Friday January 25 2008
Regal Petroleum has been referred to a London Stock Exchange disciplinary committee after allegedly breaking the rules over the disclosure of price sensitive information regarding wells drilled in the Aegean sea. The small exploration and production company, which has been dogged by controversy over the last eight years, said it “understood” that the case against it related to rules 10 and 11 of the code covering the Alternative Investment Market.
“Regal has been notified by the London Stock Exchange that following an investigation it intends to refer a case regarding alleged breaches by Regal of the Aim rules to the Aim disciplinary committee,” it said in a statement. A spokesman for the firm declined to give any other details saying “we are not allowed to comment further”.
Regal caused concern five years ago when two much hyped exploration wells, Kallirachi 1 and 2, were found to contain mainly water rather than oil or gas. The share price collapsed overnight and fed into wider investor worries about a host of small speculative stocks on the junior stock market whose values were inflated by unreal expectations.
Regal, then led by founder Frank Timis, desperately tried to put in place a range of management changes but these too were dogged with trouble as various directors came and went, with at least one resigning days after being appointed.
The company’s capacity to walk into trouble continued as recently as November when it announced that Shell was going to buy a 51% stake in its Ukrainian assets only for the deal to collapse 48 hours later. The money was going to be used to develop the Svyrydivske and Mekhediviska-Golotvschinska fields in Ukraine and yesterday Regal announced a successful £84m share placing as replacement funding. Timis did not take part in the cash-raising and his stake in the company has been reduced from 20% to around 15%.