regal can be reduced and revenue increased. As part of the Smart Holding Group, Regal will also have access to its management team, whom Energees Management believes are well placed to address the legal issues, particularly in connection with the licence disputes, facing the Company. Being one of the largest diversified groups of companies in Ukraine, Smart Holding Group has extensive experience of operating companies in Ukraine which will be valuable in assisting Regal to address and seek to mitigate any existing and potential legal risks that may face the Regal business.

Proposed Board appointments and relationship agreement

Following completion of the Partial Offer, a number of changes to the Board of Regal are contemplated. It is intended that Alexey Tymofeyev, currently First Deputy CEO of JSC Smart Holding UA, will become CEO of Regal. Prior to joining the Smart Holding Group, Alexey held positions at NJSC Naftogaz of Ukraine, the Ukrainian state oil and gas company, Geo-Alliance and SC Ukrgazvydobuvannya, a subsidiary of NJSC Naftogaz. It is also intended that Alexey Pertin, currently a director of Energees Investments and Energees Management and CEO of JSC Smart Holding UA, and Denis Rudev, a Director of Energees Management and CFO of JSC Smart Holding UA, will also be appointed to the Board as executive directors of Regal. Robert Wilde and Hendrikus Verkuil will continue in their respective roles as Finance Director and Chief Operating Officer. Keith Henry will continue in his role as Chairman of Regal, on a non-executive basis and the current, existing non-executive directors of Regal, Adrian Coates and Alastair Graham, will remain in place.

Energees Management has confirmed that Regal will remain an independently managed public company and that it has no intention to cancel Regal's admission to trading on AIM in the next 12 months. Energees Management has agreed that it will enter into a relationship agreement to regulate the relationship between the Smart Holding Group and Regal. The principal purpose of the relationship agreement is to provide that the relationship between members of the Smart Holding Group and the Regal Group will be conducted independently and on an arm's length basis. The agreement will address, inter alia, the composition of the Regal Board (to ensure a fair representation of non-executive directors and the entitlement of Energees Management to appoint three directors to the Board (one of which will be the CEO)) and will preclude any of the directors of Regal, who are interested in the Smart Holding Group, from voting at meetings of the Board on matters in which the Smart Holding Group is interested.

5 Recommendation

The Regal Directors, who have been so advised by BofA Merrill Lynch, consider the terms of the Increased Partial Offer to be fair and reasonable. In providing its advice, BofA Merrill Lynch has taken into account the commercial assessments of the Regal Directors.

Accordingly, the Regal Directors intend unanimously to recommend that Shareholders accept and approve the Increased Partial Offer.

The Regal Directors who hold Regal Shares entered into irrevocable undertakings to accept the Original Offer in respect of their own beneficial holdings (and, where applicable, those of their spouses) totalling, in aggregate, 577,245 Regal Shares, representing approximately 0.18 per cent. of Regal's existing issued share capital (the Director Irrevocable Undertakings) and have tendered acceptances in respect of such Regal Shares. These acceptances will be treated as acceptances of the Increased Partial Offer in respect of 577,245 Regal Shares. The Director Irrevocable Undertakings remain in full force and effect and binding even in the event of a higher competing offer for Regal and the Regal Directors can not withdraw such acceptances. In addition, the Regal Directors will tender Approval Forms in respect of the Regal Shares the subject of the Director Irrevocable Undertakings. Further details on the Director Irrevocable Undertakings (together with the further irrevocable undertakings referred to in paragraph 7 below) are contained in Appendix 2 to this Announcement.

6 Background to and reasons for the recommendation

In September 2010, following a set of disappointing drilling results and against the backdrop of Regal licences in Ukraine being challenged, Regal initiated a strategic review. The review concluded that the development of the Company's Ukrainian asset required further technical studies to evaluate the reservoir potential and any impact on the Company's reserves estimate, as well as to determine how much investment capital would be required to fund future development. As a result of the suspension of production in Ukraine, the disappointing results from drilling and the requirement for further technical studies, Regal considers it likely that its current published reserves would be revised downwards, both in terms of quantum and category, in the event that the proposed technical studies and the subsequent trials of alternative completion technologies, such as hydraulic fracturing, were to prove unsuccessful in improving well productivity.

As part of the strategic review, the Company entered into negotiations with several parties, including Energees Management and Heamoor and Geo-Alliance, with respect to potential corporate options. This resulted in the announcement of the Original Offer by Regal and Energees Investments on 10 December 2010.

The Board of Regal recommended the Original Offer from Energees Management of 24 pence per Regal Share in cash, having concluded that the Original Offer represented better value and certainty for Regal Shareholders than the Company remaining an independent quoted entity at that time. In recommending the Original Offer, the Board of Regal took the following facts into consideration:

- the technical difficulties associated with bringing the wells to sustainable commercial production rates; - the uncertainty in the outcomes of further reservoir appraisal and the potential impact, if any, on the reserves estimate; - loss of operational revenue as a result of the suspension order and uncertainty as to when production may be allowed to resume; - additional capital requirements for further appraisal and field development; and - the ongoing legal and political risks surrounding the Ukrainian operations.

Shortly after the Original Offer was announced, Heamoor announced, pursuant to Rule 2.4 of the Takeover Code, its interest in making an offer to acquire the Company or, agreeing a potential business combination with the Company. On 18 January 2011, Regal announced the details of a non-binding proposal from Heamoor and Geo-Alliance (the Geo Proposal), which involved, inter alia, a proposed reverse take-over of Geo-Alliance by Regal, with an option for Regal Shareholders to sell their shares to Heamoor at a price of 25 pence per Regal Share for three months following completion of the reverse take-over. The proposed reverse take-over of Geo-Alliance envisaged that Regal would acquire Geo-Alliance, in exchange for the issue of new Regal Shares to the shareholders of Geo-Alliance, representing not more than 70 per cent. of Regal's enlarged share capital post the issue of new Regal Shares. As such transaction would constitute a reverse take-over under the AIM Rules, the announcement of the proposed transaction with Geo-Alliance resulted in the suspension of trading in Regal Shares on AIM.

To date, with the aim of securing for Regal Shareholders a superior offer to the Original Offer of 24 pence per share, the Regal Board and Regal's advisers have been working intensively with Heamoor and Geo-Alliance towards reaching a firm, binding announcement of a transaction on the terms outlined in the announcement of 18 January 2011. Given the complex nature of the Geo Proposal, which involves extensive due diligence and documentary requirements for a reverse take-over, the required re-admission of the enlarged group to trading on AIM, as well as the timetable constraints imposed by the Takeover Code, Regal negotiated and agreed with Geo-Alliance and its shareholders a cost coverage agreement whereby the fees, costs and expenses properly incurred by the Regal Group solely in connection with the consideration, negotiation and documenting of the Geo Proposal, would be reimbursed, subject to a maximum amount.

The Increased Partial Offer has been announced today by Energees Management on the condition that Regal terminate its discussions with Heamoor and Geo-Alliance towards reaching a binding transaction on the terms previously announced.

Based on work completed to date in connection with the Geo Proposal by Regal and its advisers and the Board's assessment of the certainty of being able to finalise all required workstreams and to announce a binding transaction with Heamoor and Geo-Alliance by 10 February 2011, the Board of Regal has concluded that the Increased Partial Offer represents a superior proposition with respect to certainty of value by comparison to the Geo Proposal.

The Board of Regal has concluded that the Increased Partial Offer is the best and only firm option currently available to Regal Shareholders. The Board's recommendation of the Increased Partial Offer has taken the following into consideration:

- the revised, increased, cash consideration per share offered by Energees Management; - Energees Management's receipt of approval from the Anti-Monopoly Commission of Ukraine; - the ability for Regal Shareholders to maintain a meaningful stake in Regal under the new majority ownership of Energees Management; - greater certainty of value for Regal Shareholders than: a) the proposed transaction with Heamoor and Geo-Alliance; or b) the Company remaining an independent quoted entity without the majority ownership of Energees Management; - Smart Group's experience and successful record in Ukraine, as well as its commitment to provide the operational, legal, management and financial support to Regal; - there is no guarantee that any offer or proposal from Heamoor and/or Geo-Alliance will ultimately be put to Regal Shareholders within the timetable requirements of the Takeover Code; and - the partial offer structure enables Regal Shareholders, depending on their objectives, to elect to receive more or less cash as consideration (subject to scaling down on the basis set out in paragraph 2 of this Announcement) and allows those seeking ongoing equity exposure to Regal to select equity and maximise their ongoing stake in Regal.

7 Irrevocable undertakings

In addition to the irrevocable undertakings given by the Regal Directors (as referred to in paragraph 5 above) Energees Management has received: (i) irrevocable undertakings from each of Renaissance Securities (Cyprus) Limited and Hadron Capital LLP to accept and approve the Increased Partial Offer in respect of a total of 26,447,366 Regal Shares (representing approximately 8.31 per cent. of the existing issued ordinary share capital of Regal); and (ii) as part of the irrevocable undertaking from Hadron Capital LLP, an undertaking to use its reasonable endeavours to procure (so far as it is able) that a further 15,484,800 Regal Shares (in respect of which it holds its interest through long derivative contracts and representing approximately 4.86 per cent. of the existing issued ordinary share capital of Regal) will be assented to, and approve, the Increased Partial Offer (the New Irrevocable Undertakings). The New Irrevocable Undertakings remain binding including in the event of a competing offer being made for Regal and will only lapse if the Increased Partial Offer lapses or is withdrawn.

Energees Management has therefore received (in aggregate and taking into account the Director Irrevocable Undertakings referred to in paragraph 5 above) irrevocable undertakings to accept and approve (or, in the case of the New Irrevocable Undertaking given by Hadron Capital LLP to use its reasonable endeavours to procure (so far as it is able) that the 15,484,800 Regal Shares represented by long derivative contracts are assented to and approve) the Increased Partial Offer in respect of 42,509,411 Regal Shares, representing approximately 13.35 per cent. of Regal's existing issued ordinary share capital.

Further details of the Director Irrevocable Undertakings and the New Irrevocable Undertakings are contained in Appendix 2 to this Announcement.

8 Financing of the Increased Partial Offer and cash confirmation

Full acceptance of the Increased Partial Offer will result in the payment by Energees Management of approximately GBP85.3 million in cash.

The aggregate cash consideration payable by Energees Management will be provided from existing cash resources.

UBS Investment Bank, financial adviser to Energees Investments and Energees Management, is satisfied that resources are available to Energees Management sufficient to satisfy full acceptance of the Increased Partial Offer.

9 Regal LTIP

The Increased Partial Offer will extend to any Regal Shares issued or unconditionally allotted or issued fully paid (or credited as fully paid) on or after the date the Increased Partial Offer is made and before the Record Date (or such earlier date as Energees Management may, subject to the Takeover Code, determine), including those Regal Shares allotted or issued as a result of the exercise or vesting of options or awards under the Regal LTIP. Appropriate proposals were made by Energees Management to Regal LTIP option holders on 23 December 2010. Forms of instruction that have already been returned in connection with such proposals will remain valid with regard to proposals to be made in connection with the Increased Partial Offer (subject to scaling down on the basis set out in paragraph 2 of this Announcement and subject to any written instructions to the contrary received from the relevant Regal LTIP option holders). Further details in connection with proposals to be made to Regal LTIP holders will be sent as soon as practicable.

10 Inducement Fee

Energees Management and Regal have entered into an inducement fee agreement dated 6 February 2011, under the terms of which Regal has agreed to pay Energees Management an inducement fee of GBP852,896 (equal to one per cent. of the value of the Regal Shares the subject of the Increased Partial Offer based on the price of 38 pence per Regal Share under the Increased Partial Offer). The inducement fee would be payable if, prior to the Increased Partial Offer lapsing or being withdrawn, one or more Alternative Offers are announced and any of such Alternative Offers subsequently become effective, become or are declared unconditional in all respects or are otherwise completed. An Alternative Offer would include implementation of the proposals (announced on 18 January 2011 by Regal) made by Heamoor and Geo-Alliance, or any revisions thereto.

11 Interests in Regal

Neither Energees Management nor any of the directors of Energees Management, nor, so far as the directors of Energees Management are aware, any person acting in concert with Energees Management for the purposes of the Increased Partial Offer, has any interest in, right to subscribe for, or has borrowed or lent any Regal Shares or securities convertible or exchangeable into Regal Shares (Regal Securities), nor does any such person have any short position (whether conditional or absolute and whether in the money or otherwise) including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery or any arrangement in relation to Regal Securities.

For these purposes, "arrangement" includes any indemnity or option arrangement or any agreement or understanding, formal or informal, of whatever nature, relating to Regal Securities which may be an inducement to deal or refrain from dealing in such securities.

12 Overseas Shareholders

The availability of the Increased Partial Offer or the distribution of this Announcement to Shareholders who are not resident in the UK may be affected by the laws of relevant jurisdictions in which they are located. Shareholders who are in doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

This Announcement does not constitute an offer for sale of any securities or an offer or an invitation to purchase any securities.

The Increased Partial Offer Document will be published and will be despatched to Regal Shareholders today, together with the New Form of Acceptance and Approval Form. Shareholders are advised to read carefully the Increased Partial Offer Document as it will contain further details in relation to overseas shareholders of Regal.

13 Terms and conditions of the Increased Partial Offer

The Increased Partial Offer will be on the terms and subject to the conditions set out in Appendix I to the Original Offer Document save as set out in this Announcement, the Increased Partial Offer Document, the Approval Form and the New Form of Acceptance and in particular as set out below:

- references in such Appendix I to the 'Offer' shall be deemed to be references to the Increased Partial Offer; - except where the context requires otherwise, any references in such Appendix I to 'Form of Acceptance' means the New Form of Acceptance; - the Increased Partial Offer will not be subject to the condition set out in paragraph 1(a) of such Appendix I which shall be deleted accordingly, and instead the following new conditions 1(a) and 1(a)(a) will be substituted:

1(a) valid acceptances being received (and not, where permitted, withdrawn) in respect of 224,446,485 Regal Shares (or such lesser number of Regal Shares as Energees Management may decide) by not later than 1.00 p.m. (London time) on 20 February 2011 (or such later time(s) and/or date(s) as Energees Management may, with the consent of the Panel or in accordance with the Takeover Code and applicable US tender offer rules and securities laws, decide), provided that this condition shall not be satisfied unless Energees Management and/or any of its wholly-owned subsidiaries shall have acquired, or agreed to acquire, whether pursuant to the Increased Partial Offer or otherwise, shares in Regal carrying in aggregate more than 50 per cent. of the voting rights then normally exercisable at general meetings of Regal. For the purposes of this condition, shares which have been unconditionally allotted but not issued before the Increased Partial Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise, shall be deemed to carry the voting rights they will carry on being entered into the register of members of Regal; and

1(a)(a) Regal Shareholders holding shares carrying over 50 per cent. of the voting rights of Regal not held by Energees Management (and persons acting in concert with it) approving the making of the Increased Partial Offer;

- the consideration to be paid to Regal Shareholders pursuant to the Increased Partial Offer will be paid on the detailed terms set out in the Increased Partial Offer Document; and - the Increased Partial Offer will be open for acceptance until 20 February 2011 (or such later time(s) and/or date(s) as Energees Management may, with the consent of the Panel or in accordance with the Takeover Code and applicable US tender offer rules and securities laws, decide).

The Increased Partial Offer will be governed by English law and will be subject to the jurisdiction of the English courts. The Increased Partial Offer will be subject to the applicable requirements of the Takeover Code, the Panel, the London Stock Exchange and the Financial Services Authority.

In accordance with applicable US tender offer rules, the Increased Partial Offer will remain open for at least 10 business days from the date of the Increased Partial Offer Document.

14 General

Save as set out in this Announcement, the Increased Partial Offer Document, the Approval Form and the New Form of Acceptance, the Increased Partial Offer will be made on the same terms and subject to the same conditions as set out in the Original Offer Document. The Increased Partial Offer Document setting out the full terms of the Increased Partial Offer will be sent to Regal Shareholders (other than persons in a Restricted Jurisdiction) today together with the Approval Form and New Form of Acceptance. In deciding whether or not to accept the Increased Partial Offer, Regal Shareholders should rely solely on the information contained in, and follow the procedures set out in, the Original Offer Document, the Increased Partial Offer Document, the Approval Form, the Original Form of Acceptance and the New Form of Acceptance.

As stated above, under Rule 36.5 of the Takeover Code, approval of the Increased Partial Offer by Regal Shareholders is required and the Increased Partial Offer will be conditional upon such approval being obtained. For this condition to be satisfied, Regal Shareholders who are independent of Energees Management and persons acting in concert with Energees Management and represent more than 50 per cent. of the voting rights in Regal must give their approval to the Increased Partial Offer. If such approval is not obtained, the Increased Partial Offer will lapse.

Action to be taken by Regal Shareholders who have not accepted the Original Offer

Regal Shareholders who want to accept the Increased Partial Offer should:

- once they have received the New Form of Acceptance and if they hold their Regal Shares, or any of them, in certificated form (that is, not in CREST), complete, sign and return the New Form of Acceptance (together with their share certificate(s) and other document(s) of title) in accordance with the instructions set out in the Increased Partial Offer Document as soon as possible and, in any event, so as to be received by the Registrars not later than 1.00p.m. on 20 February 2011; or - once they have received the Increased Partial Offer Document, and if they hold their Regal Shares, or any of them, in uncertificated form (that is, in CREST), follow the procedure for electronic acceptance through CREST in accordance with the instructions set out in the Increased Partial Offer Document so that the relevant TTE Instruction settles as soon as possible and, in any event, not later than 1.00 p.m. on 20 February 2011. In this context, Regal Shareholders should note that 20 February 2011 is a Sunday, so to be effective the TTE Instruction must in fact settle in CREST not later than Friday 18 February 2011. Shareholders who hold their Regal Shares as a CREST sponsored member should refer to their CREST sponsor, as only their CREST sponsor will be able to send the necessary TTE Instruction(s) to CREST.

If Regal Shareholders approve of the Increased Partial Offer (whether or not they wish to accept the Increased Partial Offer, and whether they hold their Regal Shares in certificated form or uncertificated form) they should complete and return the Approval Form (once received by them) in accordance with the procedures set out in the Increased Partial Offer Document as soon as possible and, in any event, so as to be received by the Registrars not later than 1.00 p.m. on 20 February 2011. If approval of the Increased Partial Offer is not given by Regal Shareholders who are independent of Energees Management and persons acting in concert with Energees Management and represent more than 50 per cent. of the voting rights in Regal the Increased Partial Offer will lapse.

Action to be taken by Regal Shareholders who have accepted the Original Offer

Acceptances of the Original Offer which have not been validly withdrawn are deemed to be acceptances of the Increased Partial Offer in respect of the same number of Regal Shares (subject to scaling down on the basis set out above to the extent this exceeds the Relevant Percentage of the Shareholder's holding (or deemed holding) at the Record Date).

Regal Shareholders who have accepted the Original Offer need not complete a New Form of Acceptance (in the case of Regal Shares held in certificated form) or submit a further electronic instruction (in the case of Regal Shares held in uncertificated form) unless they wish to reduce the number of Regal Shares the subject of their acceptance, however if they approve of the Increased Partial Offer (whether they hold their Regal Shares in certificated form or uncertificated form) they should complete and return the Approval Form (once received by them) in accordance with the procedures set out in the Increased Partial Offer Document as soon as possible and, in any event, so as to be received by the Registrars not later than 1.00 p.m. on 20 February 2011. If approval of the Partial Offer is not given by Regal Shareholders as outlined above, the Increased Partial Offer will lapse.

Regal Shareholders who have accepted the Original Offer and wish to reduce the number of Regal Shares the subject of their acceptance should:

- once they have received the New Form of Acceptance, in respect of Regal Shares held in certificated form (that is, not in CREST), lodge with the Registrars, in accordance with the instructions set out in the Increased Partial Offer Document and prior to 1.00 p.m. on 20 February 2011, a validly completed New Form of Acceptance together with written confirmation that this replaces the Original Form of Acceptance previously sent to the Registrars; or - once they have received the Increased Partial Offer Document, in respect of Regal Shares held in uncertificated form (that is, in CREST) send, in accordance with the instructions set out in the Increased Partial Offer Document, an ESA Instruction to settle in CREST in relation to each electronic acceptance to be withdrawn. Shareholders should then send, in accordance with the instructions set out in the Increased Partial Offer Document, a TTE Instruction to Euroclear in respect of the reduced number of Regal Shares which such Shareholder wishes to be the subject of their acceptance. The aforementioned ESA Instruction and TTE Instruction should both be sent as soon as possible and, in any event, so as to settle not later than 1.00 p.m. on 20 February 2011. In this context, Regal Shareholders should note that 20 February 2011 is a Sunday, so to be effective the ESA Instruction and the TTE Instruction must in fact settle in CREST not later than Friday 18 February 2011. Shareholders who hold their Regal Shares as a CREST sponsored member should refer to their CREST sponsor, as only their CREST sponsor will be able to send the necessary ESA Instruction(s) to CREST; and - once they have received the Approval Form, whether they hold their Regal Shares in certificated form or uncertificated form, complete and lodge with the Registrars, in accordance with the instructions set out in the Increased Partial Offer Document and prior to 1.00 p.m. on 20 February 2011, a validly completed Approval Form.

Your attention is drawn to the further information contained in the Appendices to this Announcement which form part of, and should be read in conjunction with, this Announcement.

Appendix 1 to this Announcement contains the sources and bases of certain information contained in this Announcement.

Appendix 2 to this Announcement contains details of the irrevocable undertakings.

Appendix 3 to this Announcement contains the definitions of certain terms used in this Announcement.

Overseas Jurisdictions

Forward-Looking Statements

Disclosure requirements of the Takeover Code

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44(0)20-7638-0129.

Publication on website

Appendix 1

Sources and bases of information

In this Announcement:

1 The value of the Increased Partial Offer based on the offer price of 38 pence per Regal Share is calculated on the basis of the fully diluted number of Regal Shares in issue referred to in paragraph 2 below.

2 As at the close of business on 4 February 2011 (being the last business day prior to the date of this Announcement), Regal had in issue 318,366,876 Regal Shares. The ISIN Number for Regal Shares is GB0031775819.

3 The fully diluted share capital of Regal as at 4 February 2011 (being 320,637,836 Regal Shares) is calculated on the basis of:

- the number of Regal Shares referred to in paragraph 2 above; and - any further Regal Shares which may be issued on or after the Announcement Date on the exercise or vesting of options or awards under the Regal LTIP, amounting to 2,270,960 Regal Shares as at 4 February 2011.

Warrants to subscribe for 846,600 Regal Shares at a subscription price of GBP1.50 per share are also outstanding, but have not been taken into account in determining the fully diluted share capital as they are "out of the money".

4 Unless otherwise stated, all prices and closing prices for Regal Shares are closing middle market quotations derived from the Daily Official List.

5 The premium calculations to the price per Regal Share have been calculated by reference to:

- a price of 12.5 pence per Regal Share, being the closing price on 24 November 2010, the last business day prior to the commencement of the Offer Period; and - the average closing price per Regal Share of 15.4 pence over the one month period ended 24 November 2010 is derived from data provided by Datastream.

6 The reference to the price per Regal Share under the Increased Partial Offer being 13 pence more than the proposed purchasing commitment or proposed pre-conditional cash offer by Heamoor and Geo-Alliance (and other references to such proposals by them) are derived from the terms of such proposals as set out in the announcement released by Regal with the consent of Heamoor and Geo-Alliance on 18 January 2011.

Appendix 2

Details of irrevocable undertakings

Part A - New Irrevocable Undertakings

Energees Management has received the following irrevocable undertakings from each of Renaissance Securities (Cyprus) Limited and Hadron Capital LLP to accept and approve the Increased Partial Offer in respect of a total of 41,932,166[1] Regal Shares, representing approximately 13.17 per cent. of the existing issued ordinary share capital of Regal. These irrevocable undertakings remain binding including in the event of a competing offer being made for Regal and will only lapse if the Increased Partial Offer lapses or is withdrawn.

Name Number of Percentage of Percentage Regal the issued of the Shares share capital fully of Regal (per diluted cent.) share capital of Regal (per cent.) Hadron Capital LLP [1] 17,484,800 5.49 5.45 Renaissance Securities 24,447,366 7.68 7.62 (Cyprus) Limited

[1] Of the 17,484,800 Regal Shares the subject of the irrevocable undertaking given by Hadron Capital LLP, 15,484,800 are shares in respect of which Hadron Capital LLP holds its interest through long derivative contracts. Whilst Hadron Capital LLP has undertaken to use its reasonable endeavours to procure (so far as it is able) that the underlying Regal Shares represented by such long derivative contracts which are the subject of the irrevocable undertaking given by it will be assented to, and approve, the Increased Partial Offer, it should be noted that Hadron Capital LLP has no contractual rights to call for the delivery of any Regal Shares underlying the relevant long derivative contracts or to direct how the votes attaching to such shares are cast. There can therefore be no guarantee that all (or any) of the underlying Regal Shares represented by the long derivative contracts and the subject of the irrevocable given by Hadron Capital LLP will in fact be assented to or approve the Increased Partial Offer.

Part B - Director Irrevocable Undertakings

The Regal Directors entered into irrevocable undertakings to accept the Original Offer in respect of their own beneficial holdings (and, where applicable, those of their spouses) totalling, in aggregate, 577,245 Regal Shares, representing approximately 0.18 per cent. of Regal's existing issued share capital and have tendered acceptances in respect of such Regal Shares. These acceptances will be treated as acceptances of the Increased Partial Offer in respect of 577,245 Regal Shares. The irrevocable undertakings remain in full force and effect and binding even in the event of a higher competing offer for Regal and the Regal Directors can not withdraw such acceptances. In addition, the Regal Directors will tender Approval Forms in respect of the Regal Shares the subject of their irrevocable undertakings.

Name of Regal Number of Regal Percentage of Percentage of Director Shares the issued share the fully capital of Regal diluted share (per cent.) capital of Regal (per cent.) Keith Henry 150,000 0.05% 0.05% Adrian Coates 77,245 0.02% 0.02% Harry Verkuil 230,000 0.07% 0.07% Robert Wilde 120,000 0.04% 0.04%

Appendix 3

Definitions

The following definitions apply throughout this Announcement, unless the context requires otherwise:

AIM the AIM market of the London Stock Exchange Alternative Offer any offer, scheme of arrangement, or other similar transaction relating to the acquisition or disposal of all or substantially all of the shares or assets of Regal or which would result in a change of control (being an interest in 50 per cent. or more) of Regal Announcement means this announcement, dated 6 February 2011 Approval Form the GREEN form of approval relating to the Increased Partial Offer which will accompany the Increased Partial Offer Document Board, Board of Regal and the board of directors of Regal Regal Board BofA Merrill Lynch Merrill Lynch International, a subsidiary of Bank of America Corporation Closing Price the middle market quotation at the close of business as derived from the Daily Official List Companies Act 2006 the Companies Act 2006, as amended Conditions the conditions to the Increased Partial Offer which are set out in Appendix I to the Original Offer Document as amended by this Announcement, the Increased Partial Offer Document, the Approval Form and the New Form of Acceptance CREST the relevant system (as defined in the Regulations) in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in the Regulations) CREST Manual the manual issued by Euroclear UK & Ireland Limited from time to time CREST member a person who has been admitted by Euroclear UK & Ireland Limited as a system-member (as defined in the Regulations) CREST participant a person who is, in relation to CREST, a system-participant (as defined in the Regulations) CREST sponsor a CREST participant admitted to CREST as a CREST sponsor CREST sponsored member a CREST member admitted to CREST as a sponsored member Daily Official List the AIM Appendix of the Daily Official List of the London Stock Exchange Energees Investments Energees Investments Limited, a company incorporated in the Republic of Cyprus with registered number 172997, and the principal holding company of the Smart Holding Group Energees Management Energees Management Limited, a company incorporated in the Republic of Cyprus with registered number 252398, and a wholly-owned subsidiary of Energees Investments ESA Instruction an Escrow Account Adjustment input (AESN) transaction type "ESA" (as described in the CREST Manual) Increased Partial Offer the recommended partial cash offer to be made to acquire up to 224,446,485 Regal Shares on the terms and subject to the Conditions set out in Appendix I to the Original Offer Document as amended by this Announcement, the Increased Partial Offer Document, the Approval Form and the New Form of Acceptance including where the context so requires, any subsequent revision, variation, extension or renewal of such offer Increased Partial Offer the document to be published and Document despatched to Shareholders and others relating to the Increased Partial Offer London Stock Exchange London Stock Exchange plc New Form of Acceptance the new PINK form of acceptance and authority relating to the Increased Partial Offer which will accompany the Increased Partial Offer Document Offer Period the offer period (as defined in the Takeover Code) relating to Regal, which commenced on 25 November 2010 Original Form of Acceptance the WHITE form of acceptance and authority relating to the Original Offer which accompanied the Original Offer Document Original Offer the recommended cash offer by Energees Management to acquire the Regal Shares on the terms and conditions set out in the Original Offer Document Original Offer Document the document dated 22 December 2010 dispatched to Shareholders and others and relating to the Original Offer Panel the Panel on Takeovers and Mergers Record Date close of business on the business day immediately preceding the date on which the Increased Partial Offer becomes wholly unconditional or such earlier date as Energees Management may, with the consent of the Panel, decide Regal or the Company Regal Petroleum plc, a company incorporated in England and Wales with company number 04462555 Regal Directors the directors of Regal, and Regal Director shall mean any of them Regal Group Regal and its subsidiary undertakings from time to time Regal LTIP the Regal Long Term Incentive Plan Regal Shares ordinary shares of 5 pence each in the capital of Regal Regulations the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) (as amended) Regulatory Information any of the services set out in Service Appendix 3 to the Listing Rules published by the United Kingdom Listing Authority Relevant Percentage 70 per cent. (this has been calculated on the basis of the fully diluted share capital of the Company (being 320,637,836 Regal Shares) and it may change slightly if the number of Regal Shares in issue on the Record Date differs from this number) Restricted Jurisdiction any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure for Energees Investments, Energees Management or Regal if information or documentation concerning the Increased Partial Offer is sent or made available to Shareholders in that jurisdiction Shareholders or Regal registered holders of Regal Shares Shareholders from time to time Smart Holding Group Energees Investments and its subsidiary undertakings and parent undertakings, and any other subsidiary undertakings of its parent undertakings, in each case from time to time subsidiary and subsidiary have the meaning given to them by the undertaking Companies Act 2006 Takeover Code the City Code on Takeovers and Mergers TTE Instruction a Transfer to Escrow instruction (as described in the CREST Manual) in relation to Regal Shares in uncertificated form meeting the requirements set out in the Increased Partial Offer Document UK or United Kingdom the United Kingdom of Great Britain and Northern Ireland US or United States the United States of America, its territories and possessions, any state of the United States and the District of Columbia US Exchange Act the United States Securities Exchange Act of 1934, as amended US Holders holders of Regal Shares ordinarily resident in the US or with a registered address in the US, and any custodian, nominee or trustee holding Regal Shares for persons in the US or with a registered address in the US In this Announcement: - all references to: (a) "pounds", "GBP" "p" or "pence" are to the lawful currency of the United Kingdom; and (b) "dollars", "$", "Cent" or "cents" are to the lawful currency of the United States; - the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender; - all references to legislation are to English legislation, unless the contrary is indicated, and any reference to any provision of any legislation includes any amendment, modification, re-enactment or extension thereof; and - references to time are to London time. Enquiries: Energees Management Alexey Pertin Telephone: +380445903026 Denis Rudev UBS (financial adviser to Energees Investments and Energees Management) Allison Harding-Jones Telephone: +44-20-7567-8000 Thomas Onions Regal Petroleum plc Keith Henry, Chairman Telephone: +44-20-7408-9500 Robert Wilde, Finance Director BofA Merrill Lynch (financial adviser to Regal) Anya Weaving Telephone: +44-20-7996-1000 Paul Frankfurt Strand Hanson Limited (Nominated Adviser to Regal) Simon Raggett Telephone: +44-20-7409-3494 Rory Murphy

Related articles

Comments

Know Science And Want To Write?

Donate or Buy SWAG