Regal Spuds New Ukrainian Well at MEX-GOL Gas, Condensate Field

Regal has announced the spudding of the MEX-106 well in its 100% owned and operated Mekhediviska-Golotvshinska (MEX-GOL) gas and condensate field in Eastern Ukraine on January 11, 2009.

The MEX-106 well is the first well to be drilled using one of the two newly imported LEWCO 2000HP drilling rigs. These new build rigs and associated rig equipment, which were imported from the USA in autumn last year, have been designed and equipped to enable significant improvements in drilling performance to be achieved. The rigs have been contracted from Saipem Ukraine LLC, a subsidiary of Saipem S.p.A, a well recognized and established international drilling contractor.

MEX-106 is planned to be drilled to a total depth of 6200 meters and will target both Visean (B-Sands) and Tournasian (T-Sands) gas bearing sandstone reservoirs. The anticipated drilling duration for this well is approximately 6 months, which is significantly quicker than previous drilling times using Ukrainian rigs.

A second well, SV-58, is planned to be spudded in the near future in Regal's Svyrydivske (SV) gas and condensate field in Ukraine using the second LEWCO rig.

In addition the MEX-103 well, which was drilled with a Ukrainian rig last year, has been completed for production from the Visean B-Sands. Coil Tubing activities are currently being undertaken to bring the well on-line in the near future. A separate RNS will be issued regarding this well's production performance shortly.

David J Greer, CEO, commented, "We are very pleased to have begun the next phase of development drilling in Ukraine. The two recently imported new-build modern drilling rigs will accelerate our development drilling
program and significantly improve domestic rig fleet drilling capability and performance. This activity, coupled with ongoing completion and workover efforts in the field, should make a positive contribution towards both increasing Ukrainian domestic gas production and improving Regal's revenue stream."