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The Guardian: Shell to buy 51 pct stake in Regal subsidiary

Reuters Wednesday November 21 2007
(Adds detail, Shell quote, background)

LONDON, Nov 21 (Reuters) – Royal Dutch Shell said on Wednesday it had signed a memorandum of understanding with oil and gas explorer Regal Petroleum Plc to jointly develop and operate Regal’s MEX-GOL and SV gas fields in Ukraine.

Regal said Shell’s Ukrainian subsidiary would buy, subject to due diligence, a 51 percent stake in Regal subsidiary, Regal Petroleum (Jersey) Ltd, for $50 million in cash and pay the first $360 million to develop the fields.

The exclusive agreement, which will last for eight weeks, came as Regal announced its MOU with Czech-based MND Exploration and Production signed in September had lapsed.
MND had previously agreed to pay Regal $330 million for a 50/50 stake in a joint venture specifically to develop the Mekhediviska-Golotvschinska and Svyrydivske fields.

“The MOU is another important step in Shell’s development in Ukraine,” said Patrick van Daele, general manager, Shell Ukraine Exploration & Production.

“The growth potential from the Mekhediviska-Golotvschinska and Svyrydivske fields is a clear fit with Shell’s strategy.”

Reserves at the gas fields are estimated at 169 million barrels of oil equivalent.
(Reporting by Chris Wills and Tom Bergin, editing by Elizabeth Fullerton)
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