The Directors are pleased to announce that Kavala Oil S.A. (“Kavala”) has commenced drilling of an additional well in the Greater Kallirachi Area.

Following the completion of the independent Greater Kallirachi Area Study in September 2004, which confirmed the volumetric estimate of up to 1 billion barrels in place, Regal has confirmed two well locations for appraisal/development drilling.  The first of these wells has commenced drilling and the drilling of the second well is scheduled for Q1 2005.

The first appraisal/development well is scheduled to be drilled to its target depth of 3,200 metres by 31 December 2004 and is budgeted to cost US$10.5 million.  The well will be evaluated in three different horizons with complete logging suites including sidewall coring, VSP checkshots and fluid samples in each interval.  Following flow and pressure testing a hydraulic frac treatment of the most prolific horizon will be carried out.

Kavala is a private company incorporated in Greece in which Regal has an indirect 81.66 per cent. interest.

Commenting on the commencement of the appraisal/development drilling programme in Kallirachi, Frank Timis, Executive Chairman, said:

“Having completed the independent study on the Greater Kallirachi Area, which included work on volumetrics, 3D seismic inversion and interpretation, geological modelling and structural mapping, we have identified two appropriate appraisal/development well locations, the first of which we have now started to drill. We look forward to announcing the results of this drilling programme in Q1 2005.”

For further information, please contact:

Regal Tel: 020 7408 9500
Frank Timis, Executive Chairman 
Roger Phillips, Finance Director 

 
Buchanan Communications Tel: 020 7466 5000
Bobby Morse / Ben Willey