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Regal Petroleum Jumps on Reports Shell to Bid $1.2 Billion




Regal Petroleum Jumps on Reports Shell to Bid $1.2 Billion 

By Stephen Cunningham

Oct. 3 (Bloomberg) — Regal Petroleum Plc, a U.K.-based explorer with assets in Ukraine, jumped the most in more than 2 1/2 years in London trading on a report that Royal Dutch Shell Plc plans a $1.2 billion takeover bid.

Regal surged as much as 31 pence, or 37.35 percent, to 114 pence as of 8:24 a.m. local time. Before today, the shares had slumped 45 percent this year. The Daily Telegraph reported today that Shell, which unsuccessfully tried to buy Regal’s Ukrainian assets last year, has written to the company with a proposal of 300 pence a share.

A Regal spokesman said today the company had seen no such letter, adding it is more than capable of delivering shareholder value independently. Regal has received an inquiry from Shell as to whether it would be prepared to share some of its new rigs in Ukraine at some time, he said. Shell spokeswoman Olga Gorodilina declined to comment on the report.

Regal Chief Executive Officer David Greer said last week the company will post a profit in the first half of 2010. The London-based company reported a narrower first-half loss last week on higher sales of gas and condensate. It has proven and probable reserves of 169 million barrels of oil equivalent.

Shell, Europe’s biggest oil company, ended an agreement to pay $410 million for Regal’s two Ukrainian gas fields last November after the appointment of Greer, a former Shell executive, as CEO.

Regal’s share price has suffered from difficulties faced by other operators in Ukraine, such as Cadogan Petroleum Plc, which is embroiled in a legal dispute over licenses. Regal has spent “a lot of time” developing relations with Ukrainian government agencies, Greer said Sept. 26.

To contact the reporter on this story: Stephen Cunningham in London at[email protected]

Last Updated: October 3, 2008 03:25 EDT

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