Regal Denies Report That Shell May Bid; Shares Gain (Update2)
By Stephen Cunningham and Eduard Gismatullin
Oct. 3 (Bloomberg) -- Regal Petroleum Plc, a U.K.-based explorer focusing on Ukraine, denied a report it got a $1.2 billion offer from Royal Dutch Shell Plc. The company's shares jumped the most in more than four years in London trading.
Regal rose 42 pence, or 51 percent, to close at 125 pence, the most since Jan. 23, 2004, valuing the London-based company at 264.6 million pounds ($470.7 million). The gain trims the stock's decline this year to 17 percent.
``No such approach has been received,'' Regal said today in a statement. A spokesman said Shell had inquired whether the company would be prepared to share some of its new rigs in Ukraine.
Speculation over possible mergers and acquisitions in the industry has grown as oil-company stocks have retreated amid a 35 percent drop in crude prices since July's record. The Dow Jones Europe Stoxx Oil & Gas Index posted its biggest quarterly decline in more than two decades in the three months through September.
The Daily Telegraph reported today that Shell, which unsuccessfully tried to buy Regal's Ukrainian assets last year, has ``within the last few days'' written to the company with a takeover proposal of 300 pence a share. Regal Chief Executive Officer David Greer declined to comment on the report, as did Shell spokeswoman Olga Gorodilina.
Urals, Sibir
Shell, Europe's largest oil producer, has also been reported to be interested in assets held by Urals Energy Plc and Sibir Energy Plc, which explore for oil and gas in Russia. The companies haven't confirmed the reports. Shell ended an agreement to pay $410 million for Regal's two Ukrainian gas fields last November.
Greer was project director of Shell's Sakhalin-2 oil and gas exploration project in Russia's Far East before quitting in June last year.
Regal will become profitable in the first half of 2010, Greer said Sept. 26, when the company reported a first-half loss of $3.3 million. It has proven and probable reserves of 169 million barrels of oil equivalent.
Regal's share price has also 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 last week.