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Reuters: UPDATE 2-MND says no longer interested in Regal JV

Mon Nov 26, 2007 4:48 PM GMT
(Recasts with chairman’s comments, updates shares)

LONDON, Nov 26 (Reuters) – Czech-based MND Exploration and Production will not table a new offer to Regal Petroleum Plc for a Ukrainian joint venture, according to the chairman of its parent company on Monday.

“MND Exploration and Production is not considering submitting a new bid to Regal Petroleum Plc now,” said Miroslav Jestrabik, chairman of MND’s parent company KKCG Oil & Gas in a statement translated from Czech.

KKCG Oil & Gas is part of privately owned KKCG group.

“We announced our decision last week and this remains in place regardless of information that talks between Regal Petroleum and Royal Dutch Shell have been ended.”

MND said last week it had decided not to pursue an agreed joint venture with Regal. It announced this the day after Regal said it had signed a deal with Royal Dutch Shell , which trumped the MND offer, but which collapsed two days later.

Earlier on Monday, MND’s UK-based general manager told Reuters MND would consider its options in the next few days, and could go back to the negotiating table.

MND tabled an agreed proposal in September for a $330 million 50/50 joint venture with Regal for its Ukrainian gas fields.

Royal Dutch Shell cited a boardroom coup, in which Regal replaced its chief executive, as the reason they pulled out of the proposal to pay Regal $50 million in cash and the first $360 million to develop the Mekhediviska-Golotvschinska (MEX-GOL) and Svyrydivske (SV) Ukrainian gas fields.

Regal has had a rocky ride with investors since early 2005 when it announced a Greek field which it previously said contained significant resources was dry.

Shares in Regal were down 5.7 percent to 132 pence by 1600 GMT, after earlier rising 6 percent on hopes of an improved offer from MND.

“One minute something’s on, the next minute it’s not,” said one market maker, explaining why the shares had gone from positive to negative territory. The shares fell 14 percent on Friday as Shell pulled out of the deal.

Analysts have speculated Regal will need financial support although Regal’s new chief executive is reported as saying it could issue new shares.

Regal Petroleum, which on Monday confirmed its agreement with Shell had been terminated, was not immediately available for comment. (Reporting by Chris Wills; additional reporting by Jan Lopatka; editing by Mike Elliott and Sue Thomas)
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