Regal Petroleum is currently finalizing a Letter of Intent with Saipem S.p.A, the international drilling contractor, under which the parties have outlined terms for the provision of 2 land rigs and 1 workover rig for use at Regal's gas and condensate fields, Mekhediviska-Golotvschinska and Svyrydivske (MEX-GOL and SV fields) (working interest 100%), in Ukraine.
Additionally, Regal has entered into 2 Letters of Intent with Region Ltd, a Ukrainian based drilling contractor, under which the parties have outlined terms for the provision of 1 land rig and 1 workover rig respectively for use at Regal's MEX-GOL and SV fields.
The company has also entered into a Working Group Agreement with NAK Nadra Ukrayny and Chernihivnaftagasgeologia (CNGG), under which the parties have outlined terms for co-operation in connection with the development of Regal's MEX-GOL and SV fields.
Seismic acquisition over the SV field, which has been under way since early January 2008 is progressing satisfactorily, and approximately 32% of the acquisition has now been completed. The acquisition program is expected to take a further two to three months to complete.
Drilling of the MEX-103 well, which is the first new well on the MEX-GOL field since 2004, is continuing and has reached a depth of approximately 4,150 meters. The drilling is being conducted by CNGG under a contract signed in July 2007, and the well, which has a total targeted depth of 5,200 meters, is anticipated to be completed in mid-2008.
This well is the first stage in the full-field development program for the MEX-GOL and SV fields, which contain audited proven and probable reserves estimated, as at Dec. 31, 2006, at 169 million barrels of oil equivalent, based on a reserves audit conducted by Ryder Scott in 2005.
Regal is currently preparing sites and applying for permits for the drilling of additional future wells which are planned for drilling once the additional rigs are available in Ukraine.
"We are extremely pleased to have signed the above Letters of Intent in relation to our planned drilling campaign which represents further good progress in our Ukrainian asset development program," said Regal's Chairman and CEO David J. Greer. "We look forward to finalizing all contract terms in a timely manner and to the safe and efficient execution of our field development program."
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