Regal holds two licences in the north eastern part of Romania.  The Suceava and Barlad blocks are located to the east of the producing oil and gas fields and infrastructure in the Carpathian Mountains on the Moldavian Platform.  These blocks cover 4,103km² and 6,285km² respectively, with potential hydrocarbons at shallow horizons in the range of 500m to 1,500m.  Regal holds a 100% working interest and is operator of the Barlad block.  The Suceava block, adjacent and directly north of the Balard block, is managed via a 50/50 joint venture with Aurelian Oil and Gas Plc ('Aurelian') as operator.

On the Barlad licence, the evaluation of 1,000km of 2D seismic and the drilling of two wells was completed in 2007.  The first well, RBN-4, which completed on 29 October 2007, discovered gas which was tested at a maximum rate of 3.74 MMcf/d (105,900 m³/d).  The second well, RBN-3, was unsuccessful and was plugged and abandoned in December 2007.

In 2007 on the Suceava licence, 160km of 2D seismic was acquired and one well was drilled by Aurelian to fulfil its joint venture earn-in obligations.  The Dornesti Sud-1 well discovered gas and was tested at an average rate of 0.88 MMcf/d (24,840 m³/d) in December 2007.  It is intended to review options that include a possible tie in to the Bilca Gas Plant, operated by Aurelian, on its adjacent Brodina Block EIII-1.

The Company is cautiously optimistic that the Romanian assets will develop into an interesting opportunity.  As the main objectives are relatively shallow, the drilling costs are expected to be considerably lower than in Ukraine.  We are hopeful that as a result of the current discoveries, in addition to potentially three further wells and 80km of 2D infill seismic planned for 2008 on the Barlad block, there is an opportunity of early production from these assets.