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         Annual Report and Accounts 2009 Lansdowne House
57 Berkeley Square
London  W1J 6ER
United Kingdom
T: +44 (0)20 7408 9500
F: +44 (0)20 7408 9501
www.regalpetroleum.co.uk
Regal Petroleum plc Annual Report and Accounts 2009 17759	 07/05/10	 Proof	5 17759	 07/05/10	 Proof	5
 
Regal Petroleum plc
Glossary
 Company Secretary and Registered Office
	C 	 Phillips
Lansdowne House
57 Berkeley Square
London W1J 6ER
United Kingdom
 Auditors
	Deloitte 	 LLP
2 New Street Square
London EC4A 3BZ
United Kingdom
 Bankers
	Bank 	 of	 Scotland	 Corporate
London Chief Office
155 Bishopsgate
London EC2M 3YB
United Kingdom
 Solicitors
	Pinsent 	 Masons	 LLP
City Point
1 Ropemaker Street
London EC2Y 9AH
United Kingdom
 Nominated Advisor
	Strand 	 Hanson	 Limited
26 Mount Row
London W1K 3SQ
United Kingdom
 
 Joint Broker
	Merrill 	 Lynch	 International
Merrill Lynch Financial Centre
2 King Edward Street
London EC1A 1HQ
United Kingdom
 Joint Broker
	RBS 	 Hoare	 Govett
250 Bishopsgate
London EC2M 4AA
United Kingdom
 Joint Broker
	Mirabaud 	 Securities	 LLP
21 St James’s Square
London SW1Y 4JP
United Kingdom
 Share Registry
	Computershare 	 Investors	 Services	 PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZY
United Kingdom
 PR Advisors
	Citigate 	 Dewe	 Rogerson
3 London Wall Buildings
London EC2M 5SY
United Kingdom
 km
kilometres
 km
2
square kilometres
 m
3
/d
cubic metres per day
 Mm
3
thousand cubic metres
 Mm
3
/d
thousand cubic metres per day
 MMcf/d
million cubic feet per day
 bbl
barrel
 boepd
barrels of oil equivalent per day
 MMboe
million barrels of oil equivalent
 $
United States Dollar
 hp
horsepower
Advisors 01
Our Performance 
Chairman’s Statement 
Chief Executives Review
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Our Business 
Highlights
Realising
Potential
Regal Petroleum plc is an independent
United Kingdom based Group, focused on gas field 
development in Ukraine. In addition, the Group has 
oil and gas exploration assets under appraisal in 
Romania and Egypt.
Highlights
Financial
■ 	 Revenues, at $19.9 million, are up 74% on the prior year
and gross profit has increased 136%;
■ 	 Gas sales volumes are up 64% on 2008, contributing to
a 120% rise in gas revenue over the previous year;
■ 	 $118.6 million in cash and no debt.
Operational
■ 	 Drilling performance improvement from previous drilling on
the licences;
■ 	 Production has risen from below 500 boepd in the fourth 
quarter of 2008 to over 2,000 boepd by January 2010;
■ 	 Four new production wells were spud in Ukraine
during 2009;
■ 	 Two million man-hours of staff and contractor time
recorded without any Lost Time Incidents to date.
ContEntS
Our Business
02 Group at a Glance
05 Chairman’s Statement
06 Chief Executive Officer’s Statement
15  Chief Operating Officer’s Review
23  Finance Review
26  Operating Environment, Principal 
Risks and Uncertainties
Our Governance
30  Board of Directors
32  Corporate Governance Statement
33  Directors’ Report
Our Financials
37  Independent Auditors’ Report
38  Consolidated Income Statement
38  Consolidated Statement of 
Comprehensive Income
38  Company Statement of 
Comprehensive Income
39  Consolidated Balance Sheet
40  Consolidated Statement of
Changes in Equity
41  Consolidated Cash Flow Statement
42  Company Balance Sheet
43  Company Statement of Changes
in Equity
44  Company Cash Flow Statement
45  Notes
IBC  Advisors/Glossary 02
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Our Business
Group at a Glance
Our
Operations
UkRainE
■ 5 new generation wells spud to date
■ Up to four times faster drilling to equivalent depth
with new rigs
■ More than two years and 2 million man-hours without a 
Lost Time Incident
■ Gas production: 163,983 m
3
/d 
■ Condensate production: 42.5 m
3
/d
■ 169 MMboe reserves
■ Reserves review in progress
■ Positive earnings outlook
Romania
■ 104.7 km of 2D seismic acquired
■ Shallow gas exploration well planned for 2010
EgyPt
■ Further technical evaluation of licence area
■ Drilling of an additional well planned for 2010 03
Our Performance 
Chairman’s Statement 
Chief Executives Review
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Our Business 
Group at a Glance
uK Head O FFICe
Find oUt moRE at
www.regalpetroleum.co.uk
uKRaIne
Production and 
appraisal
■ 	 MEX-GOL and
SV fields 
— 100% Regal  
owned and  
operated
ROman Ia
exploration and 
appraisal
■ 	 Barlad Block 
— 100% Regal 
owned and 
operated
■ 	 Suceava Block 
— 50% non-
operated interest
eGy PT
exploration and 
appraisal
■ 	 East Ras Budran 
concession 
— 25% non-
operated interest 04
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Our Performance 
Chairman’s Statement 
Chief Executives Review
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Our Business 
Chairman’s Statement
January 2010. Alastair brings a wealth of oil and gas 
experience, predominantly from his time with BP where, prior to 
his retirement in 2009, he was leader of BP’s Russia business 
unit and was BP’s shareholder representative for the TNK-BP 
joint venture. He holds a PhD in Geology from the University of 
Edinburgh, an MBA from the University of Strathclyde and an 
MA in Natural Sciences from the University of Cambridge. 
Consequently, Alastair adds real depth of technical and regional 
knowledge to the Non-Executive team.
Also in January 2010, Lord Anthony St John of Bletso and  
Mr Antonio Mozetic stepped down as Non-Executive Directors 
of the Company due to other business and personal 
commitments. On behalf of the Board, I would like to sincerely 
thank both Anthony and Tony for their valued contributions and 
advice during their tenure and we wish them well in the future.
The Board now comprises three Executive and three Non-
Executive Directors, whose details and experience are set out 
on pages 30 and 31.
Outlook
As detailed later in this Report, the considerable experience gained 
whilst drilling the new generation wells in Ukraine and developing 
the novel techniques to improve their perforation, has enabled us 
to re-evaluate our immediate strategy whereby the majority of our 
resources will be concentrated on developing the B-Sands. Two of 
the initial four wells have recently been brought into production 
and the two remaining wells are expected to be completed shortly. 
During 2010 we plan to drill two additional wells in Ukraine, two 
in Romania and one in Egypt. 
Although global financial markets are expected to remain 
challenging, the team at Regal have the skills and experience 
necessary to build on the operational progress recently 
achieved, and to continue to grow the Company in future years. 
The results achieved to date are thanks to the dedication, 
professionalism and commitment of our staff and contractors 
and also with the support of our shareholders. On behalf of the 
Board, I would like to offer my sincere appreciation to them all.
I am pleased to introduce the 2009 Annual Report and Accounts. 
Despite a very difficult worldwide financial environment, the 
Company has continued to pursue its strategy of investment and 
growth through the application of modern technology, supported 
by its team of highly experienced industry professionals. Revenues, 
at $19.9 million are up 74% on the prior year, despite a lower 
average condensate price. Gross profit has increased 136% and 
the net loss after tax has been cut from $50.8 million in 2008 to 
$9.8 million in 2009. Although the quantum of this improvement in 
the Company’s financial performance is relatively modest for now, 
it is clear that a number of major milestones were successfully 
achieved during 2009. Since the year end we have seen 
significant success with the testing of the SV-58 well which, if 
replicated through the planned 2010 programme, offers a positive 
earnings outlook. Technical challenges remain in accessing the 
deeper reservoirs and we intend to focus our investment 
programme on building production whilst evaluating the 
considerable resource upside in a cost effective manner. The first 
four of a series of new generation wells were spud on Regal’s 
Ukrainian licences during the year, using two, modern, 2,000 hp 
top-drive rigs contracted from Saipem S.p.A.. The introduction of 
these new rigs has not only enabled us to substantially reduce the 
time historically taken to drill these wells in Ukraine, but also 
affords us the opportunity to appraise the deeper, potential 
resources. Our current strategy of focussing in the near term on 
developing the shallower B-Sands to increase our gas production 
bodes well in a market that is heavily dependent on imported gas 
and where the Ukrainian Government is keen to encourage the 
growth of domestic production.
Board Changes
I have pleasure in welcoming Dr Alastair Graham to the Board 
as a Non-Executive Director, following his appointment in 
a number of 
milestones 
achieved
Our Business
Chairman’s Statement
Keith Henry 06
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Our Business
Chief executive Officer’s Statement
David Greer OBE
continue to drive the Company forward. During 2009, four new 
generation wells were spud in Ukraine and by January 2010 
production had risen to 2,072 boepd following the hook-up  
of SV-58.
Health, Safety, environment and Security
Regal is committed to maintaining the highest standards of 
Health, Safety, Environment and Security (HSES) and the 
effective management of these areas is an intrinsic element of the 
overall business ethos. Through strict enforcement of the 
Company’s HSES Management System, together with regular 
management meetings, training and the appointment of dedicated 
safety professionals, the Company strives to ensure that the 
impact of its business activities on its staff, contractors and the 
environment is as low as is reasonably practicable. Regal reports 
safety and environmental performance in accordance with the 
Association of Oil and Gas Producers (OGP) guidelines.
The number of safe man-hours worked by staff and contractors 
in 2009 totalled 900,549 man-hours with no Lost Time 
Incidents reported during the year. This brought the cumulative 
total without a Lost Time Incident to over 1.6 million hours by  
31 December 2009 and since this date, the total has exceeded 
2.0 million hours over two years without a Lost Time Incident.  
No environmental incidents were recorded during the year.
Introduction
2009 was a year of sustained progress in Ukraine, most notably 
with the spudding of the first wells with the new top-drive drilling 
rigs. Work on the 3D sub-surface model was further refined 
following the completion of seismic acquisition in 2008 and  
with data from the new wells; governance procedures were 
strengthened further; and historic regulatory matters were finally 
brought to a close. The worldwide financial crisis and the resultant 
contraction in availability of investment capital threatened to derail 
Regal’s development programme, but the support shown by 
shareholders in the $105 million (gross) capital raising through a 
secondary placing on 1 July 2009, coupled with the funds raised 
in the preceding year, has enabled the Company to maintain 
momentum and to continue to build upon the achievements of  
last year. 
The application of new technology and the appointment of 
experienced professionals with a wealth of industry experience 
driving the 
Company  
Forward 07
Our Performance 
Chairman’s Statement 
Chief Executives Review
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Chief Executive Officer’s Statement 08
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Our Business
Chief executive Officer’s Statement continued
Technological
achievements
RESERvoiR tECHnoL ogy
■ Acquired, processed and interpreted 3D seismic
imagery over entire licensed area
■ Acquired advanced petrophysical analysis and
geological modelling software for detailed reservoir 
characterisation  
■ Constructed static reservoir model based on 24 wellbores 
integrated with the seismic imagery as a basis for 
volumetric estimation 
■ Consequent increase in internal view of initial hydrocarbons 
in place 
■ Identified previously undeveloped limestone
reservoir (B24)
ComPLEtion tECHnoL ogy
■ Custom designed and built equipment for rig and coiled 
tubing to enable deployment of high pressure hydraulic 
abrasive jet perforation to ensure reservoir access 
■ Wellbore inflow performance enhancement through 
deployment of “minifrac” stimulation of the rock face
■ Completion designs allowing for zonal isolation and 
selective production
■ Broadened completion strategy to include slotted liners set 
below 5,400 metres depth
PRodUCtion tECHnoL ogy
■ Launched wellhead compression project to increase 
ultimate recovery
■ Launched liquid vapour recovery project to monetise
waste gas
■ Identified and implemented production enhancement 
project portfolio on existing wells 09
Our Performance 
Chairman’s Statement 
Chief Executives Review
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Our Business 
Chief Executive Officer’s Statement
kE y 
FaCt S and Fig URES
$105m of new capital raised
year end cash balance $118.6m
Revenues up 74% on prior year
Capital expenditure of $94.9m
gas: realised price $244 per mm
3 10
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Our Business
Chief executive Officer’s Statement continued
uKRaInIan
markets
UkRainE ovERviEw
■ 	 Long-term production licence
■ 	 Significant existing reserves with clear, sizeable
upside potential
■ 	 Experience & technology to deliver; seasoned industry 
professionals, quality Ukrainian team
■ 	 Strategic location — approximately 80% of Russian gas 
exported to the European Union crosses Ukraine
■ 	 Encouraging business environment:
■ 	 Good fiscal environment encouraging deep
gas exploitation
■ 	 Revenues indirectly linked to $
■ 	 Structured to repatriate profits
attRaCtivE gaS PRiCing 
European market very different to North America:
■ 	 Higher prices — oil price linked
■ 	 Demand rising
■ 	 Eastern Europe joined EU
■ 	 North Sea production decline
■ 	 Nearly 80% of Ukrainian demand satisfied by imported gas 
from Russia; domestic production encouraged 11
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Our Business 
Chief Executive Officer’s Statement
However, the plan is to modify our forward programme in the 
short term to optimise production. 
In Romania, work continues on both of Regal’s licence interests. 
On Barlad, which is 100% Regal owned and operated, a further 
104.7 km of 2D seismic was acquired and is being interpreted 
in advance of a further shallow gas exploration well planned  
for later in 2010. This will discharge the remaining work 
commitment for the licence. However, additional studies and 
field work are being undertaken to determine whether deeper 
prospects may reside within possible shale deposits of the 
Silurian Period. In the Suceava concession, which is 50% owned 
by Regal and operated by Aurelian Oil & Gas plc, 2D seismic 
data acquired during the year has resulted in the identification  
of a gas prospect located 2.5 km to the east of the Vicsani 
discovery in the neighbouring Brodina concession, which is also 
operated by Aurelian Oil & Gas plc. It is intended to drill a well to 
evaluate this gas prospect later in 2010.
In the East Ras Budran licence in Egypt, in which Regal holds a 
25% interest and is operated by Apache, a work-over on well 
ERB-A-1X to replace an electrical submersible pump was 
undertaken. However, technical challenges encountered by 
Apache resulted in operations being suspended. The 2010 plan 
for Egypt includes further technical evaluation of the licence and 
the drilling of an additional well. 
ukraine market and Regal’s approach to 
unlocking Value
Ukraine is very well positioned geographically, bridging the gas 
supplies of Russia and the markets of Europe. With the 
European Union (“EU”) on Ukraine’s western border and Russia 
on the east, approximately 80% of Russian gas exports to the 
EU travel via pipeline across the country, and gas infrastructure 
is extensive. Regal is confident about the domestic demand for 
its gas as the expected production from the MEX-GOL and SV 
licences rises. Consumption in Ukraine over the last 15 years or 
so has been reasonably static with nearly 80% of demand being 
satisfied by imported gas. Regal’s predicted increase in 
2009 — a year in Review
Ukraine continues to be, by far, the main focus of operational 
activity and investment. The thrust of Regal’s strategy is to apply 
modern technology, supported by highly experienced industry 
professionals, in a region that has not, hitherto, seen such 
widespread application. The first of a planned series of new-
generation wells, was spud in the first quarter of 2009. Two new, 
top-drive, 2,000 hp drilling rigs were contracted from Saipem 
S.p.A. (ENI Group) and four wells were spud during the year — 
MEX-106, SV-58, SV-61 and SV-66. Drilling performance has 
out-stripped all previous drilling activity on the licences (up to four 
times faster for equivalent depth) and it is expected that as a 
result of the learning acquired, new wells should be drilled faster 
resulting in future cost reductions. Furthermore, the new wells 
have been able to penetrate deeper owing to the capacity of the 
new rigs and the Company has started to gain data on possible 
upside from the Tournasian and Devonian age potential reservoirs. 
There has inevitably been some degree of initial teething 
problems and challenges, but these are considered to be  
learning curve frustrations rather than fundamental problems,  
and are to be expected in the first few wells drilled with such  
new technology. These are the initial wells in a planned long term 
programme that is expected to continue into and beyond the  
next decade. However, given the quality and experience of the 
operations team on the ground, supported by senior professionals 
in London, solutions have been found, most notably in the jet 
perforating technique which was first applied to SV-58. Following 
an intermittent and poor flow from this well when first perforated 
using local, conventional guns, a liquidised, sand-based, jet-
perforating process successfully trialled on two thin B-Sands, was 
subsequently rolled out over the remaining target reservoirs. This 
was further enhanced with Stimtube fracturing (again, a first in the 
Ukraine) resulting in significant improvements in production rates. 
The field is relatively deep and the stratigraphic nature of the 
reservoirs complex, but the structure is large and geographically 
extensive. The challenge now is to unlock the upside potential 
that is believed to exist in both the B and T-Sands, with each new 
well providing further refinement of our geological understanding.  12
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Our Business
Chief executive Officer’s Statement continued
amendments to the price cap and correspondingly Regal’s 
realised price had been made. The realised gas price for Regal 
in 2009 was higher than the imported price.
Future Strategy
During 2009, Regal continued to pursue the strategy that was 
established during the previous year in the development of its 
Ukrainian assets. Despite the worldwide recession and resultant 
stemming of liquidity in global financial markets that has tested 
many companies, Regal has continued to follow its initial 
objectives to try to unlock the true value of its Ukrainian assets. 
This foundation should provide a stable platform for significant 
future growth in production and increased revenues, with such 
increasing production giving a positive earnings outlook. The 
Company continues to have no debt and sufficient cash and 
materials to maintain operating activity into the foreseeable future.
However, the experience gained in the drilling of the first four new 
generation wells, and particularly in drilling to the deeper sections 
in the wells on the SV field where drilling conditions have proven 
to be challenging at depth, has caused the Company to re-
evaluate and refine its objectives for the development of the 
Ukrainian field. In this regard, the Company has determined that 
its immediate primary focus should be on securing production 
from the B-Sands reservoirs in both the MEX-GOL and SV fields. 
Appraisal of the T and D-Sands in the MEX-GOL field will be 
carried out on the MEX-106 well, where work-over operations are 
planned to complete the perforation of the B, T and D-Sands 
using advanced perforation techniques and to replace the well 
completion. It is considered that by focussing on increasing 
production from the B-Sands and the resultant operational 
revenue in the near term, the Company will be able to establish 
sustainable business growth by conserving and ultimately building 
its cash position and retaining maximum optionality, whilst 
continuing to evaluate the most effective method of appraising 
the potential upside of the deeper T and D-Sands in the future.
Accordingly, the Company has determined to complete the SV-66 
well as a B-Sands production well, whilst deferring the appraisal 
of the T and D-Sands in this and subsequent new wells to allow 
further work to be undertaken in the assessment of the most 
effective method of appraising the deeper T and D-Sands.  
I would like to thank our shareholders for their continued 
support, particularly during such a turbulent period. Regal is also 
indebted to the commitment and hard work of all of its staff and 
contractors who have worked tirelessly and professionally to 
understand the sub-surface and thereby begin to realise the true 
potential of our operated assets in Ukraine and Romania.
production as each successful well is brought into production 
could, in due course, be material in terms of domestic supply, but 
will still be small in comparison with imported volumes, which 
heavily influence domestic prices. Importantly, Ukrainian fiscal 
terms actively encourage exploitation of domestic reserves and, 
particularly, through the royalty regime, the recovery of deep gas 
and condensate.
Production has risen from below 500 boepd in the fourth 
quarter of 2008 to over 2,000 boepd by January 2010. This 
represents the first contributions from the significant drilling 
investment which began in earnest in 2009. The overall 
philosophy of the Company is to use modern technology, much 
of which has not been applied in Ukraine previously, to drill wells 
both faster and deeper, thereby increasing and accelerating 
production and, consequently, revenues. This approach, if 
successful, should enhance the economic value of anticipated 
future cash flows and is expected to result in earlier enhanced 
revenues than from conventional, local drilling practice. In terms 
of investment, the bulk of the cost lies in the capital expenditure 
for the drilling and completion of these new wells. Conversely, 
the surface infrastructure and variable operating costs are 
relatively low, since the gas and condensate require little surface 
treatment and the sales of gas are made from the licence 
boundary, free of additional transportation tariffs or costs.
The political situation in Ukraine has continued to attract market 
attention in the run-up to the Presidential elections which 
concluded with the former Prime Minister, Mr Viktor Yanukovych, 
taking office as President in February 2010 and a new governing 
coalition being formed. Regal has operated with the support of 
both Regional and National Government for a number of years, 
including the period when Mr Yanukovych held the position of 
Prime Minister prior to the “Orange Revolution”, and accordingly 
the Company remains confident in the business environment and 
is committed to supporting the development of Ukraine and to 
maintaining a strong relationship with the Government at all levels.
Following the formation of the new Government, there are 
already indications of an improvement in relations between 
Ukraine and Russia. This is reflected in the recent dialogue 
between their respective Governments which has resulted in a 
review of the current imported gas price from Russia and a fall in 
the imported gas price from Russia to Ukraine for the remainder 
of 2010. As a consequence, the weighted average anticipated 
price for 2010 is likely to be similar or slightly higher than the 
average price for 2009 because the year to date price for 2010 
has been considerably higher than the 2009 average price. It 
should be noted that the imported price is distinct from the 
domestic internal prices that are capped by the Ukrainian 
authorities. As at the time of preparing this report, no  13
Our Performance 
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Chief Executives Review
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Our Business 
Chief Executive Officer’s Statement
“The application of new technology and the appointment 
of experienced professionals with a wealth of industry 
experience continue to drive the Company forward. during 
2009, four new generation wells were spud in ukraine 
and by January 2010 production had risen to 2,072 boepd 
following the hook-up of SV-58.”  14
ReGal PeTROleum PlC Annual Report and Accounts 2009
17759	 07/05/10	 Proof	5 “The first contribution from the new generation wells 
commenced in October 2009 from meX-106, followed by 
SV-58 with initial production from this well commencing in 
January 2010. The combination of a rig equipped with high 
performance equipment and specifically designed bits has 
increased the rate of penetration.” 
15
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Our Business 
Chief Operating Officer’s Review
Our Business
Chief Operating Officer’s Review
Harry Verkuil
Regal’s assets
Regal’s assets are located in three countries: Ukraine, Romania 
and Egypt. 
The primary asset is a large gas and condensate field extending 
over two production licences (100% Regal owned and operated) 
in north eastern Ukraine. The reserves were independently 
audited by Ryder Scott in 2005 who provided an estimate for 
proven and probable (“2P”) reserves of 169 MMboe. 
Regal also owns two large exploration licences in Romania — 
the Barlad and Suceava Blocks. These are held 100% and 
50%, respectively, by Regal. Gas has been discovered on both 
blocks following exploration drilling.
In addition, the Company owns a 25% non-operated interest in 
the East Ras Budran concession in Egypt which is an onshore 
block operated by Apache.
Operationally, 2009 has been a year of high activity. In total, four 
wells were spud, two of which are now on production. Despite 
the challenges encountered in drilling these first wells, we have 
achieved very considerable speed and efficiency improvements. 
We can now also say with some confidence that we have a 
better understanding of the reservoirs and their behaviour. Key 
contributors to this have been the application of different 
techniques and the use of modern materials and equipment 
specifically imported into the country. Uppermost is the 
operational team on the ground, with their experience and 
resourcefulness. Production started to rise in autumn 2009 and 
continued through into the first quarter of 2010, with average 
production in 2009 showing a 64% rise on that of 2008. No 
Lost Time Incidents were incurred and a total of 900,549 
man-hours were recorded for the year. Over two million 
man-hours of staff and contractor time without a Lost Time 
Incident have now been recorded to date.
 
Speed and 
efficiency 
improvements 16
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Our Business
Chief Operating Officer’s Review continued
Project Areas
Uk Rainian 
PRog Ramm E
■ Contracted two new top-drive 2,000 hp Lewco rigs
■ Four wells spud during 2009; MEX-106, SV-58, SV-61 
and SV-66
■ Over two million man-hours of staff and contractors time 
without a Lost Time Incident have now been recorded 
to date
■ Drilling performance has out-stripped all previous drilling 
activity on the licences
■ Subsurface model of the field completed by the end
of 2009 17
Our Performance 
Chairman’s Statement 
Chief Executives Review
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Our Business 
Chief Operating Officer’s Review
Project area:
ukraine
Asset Overview
Regal Petroleum Corporation Limited (a wholly 
owned subsidiary in the Regal Group) holds a 
100% working interest and is the operator of 
the Mekhediviska-Golotvshinska (“MEX-GOL ”) 
and Svyrydivske (“SV”) fields that extend over a 
combined area of 269 km², approximately 200 
km east of Kiev. The two licences are adjacent 
and the interests are operated and managed as 
one field.
The field is located, geologically, towards the 
middle of the Dnieper-Donets sedimentary 
basin which extends across most of north-east 
Ukraine. The vast majority of Ukrainian gas and 
condensate production lies within this basin. 
The reservoir comprises a series of gently 
dipping Carboniferous sandstones of Visean 
Age (“B-Sands”) interbedded with shales that 
form stratigraphic traps at around 4,700 metres 
below the surface, with a gross thickness 
between 800 metres and 1,000 metres. 
Analysis suggests that these deposits range 
from fluvial to deltaic in origin. Below these 
reservoirs is a thick sequence of shale above 
deeper, similar, sandstones which are 
encountered at a depth of around 5,800 
metres. These are of Tournasian Age 
(“T-Sands”) and also sandstones from the older 
Devonian Period (“D-Sands”). 
The field was originally discovered in the 1960s 
during the Soviet era, with wells being drilled 
sporadically over the years since then by State 
companies. Only limited investment had been 
made in developing the asset further with 
equally limited, consequential, production. 
Between 2000 and 2004, the former Regal/
Chernihivnaftagasgeologia (CNGG) joint 
venture drilled two development/appraisal 
wells, MEX-102 and SV-52, and successfully 
completed three work-overs on Soviet era wells. 
The Ukrainian Government declared the fields 
commercial in December 2003 and 20 year 
production licences (MEX-GOL and SV) were 
awarded to Regal in July 2004. 
Over 20 wells had been drilled into the 
B-Sands prior to 2004, resulting in the Ryder 
Scott 2P reserves estimate in 2005 of 169 
MMboe. However, only five wells had managed 
to penetrate the deeper T-Sands sequence, and 
none of the rigs used at the time had the 
capacity to drill all the way through this T-Sands 
sequence and into the deeper D-Sands. The 
five wells provided, at the time, a tantalising 
glimpse of potential upside by the discovery of 
gas where, in some wells, individual T-Sands 
were tested and flowed at between 20 and 80 
Mm³/d. It was not until the acquisition of 3D 
seismic data and its interpretation in 2008 that 
the huge, lateral extent of the T-Sands and 
underlying D-Sands became apparent. The new 
generation wells in 2009 have targeted 
production from the B-Sands reservoirs, but 
have also been drilled with the intention of 
properly appraising these deeper T and 
D-Sands deposits for the first time. Regal 
believes that there is significant upside 
potential from these deeper sands and the  18
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2009 and, after reaching TD at 6,309 metres in September 
2009, was moved to the SV-66 location nearby, which was 
spud in November 2009. Consequently, four new production 
wells were spud on the Company’s Ukrainian licences 
during 2009.
Drilling performance has been striking. Previous local rigs had 
typically taken between a year and two years to reach depths 
of 5,000 to 5,500 metres on Regal’s MEX-GOL and SV 
licences. MEX-106 took little more than 120 days to reach 
comparable depth and there has been an improvement in 
drilling performance with each successive well. The 
combination of a rig equipped with high performance 
equipment including drilling motors, turbines and purposely 
selected and specifically designed bits, such as diamond 
impregnated and polycrystalline diamond compact (PDC) bits, 
has increased the rate of penetration, dramatically reduced 
the number of bits required and increased the bit on bottom 
time and bit life. The new rigs also have the capacity to drill 
deeper, with MEX-106 drilled to 6,020 metres, inside seven 
months and the successive wells even faster. SV-58 reached 
6,309 metres and the fourth well, SV-66, reached 5,000 
metres in less than 90 days (before drilling deeper), which is 
more than four times faster than with the previous local rigs. 
Lessons learned from each successive well should enable 
future wells to be drilled faster resulting in lower drilling time 
and consequent cost reduction. The main objective of 
MEX-106 was to determine the productivity of the B-Sands 
target and to bring this into production. Wireline logs identified 
33 metres of net reservoir in the B-Sands sequence between 
4,800 and 5,250 metres depth. In addition to this, a further 11 
metres of net reservoir was identified in the secondary, 
T-Sand objective. At 5,830 metres the well encountered, for 
the first time on this field, potential Devonian reservoirs and 
27 metres of net reservoir was logged between this depth 
and the bottom of the well. However, whilst perforating to flow 
the well in the deeper section one of the perforation guns 
became lodged in the production tubing, thereby restricting 
Company aims to continue to appraise and, hopefully, produce 
from such deeper sands in the future.
Production
2009 commenced with a significant production increase from 
MEX-102, which had been recently worked over and brought 
back on line in late 2008. The first contribution from the 
new-generation wells commenced in October 2009 from 
MEX-106, followed by SV-58 with initial production from this  
well commencing in January 2010. At present, the main 
contribution from both wells is from the B-Sands sequence. In 
MEX-106, an intervention is required to remove an obstruction 
from the production tubing that is preventing access to the 
lower T and D-Sand sections of the well and in SV-58 high 
pressures in the deeper sections of the well have restricted 
access to those sections. 
The Company’s average production over the 12 month period 
to 31 December 2009 was 163,982 m³/d (5.79 MMcf/d) of 
gas and 42.5 m³/d of condensate, which equates to a 
combined total oil equivalent of 1,232 boepd, which is a 64% 
increase on the previous year. The monthly average production 
with both MEX-106 and SV-58 on line increased to 1,927 
boepd in January 2010. This growth is significant as it 
represents a real turning point from below 500 boepd in late 
2008, reflecting the tangible effect of investment starting to 
produce results.
Field Development
Regal contracted two new top-drive 2,000 hp Lewco rigs 
from Saipem S.p.A. in 2008 on a long term basis. These rigs 
arrived in the Ukraine, on schedule, to spud the first of the 
new-generation deep gas and condensate production wells in 
early 2009. The first rig spudded MEX-106 in the western 
side of the field in January 2009 and after reaching target 
depth (TD) of 6,020 metres in July 2009, the rig was 
relocated to the eastern side of the field to spud SV-61 in 
September 2009. The second rig spudded SV-58 in February 
ukraine continued 19
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Chief Operating Officer’s Review
access to the lower part of the well. Only the upper reservoirs 
in MEX-106, therefore, were initially brought on stream. Flow 
from these reservoirs had built up to approximately 75,000 
m³/day (2.6 MMcf/d) of gas and to 75 boepd of condensate 
towards the end of the year. It is the intention to remove the 
obstruction through work-over activities in Q2 2010.
The second well, SV-58, also encountered potential reservoirs 
in the B, T and D-Sands, with estimated net pay of 60 metres 
from the B-Sands to the T-3 Sands. The available logs from 
the T-4 Sands to the D-Sands show an estimated pay 
thickness of 65 metres. In addition to similar sands to those 
encountered in the MEX-106 well, a 120 metre thick 
limestone was also discovered towards the lower part of the 
B-Sands sequence. This well proved to be a real challenge as 
several over-pressured gas-kicks had to be controlled whilst 
drilling, with the first encountered upon entering the 
limestone. The mud-weight was loaded to a specific gravity of 
1.95 in order to control the well. After this well section was 
cased, it was decided to defer bringing the lower part of the 
well into production pending further evaluation of the possible 
expected high pressures. Consequently, only the B-Sands 
sequence was selectively perforated. The well test indicated a 
low connectivity with the formation and a higher than 
expected ratio of gas to condensate. To increase the 
connectivity and productivity of the well, a jet perforating “trial” 
was undertaken whereby perforations were made using an 
abrasive jet slurry of water and sand. This technique resulted 
in a significant increase in productivity in the test zone. The 
well was taken on production while preparing for a full-scale 
jet perforating intervention in combination with the use of 
other advanced perforation techniques to further enhance 
production.
The third well, SV-61, was spudded in September 2009 and 
drilled to a total depth of 5,969 metres, which was reached on 
12 January 2010. A total of 22 metres of net pay was logged 
over the B-Sands (B-20 to the top of the B-23). A slotted 
liner was run to case the 6" hole section. The jet perforating 
trial was extended to SV-61 where a pipe conveyed jet 
perforating programme was executed to perforate the 7" 
casing using the drilling rig equipment. 
The fourth well, SV-66, was spudded on 23 November 2009 
and drilled to a depth of 5,894 metres and the fifth well, MEX 
120, was spudded on 12 April 2010.
The subsurface model of the field was completed by the end 
of 2009. The model is being continuously updated with the 
data obtained from the newly drilled wells to refine the model 
and to increase its accuracy.  20
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Our Business
Chief Operating Officer’s Review continued
Romania
The Company has continued to explore its Romanian assets, the 
Barlad block (Regal 100% and operator) and the Suceava block 
(Regal 50% non-operated).
In the Barlad block, 104.7 km of 2D seismic was acquired 
between November 2009 and early January 2010 with an 
interruption due to the severe winter weather. The remaining 
licence commitment on this block at year end was the drilling of 
an additional well, and this well is scheduled for spud in Q3 
2010. A nine month extension on this drilling commitment was 
granted to allow the evaluation of the new seismic data so as to 
more accurately position this exploration well. Towards the end 
of the year, work commenced on assessing the shale gas 
potential of the block. The initial reservoir target within the 
concession area is the shallower Palaeozoic Formation which 
has six potential structural leads that can also be seen in the 
deeper Silurian on 2D seismic data.  Additional confirmation of 
the presence of the Silurian Formation has been confirmed by 
the Regal SE1 well in the adjacent Suceava block, where the 
formation was intercepted at a depth of 1,950 metres. Based on 
the information available all the necessary requirements for a 
successful shale gas play can be found within the Barlad block. 
In the Suceava block, the 2D seismic data acquired during the 
year has enabled the identification of a modest sized gas 
prospect 2.5 km to the east of the Vicsani discovery in the 
neighbouring Brodina Concession, also operated by Aurelian Oil 
& Gas plc. It is intended to drill a shallow gas well to meet the 
remaining work programme obligations during 2010. Work has 
established that the Vicsani field in the adjacent Brodina 
Concession extends into the Suceava block and further work to 
assess the relative contribution of reserves from the Suceava 
and Brodina concessions respectively is currently underway. It is 
anticipated that a net share of between 7.5% and 15% of the 
field’s production will be assigned to Regal on settlement of a 
proportional contribution to the historic cost associated with  
this field. 
egypt
The Company holds a 25% non-operated interest in the East 
Ras Budran concession in the Gulf of Suez, Egypt through a 
joint venture with Apache as operator. Exploration and appraisal 
work has continued at the concession although the overall level 
of activity has been relatively low this year. The main focus has 
been the identification of new prospects. Data was acquired to 
develop a digital elevation model (DEM) of an area which was 
less accessible to seismic acquisition. This was followed by a 
ground control point (GCP) survey. The geo-rectification, 
interpretation and field mapping was ongoing at the year end.  
In addition, a survey was undertaken on the fractured Eocene 
carbonates in the East Ras Budran area to further understand 
reservoir behaviour. 
A work-over on the ERB-A-1X well, drilled in 2007, was required 
to replace a failed Electric Submersible Pump (ESP). Owing to 
difficulties experienced pulling the ESP, operations were 
suspended.
The 2010 plan for Egypt includes the further development of 
the field on the back of the discovery in the ERB-A-1X well. 21
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Chief Executives Review
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Chief Operating Officer’s Review 22
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Chief Executives Review
Stockcode: RPT www.regalpetroleum.co.uk
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Our Business 
Finance Review
Our Business
Finance Review
Robert Wilde
“Revenues are up 74% on the prior year and gross profit 
has increased 136%. This year’s results begin to 
reveal a real shift in the Company’s fortunes as the 
investment to date starts to make a positive impact on
the income statement.” 
$182.2 million. This had risen from $87.8 million the previous 
year end since, during 2009, $94.9 million was incurred on 
capital expenditure, of which 98% related to development 
expenditure in Ukraine. At 31 December 2009, the Company 
held $20.1 million in stock, being mostly long-lead items held for 
future drilling, such as casing, drill bits and christmas trees. The 
receivables include $16.8 million of purchase tax, which is 
recoverable against sales tax on future sales revenue.
The majority of Regal’s turnover is derived from gas sales from 
its Ukrainian gas and condensate field. The Ukrainian 
Government sets the gas price cap, typically on an annual basis, 
for gas sold to industrial and domestic retail customers. Such 
gas prices are driven by the imported, US Dollar-based, gas 
price from Russia, since the majority of Ukrainian consumption 
is satisfied by Russian imports. Approximately 20% of Ukrainian 
demand is met from domestic production with the balance being 
supplied by Gazprom. Since the fall of communism in 1992, 
Ukraine has enjoyed a discounted gas price from Russia rather 
than the European market price. In recent years, this discounted 
price has been converging with the European market price 
which, when coupled with higher oil prices in recent years, has 
driven a higher market price for gas and has led to a dramatic 
year on year increase in Ukrainian gas prices. This trend 
continued into 2009, where Regal realised an average price for 
its gas equivalent to $244 per Mm³, being a 31% rise on the 
previous year. Furthermore, gas sales volumes are up 64% on 
2008. The combined effect is a 120% rise in gas revenue over 
the previous year. Condensate prices are achieved at regular 
Overview
In last year’s Annual Report, the emphasis of the Finance 
Review was on the strength of the balance sheet; being focused 
both on cash and development capital expenditure. Through the 
support of Regal’s shareholders, $105 million (gross) of new 
capital was raised by the secondary placing of 104,000,000 
new shares at 61 pence per share on 1 July 2009. As at  
31 December 2009, Regal held $118.6 million in cash, $20.1 
million in stock and had no debt. Whilst the balance sheet 
strength remains the major aspect of the financial statements 
for 2009, this year’s results begin to reveal a real shift in the 
Company’s fortunes as the investment to date starts to make a 
positive impact on the income statement. Revenues are up 74% 
on the prior year and gross profit has increased 136%. The net 
loss after tax has been cut from $50.8 million in 2008 to $9.8 
million in 2009. Whilst these numbers are modest, when 
compared to future expectations, the change is significant. 
Given the further increase in production following the year end, 
2010 appears to be gaining momentum towards a positive 
earnings outlook.
Operational Performance
At 31 December 2009, Regal held non-current assets of 
Towards positive 
earnings 24
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Our Business
Finance Review continued
with the provisions of IFRS 2 and relates to share options issued 
to Directors and staff. The total number of shares under option 
at the end of the year was 7,950,229. 
The income tax expense of $2.9 million includes a net deferred 
tax charge of $2.8 million reflecting the accelerated capital 
allowances on expenditure in Ukraine. 
Regal manages its treasury function by forecasting short and 
longer term cash flows, by currency. These are then used to 
determine estimated functional need, by currency denomination, 
and deposits are held accordingly. Such deposits are also placed 
on varying term deposits so as to optimise interest income. 
Investment revenue of $0.9 million for 2009, being derived from 
funds held on deposit, is significantly lower than for 2008 ($5.5 
million). Whilst this is attributable, in part, to lower average cash 
balances held, it is more notably influenced by the markedly 
reduced interest margins available to depositors as a result of 
the recent financial crisis. The foreign exchange gain of $1.5 
million contrasts sharply with last year’s loss of $28.9 million, 
although the majority of the latter was unrealised and reflected 
the extreme currency movements towards the end of 2008.
Key Performance Indicators
The Company has devised a strategy to monetise the Ukrainian 
gas and condensate assets by means of a detailed field 
development and implementation programme and to assess its 
performance against a set of performance criteria. The Board 
and management are incentivised to deliver shareholder value in 
line with this strategy. Under the new Long Term Incentive 
Programme (LTIP), options previously included under the 2004 
share option plan have been modified and new options granted 
subject to the satisfactory achievement of a comprehensive set 
of performance criteria over target vesting periods which have 
been established. The performance criteria encompasses, inter 
alia, certain financial, operational/drilling, corporate health and 
safety targets and completion of a new independent reserves 
report. In this manner, the interests of the Company’s 
management and staff are aligned to shareholder interests.
auctions and are, therefore, effectively sold at a spot price to a 
number of customers. This price is driven by the prevailing oil 
price and fluctuates, depending on demand and season. 
Occasionally, such as during the late summer harvest period, 
condensate prices can exceed oil prices. The average price 
realised for 2009 was $57/bbl; being a 32% fall on 2008, 
following the collapse in oil prices that had seen a peak of over 
$140/bbl in the summer of 2008. Mitigating this, condensate 
sales volumes rose 45% and, as such, overall condensate 
revenue rose 9%.
Cost of sales includes Government royalties. The Ukrainian 
Government incentivises the exploitation of deeper resources by 
reducing the royalty rate on production that is sourced from 
below 5,000 metres. The income statement includes a lower 
combined royalty rate than in the previous year for this reason 
and also because of the lower price realised on the condensate 
sales reflecting the lower oil prices generally. Consequently, 
although sales have risen by 74%, cost of sales has risen by 
only 10%, thereby delivering a gross profit of $13.6 million; 
being a 136% increase on 2008. Variable operating costs 
remain relatively low. The paradox of the Company’s Ukrainian 
field is that the relatively high capital cost of drilling deep wells 
is, in the overall field economics, somewhat mitigated by the low 
production costs and favourable fiscal regime.
The income statement includes other administrative expenses  
of $15.1 million, compared to $18.0 million in 2008. This  
16% decrease was largely achieved as a result of austere  
cost-cutting measures, particularly with regard to staff and 
related costs, legal fees and consultancy arrangements. The 
expenses also include a charge of £0.6 million ($1 million) 
arising from the AIM Disciplinary Committee’s decision in final 
resolution of the regulatory matters arising during the period 
2003–05. These events predate the appointment of the current 
Board, who are pleased to have finally divorced themselves from 
this historic episode. 
The share-based charge in the income statement of $7.6 million 
is a non-cash item as calculated for the period in accordance  25
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Chief Executives Review
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Finance Review
“This trend continued into 2009, where Regal realised an 
average price for its gas equivalent to $244 per mm
3
, being 
a 31% rise on the previous year. Furthermore, gas sales 
volumes are up 64% on 2008. The combined effect is a 
120% rise in gas revenue over the previous year.”  26
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Our Business
Operating environment, Principal Risks
and uncertainties
The political situation in Ukraine has continued to attract market 
attention in the run-up to the Presidential elections which 
concluded with the former Prime Minister, Mr Viktor Yanukovych, 
taking office as President in February 2010 and a new 
governing coalition being formed. Whilst Regal enjoyed good 
relations with the Government when Mr Yanukovych was 
formerly the Prime Minister, as with any change in Government 
there are always short-term uncertainties as new policies and 
direction take effect. 
The Ukrainian Government is keen to develop the country’s 
domestic production of hydrocarbons since Ukraine imports the 
majority of its gas needs from Russia. Whilst this should put 
Regal in a well-placed position, there is also the risk of the 
Ukrainian Government seeking to address this in its fiscal 
structure. 
The Group’s management has considerable experience of 
operating in countries which were once part of the Soviet Union, 
consequently sharing similar customs and practices. The 
operations in Ukraine are also managed by a local national. 
Additionally, the Group operates within a working agreement 
with local state-owned companies, under which terms for 
co-operation in relation to the development of the Ukrainian 
fields have been outlined.
Romania is already a member of the European Union and has 
moved a long way down the path of changes to the political and 
economic framework required of such a member state. The 
operations in Romania are managed by a local national with 
extensive experience of working in the oil and gas sector.
Egypt has a long and established track record of foreign 
investment into the country’s oil sector. Whilst the current 
Government remains in power, the political risks posed in this 
country are not currently considered to be significant.
The Company has a risk evaluation methodology in place to 
assist in the review of the risks across all material aspects of its 
business. This methodology highlights technical, operational, 
external and fiduciary risks and assesses the level of risk and 
potential consequences. It is presented to the Board and Audit 
Committee on a quarterly basis for review, to bring to their 
attention potential concerns and, where possible, suggest 
mitigating action. Key risks recognised are detailed below.
Financial markets and Global economic Outlook 
The performance of the Company will be influenced by global 
economic conditions and, in particular, the conditions prevailing 
in the United Kingdom, Ukraine, Romania and Egypt. The 
economies in these regions have all been subject to 
recessionary pressures during the period, with the global 
economy experiencing continued difficulties during 2009. 
Although the financial markets have settled somewhat from the 
turmoil of late 2008, liquidity in the banking and investment 
arenas remains tighter than prior to 2008. If these pressures 
continue, worsen, abate or recur, the Company is likely to 
experience difficulty in securing debt finance, if required, to fund 
its long-term development strategy. The Group may be exposed 
to increased counterparty risk as a result of business failures in 
the countries in which it operates and will continue to be 
exposed if counterparties fail or are unable to meet their 
obligations to the Group. The precise nature of all the risks and 
uncertainties the Group faces as a result of the current global 
financial crisis and global economic outlook cannot be predicted 
and many of these risks are outside of the Group’s control.
Risks relating to the ukraine, Romania and egypt
Emerging markets are subject to greater risks than those that 
are more developed including, in some cases, significant legal, 
economic and political risks. Such economies may also be 
subject to rapid change and the Group needs to adapt and alter 
itself, as needed, relatively quickly.  27
Our Performance 
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Chief Executives Review
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Risks and Uncertainties 28
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Our Business
Operating environment, Principal Risks 
and uncertainties continued
the Company’s realised price rising to $242/Mm³ from $187/
Mm³ in 2008. However, recent political pressures may to some 
degree mitigate the size of anticipated future rises, particularly in 
the short term. 
Given the relatively low production volumes at present, 
compared to anticipated future volumes, the overall project 
economics (being the net present value of the future cash flows 
from the Ukrainian project) are far more sensitive to long term 
oil (and hence gas) prices than short term oil price volatility. 
However, short-term volatility does affect liquidity risk, as in the 
early stage of the project, income streams from production 
revenues are outweighed by capital investment.
Production risks
Producing gas and condensate reservoirs are generally 
characterised by declining production rates that vary depending 
upon reservoir characteristics and other factors. Any future gas 
and condensate reserves of the Group, production and, 
therefore, the Group’s cash flow and income are highly 
dependent on the Group’s success in efficiently developing and 
exploiting any reserves and finding or acquiring additional 
reserves. The Group may not be able to develop, find or acquire 
reserves at acceptable costs. The experience gained from the 
drilling so far highlights the increasing risk profile as Regal 
targets the appraisal of the deeper potential hydrocarbons and, 
consequently, the accessibility of the T-Sands upside. 
Industry risks
The Company’s ability to execute its strategy is subject to risks 
that are generally associated with the oil and gas industry. For 
example, the Group’s ability to pursue and develop its projects 
and development programmes depends on a number of 
uncertainties, including the availability of capital, seasonal 
conditions, regulatory approvals, gas, oil and condensate prices, 
costs and drilling success. As a result of these uncertainties, it is 
unknown whether potential drilling locations identified on 
proposed projects will ever be drilled or whether these or any 
other potential drilling locations will be able to produce gas, oil or 
condensate. In addition, drilling activities are subject to many 
risks, including the risk that commercially productive reservoirs 
will not be discovered. Drilling for hydrocarbons can be 
unprofitable, not only from dry holes, but from productive wells 
that do not produce sufficiently to be economic. In addition, 
drilling and production operations may be curtailed, delayed or 
cancelled as a result of other factors. 
Currency risk
The Company’s main activities are i) the significant investment 
into the development of the Group’s Ukrainian gas and 
condensate assets; ii) the production and sale of gas, oil and 
condensate; and iii) the continued exploration for further 
hydrocarbon reserves. The majority of costs and revenues are 
US Dollar or Euro related, but with significant elements of the 
same being exposed to local currencies. Where possible, risks 
relating to local currencies are mitigated contractually by tying 
into the US Dollar and Euro. The placing of new shares in 
February 2008, July 2008 and July 2009 predominantly raised 
new funds in Sterling for the Company giving US Dollar and 
Euro exposure. Where practical, a proportion of funds are 
converted into relevant currencies, when known, to effectively 
hedge against this exposure. Much of these funds were 
converted soon after receipt. 
As the Company moves forward with an anticipated rise in 
revenues it becomes more exposed to volatility in the Hryvnia 
since revenues are received in this currency. Currently, the 
currency does not enjoy the range of benefits of currency 
hedging instruments that are available in more developed 
economies. 
Oil and gas price risk
The Company currently derives its revenue from the sale of 
Ukrainian gas and condensate. Whilst these revenues are 
relatively modest, because of the development stage at which 
Regal finds itself, these revenues are still subject to oil price 
volatility and political influence. A prolonged period of low oil  
or gas prices may impact the Group’s ability to maintain its long 
term investment programme with a consequent effect  
on growth rate which may impact the share price or any 
shareholder returns. Lower gas and condensate prices may not 
only decrease the Group’s revenues on a per unit basis, but also 
may reduce the amount of gas and condensate that the Group 
can produce economically.
Although set in Hryvnia, Ukrainian gas prices are largely dictated 
by Russian, US Dollar-based, import prices because of the 
dependency of Ukraine on imported gas. Following the 
statement by Gazprom in 2008 of its intention to converge the 
Ukrainian gas prices with the higher market prices of Western 
Europe (which are themselves intrinsically linked to the oil price), 
it is likely that this will result in further upward pressure on the 
gas price, as was seen with the increase in January 2009 with  29
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Risks and Uncertainties
Risks relating to further development and 
operation of the gas fields in ukraine
The planned development of the Ukrainian fields is susceptible 
to appraisal and development risk. This could include, but is not 
restricted to, delays in delivery of equipment into Ukraine; failure 
of key equipment; lower than expected production from the 
wells as they are brought on-stream; problematic wells; or 
complex geology that is difficult to drill or interpret. The 
generation of significant operational cash envisaged in the 
coming years from this development is dependent on the 
successful delivery and completion of the development of the 
fields. Furthermore, the optimisation of all of the Company’s 
assets is dependent on maintaining constructive relationships 
between all of our business stakeholders. 
Capital Risk management
The Group’s objective when managing capital is to safeguard 
the Group’s ability to continue as a going concern in order to 
provide returns for shareholders and benefits for other 
stakeholders and to maintain an optimal capital structure to 
reduce the cost of capital. 
exposure to credit, liquidity and cash flow risk
The Group does not currently have any outstanding loans. Most 
of its gas is paid for monthly in advance based on estimated 
production with a correcting settlement made in the following 
month. Debtors and risk of non-payment are, therefore, not 
particularly significant at present. Creditors are more relevant as 
the capital investment gathers pace. In most cases, endeavours 
are made to arrange for delivery before payment for the goods is 
made, but this is not always possible and a risk does exist. A 
proportion of invoiced sums are often retained until delivery and, 
where possible, orders are placed with reputable, known 
suppliers. Internal financial projections are regularly made based 
on the latest estimates available and various scenarios to assess 
the robustness of the liquidity of the Group are run. Following 
the capital raised in 2009, the Group currently holds sufficient 
cash for the anticipated medium term needs of the business. 
Whilst much of future capital need is expected to be increasingly 
derived from operational cash generated from production from 
the wells to be drilled, there is a risk that insufficient operational 
cash is generated, or that additional funding, should the need 
arise, cannot be secured. 
Risks relating to key personnel
Regal has a relatively small team of executives and senior 
management. Whilst this is sufficient for a Company of this 
nature, there is a dependency risk relating to the loss of key 
individuals. 
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ReGal PeTROleum PlC Annual Report and Accounts 2009
Our Governance
Board of directors
1 Keith Henry
Chairman
Keith has a wealth of experience gained 
over 35 years in development, construction 
and management of projects in the oil & 
gas and energy industries. He was Chief 
Executive of National Power, Brown & Root 
and Kvaerner Engineering and Construction. 
Keith also held the roles of Non-Executive 
Chairman at Burren Energy and of 
Non-Executive Director at First Calgary 
Petroleums. He was deputy Chairman of 
Petroleum Geo-Services ASA from 2003 
and led the demerger as Chairman of 
Petrojarl ASA in 2006. Keith has also been 
Non-Executive Director of South East 
Water and Enterprise Oil. He is currently 
Chairman of Helius Enery, and the senior 
Director of Sterling Energy. Keith is a Fellow 
of the Royal Academy of Engineering and 
a Chartered Civil Engineer with a BSc from 
London University and an MSc from the 
University of Birmingham. 
3 Robert Wilde
Finance Director
Robert has 25 years of extensive 
experience in the energy industry, having 
worked in both upstream oil and gas and 
in downstream power generation. His 
career with Phillips Petroleum, Ranger Oil, 
Powergen, RWE and Baltic Oil Terminals 
has given him in-depth exposure to onshore 
and offshore exploration and production, 
M&A, IPO, financial management and 
structured finance activities in the North 
Sea, Portugal, Germany, Italy, Russia and 
Eastern Europe. Robert read Geology & 
Geophysics at the Royal School of Mines, 
Imperial College, London and qualified as a 
Chartered Accountant with Ernst & Young, 
London.
1 2 3 4 5 6
2 david Greer OBe
Chief Executive Officer
David’s oil and gas career spans over 30 
years, almost entirely with Shell International 
Exploration and Production, prior to joining 
Regal in 2007. He has been the keystone 
to Regal’s recent turn-around, having 
personally recruited many former business 
colleagues or drawn on his vast network 
of relationships within the industry. David 
has held a wide variety of engineering, 
commercial, production and senior executive 
positions in Shell’s operations in the United 
Kingdom, the Netherlands, Norway, Canada, 
Oman, Argentina, the Philippines and, 
more recently, as deputy CEO and project 
Director of the Sakhalin 2 project in Russia. 
He read Civil and Structural Engineering at 
the University of Edinburgh and is a Fellow 
of the Institution of Mechanical Engineers. 
David was awarded his OBE in the 2003 
New Year honours list. Our Performance 
Chairman’s Statement 
Chief Executives Review
17759	 07/05/10	 Proof	5
Stockcode: RPT
31
www.regalpetroleum.co.uk
Our Governance 
Board of Directors
5 adrian Coates
Non-Executive Director
Adrian joined the Board in July 2008 
following retirement from HSBC Bank 
where, for 10 years, he held the role 
of Global Sector Head; Resources and 
Energy Group; Global Banking and Markets 
Division. He has wide investment banking 
experience, having held senior roles in UBS, 
Warrior International and Credit Suisse 
First Boston. He specialised in the natural 
resources sector and his City experience 
is extensive, having advised on many 
substantial corporate transactions. Adrian 
also serves as a Non-Executive Director in 
Kazakhgold Group. He holds an MA (Econ) 
from Cambridge University and an MSc 
(MBA) from the London Business School.
6 dr alastair Graham
Non-Executive Director
Alastair has over 30 years experience in the 
oil and gas industry having held a number of 
senior management roles with BP, including 
UK Business Development Manager, 
Upstream Mergers and Acquisitions 
Manager, V-P of OAO Sidanco in Russia, 
leader of BP’s Southern North Sea gas 
production business, V-P of BP Exploration 
Alaska and, most recently, leader of BP’s 
Russia business unit and its shareholder 
representative for the TNK-BP joint venture. 
Since retirement from BP in March 2009, 
Dr Graham has provided consultant advisory 
services in the oil and gas sector. He read 
Natural Sciences at Cambridge University; 
holds a PhD in Geology from the University 
of Edinburgh and an MBA from the 
University of Strathclyde.
4 Harry Verkuil
Chief Operating Officer
Harry’s 25 year career with Shell 
International Exploration and Production 
exposed him to a wide variety of 
engineering, operational and management 
roles in the Netherlands, Brunei, United 
Kingdom, Pakistan, India and, more recently, 
Saudi Arabia where he held the position 
of acting operations manager with South 
Rub Al Khali Company Limited. Harry 
read Mechanical Engineering at H.T.S. 
Amsterdam and is a Chartered Engineer. 17759	 07/05/10	 Proof	5
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ReGal PeTROleum PlC Annual Report and Accounts 2009
Our Governance
Corporate Governance Statement
Companies on the Alternative Investment Market of the London 
Stock Exchange are not required to comply with the Combined 
Code and due to its size the Company is not in full compliance. 
The Directors, however, support high standards of corporate 
governance and will progressively adopt best practices in line 
with the Combined Code on Corporate Governance, so far as is 
practicable.
The Board
The Board of the Company consists of a Chairman, three 
Executive Directors and two Non-Executive Directors. The 
composition of the Board ensures that no one individual or 
group dominates the decision making process.
The Board is responsible to the shareholders for setting the 
direction of the Company through the establishment of strategic 
objectives and key policies. The Board meets on a regular basis 
and considers issues of strategic direction, approves major 
capital expenditure, appoints and monitors senior management 
and any other matters having a material effect on the Company. 
Presentations are made to the Board by senior management on 
the activities of operations and Executive Directors undertake 
regular visits to operations.
All Directors have access to management, including the 
Company Secretary, and to such information as is needed to 
carry out their duties and responsibilities fully and effectively.
Furthermore, all Directors are entitled to seek independent 
professional advice concerning the affairs of the Company at its 
expense. All Directors are subject to election by shareholders at 
the first opportunity following their appointment. In addition, 
Directors will retire by rotation and stand for re-election by 
shareholders at least once every three years in accordance with 
the Company’s articles of association.
The Chairman and a Non-Executive Director are interested in 
ordinary shares and hold options in respect of ordinary shares. 
The Company does not consider that these interests, which 
serve to align their interests with shareholders generally, 
adversely affect their independence as Non-Executive Directors.
Remuneration Committee
The Remuneration Committee, comprising solely independent 
Non-Executive Directors and the Chairman who is considered to 
be independent for this role, is responsible for establishing and 
developing the Company’s general policy on executive and 
senior management remuneration and determining specific 
remuneration packages for Executive Directors.
The Remuneration Committee presently comprises: Keith Henry 
(chairman), Adrian Coates and Alastair Graham. Lord St John of 
Bletso and Antonio Mozetic resigned from this committee on  
14 January 2010 in conjunction with their resignation as 
Non-Executive Directors of the Company.
audit Committee
The Audit Committee, comprising solely independent Non-
Executive Directors and the Chairman who is considered to be 
independent for this role, meets not less than twice a year and 
considers the Company’s financial reporting (including 
accounting policies) and internal financial controls.
Meetings are normally attended, by invitation, by the Chief 
Executive Officer, the Finance Director and a representative of 
the Auditors.
The Audit Committee presently comprises: Adrian Coates 
(chairman), Keith Henry and Alastair Graham. Lord St John of 
Bletso and Antonio Mozetic resigned from this committee on  
14 January 2010 in conjunction with their resignation from  
the Company.
nomination Committee
The Directors do not consider that, given the size of the Board, it 
is appropriate to have a Nomination Committee. The 
appropriateness of such a committee will, however, be kept 
under regular review by the Company.
Internal Control
The Directors are responsible for the Group’s system of internal 
control and reviewing its effectiveness. Any such system is 
designed to manage rather than eliminate the risk of failure to 
achieve business objectives and can only provide reasonable 
and not absolute assurance against material misstatement  
or loss.
Internal controls and business risks were monitored in the 
course of 2009 through regular Board meetings.
Communication with shareholders
The Board recognises that it is accountable to shareholders for 
the performance and activities of the Group.
The eighth annual meeting of the Company will provide an 
opportunity for the Directors to present to the shareholders a 
report on current operations and developments and enable the 
shareholders to express their views about the Company’s 
business.
The annual report together with other information about  
the Group is available on the Group’s website at  
www.regalpetroleum.co.uk. Our Performance 
Chairman’s Statement 
Chief Executives Review
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www.regalpetroleum.co.uk
33
Stockcode: RPT
Our Governance 
Corporate Governance Statement/ 
Directors’ Report
directors’ Report
The Directors present their annual report and the audited 
financial statements for the year ended 31 December 2009.
Principal activities
The principal activities of the Group are oil and gas exploration, 
development and production. The Group has its head office in 
London and has oil and gas interests in Ukraine, Romania and 
Egypt. The subsidiary undertakings principally affecting the 
profits or net assets of the Group are listed in Note 13 to the 
financial statements.
Proposed dividend
The Directors do not recommend the payment of a dividend 
(2008: $nil).
Policy and Practice on Payment of Creditors 
The Group and Company’s policy on payment of creditors is to 
settle all amounts with its creditors on a timely basis taking into 
account the credit period given by each supplier.
The Group and Company’s average number of days purchases 
included within trade creditors at the year end was 40 for the 
Group and 28 for the Company (2008: 28 for Group and 
Company).
Business Review
The Company is required by the Companies Act 2006 to include 
a review of the business and likely future developments. This 
information is contained in the Chairman’s Statement, Chief 
Executive Officer’s Statement, Chief Operating Officer’s Review 
and the Finance Review on pages 5 to 25.
Capital Structure
Details of the authorised and issued share capital, together with 
details of the movements in the Company’s issued share capital 
during the year are shown in Note 22. The Company has one 
class of ordinary shares which carry no right to fixed income.  
Each share carries the right to one vote at general meetings of 
the Company. 
There are no specific restrictions on the size of a holding nor on 
the transfer of shares, which are both governed by the general 
provisions of the Articles of Association and prevailing 
legislation. The Directors are not aware of any agreements 
between holders of the Company’s shares that may result in 
restrictions on the transfer of securities or on voting rights. 
Details of the employee Long Term Incentive Plan and the Share 
Option Scheme are set out in Note 22.
No person has any special rights of control over the Company’s 
share capital and all issued shares are fully paid. With regard to 
the appointment and replacement of Directors, the Company is 
governed by its Articles of Association, the Companies Act and 
related legislation. The Articles themselves may be amended by 
special resolution of the shareholders. The powers of Directors 
are described in the Main Board Terms of Reference, copies of 
which are available on request, and the Corporate Governance 
Statement on page 32.
Under its Articles of Association, the Company has authority to 
issue 600,000,000 (2008: 300,000,000) ordinary shares. 
Going Concern 
The Group’s business activities, together with the factors likely 
to affect its future development, performance and position, are 
set out in the Chief Executive Officer’s Statement on pages 6 to 
13. The financial position of the Group, its cash flows and 
liquidity position are described in the Finance Review on pages 
23 to 25. In addition, note 26 to the financial statements 
includes the Group’s objectives and strategies for managing its 
capital, details of its financial instruments and its exposures to 
currency, interest rate and liquidity risk. 
Although the Company has a reasonable level of funds held in 
cash and carries no debt at the end of the year, it should be 
recognised that, in addition to the risks identified under the 
section titled Operating Environment, Principal Risks and 
Uncertainties, the Company faces further risk and uncertainty 
with regard to the timing and volumes of production from future 
wells. Whilst it is the Company’s intention to fund the majority of 
the planned capital expenditure for the development of its gas 
field in Ukraine from future operational cash over the field life, 
there is uncertainty over the precise timing and quantum of this 
operational cash. This has been highlighted on the first wells, 
where challenges have been met whilst accessing the deeper 
horizons. 
Consequently, an alternative strategy, to enable the Company to 
survive as a going concern, has been developed by the Board 
whereby focus has been placed on the development of the 
lower-risk B sands only with a view to more reliably sourcing 
cash flows in the short term and to return to deeper appraisal 
once operational cash has been increased. Whilst this strategy 
temporarily slows down the anticipated ramp-up rate in 
production, it ensures that the business operates within the cash 
generated from existing production and expected future 
production from the wells currently being drilled. This strategy is 
underpinned by a number of assumptions which involve making 
judgements about future events, such as gas price, a stable  17759	 07/05/10	 Proof	5
34
ReGal PeTROleum PlC Annual Report and Accounts 2009
fiscal regime, successful drilling, expected future production levels, drilling schedule and drilling rig commitments. The Directors 
consider these assumptions to be reasonable at this time and the Group’s forecasts and projections using this alternative strategy, 
taking account of reasonable possible changes in the above assumptions, show that the Group anticipates that it should be able to 
operate within the levels of its available cash balances for the foreseeable future. Nevertheless, circumstances may be subject to 
change; both favourable and adversely. 
The Board’s review of the accounts, budgets and forward plans, leads the Directors to believe that the Group has sufficient 
resources to continue in operation for the foreseeable future. The financial statements are therefore prepared on the going concern 
basis of accounting.
Post Balance Sheet events
Post balance sheet events are described in Note 29 to the financial statements.
directors and directors’ Interests
The Directors who held office during the year were as follows:
   date appointed date resigned
K Henry   — —
D J Greer   — —
H Verkuil   — —
R Wilde   — —
A Coates   — —
A Graham    14 January 2010 —
Lord St John of Bletso   — 14 January 2010
A Mozetic   — 14 January 2010
The Directors who held office at the end of the financial year had the following interests in the ordinary shares of the Company:
  Interest at
  start of
  year or if later  Interest Interest
 Class of date of  at end of at date of
 share appointment year this report
D J Greer Ordinary 110,000 110,000 510,000
K Henry Ordinary 30,000 50,000 150,000
A Coates Ordinary — 30,578 77,245
Lord St John of Bletso Ordinary 106,500 106,500 106,500
H Verkuil Ordinary — — 230,000
R Wilde Ordinary — — 120,000
Between year end and the date of this report, changes in the interests of Directors are due to the exercise of share options which 
were granted under the LTIP scheme in 2009.
None of the Directors who held office at the end of the financial year had any disclosable interest in the shares of other Group 
companies.
According to the register of Directors’ interests, no rights to subscribe for shares in or debentures of Group companies were granted 
to any of the Directors or their immediate families, or exercised by them, during the financial year except as indicated in Note 5.
directors’ Indemnities
The Company has made qualifying third party indemnity provisions for the benefit of its Directors which were made during the year 
and remain in force at the date of this report. 
Our Governance
directors’ Report continued Our Performance 
Chairman’s Statement 
Chief Executives Review
17759	 07/05/10	 Proof	5
www.regalpetroleum.co.uk
35
Stockcode: RPT
Our Governance 
Directors’ Report
Substantial Shareholders
As of 23 April 2010 the Company had been notified of the following interests of 3% or more in its issued share capital:
     % of issued
   number of  ordinary share 
Substantial Shareholder   shares capital
BlackRock Investment Management   31,445,782 9.88%
Safeguard Management   21,836,881 6.86%
Pope Asset Management   21,288,201 6.69%
Capital Research and Management Company   20,130,202 6.32%
Henderson Global Investors    16,052,733 5.04%
Ceska Sporitelna   12,636,067 3.97%
SEB Asset Management S.A.   11,402,669 3.58%
Statement of directors’ Responsibilities
The Directors are responsible for preparing the annual report 
and the financial statements in accordance with applicable law 
and regulations.
Company law requires the Directors to prepare such financial 
statements for each financial year. Under that law the Directors 
are required to prepare the Group financial statements in 
accordance with International Financial Reporting Standards 
(IFRSs) as adopted by the European Union and Article 4 of the 
IAS Regulation and have also chosen to prepare the Parent 
Company financial statements in accordance with IFRSs as 
adopted by the European Union. Under company law the 
Directors must not approve the accounts unless they are 
satisfied that they give a true and fair view of the state of affairs 
of the Company and of the profit and loss of the Company for 
that period. In preparing these financial statements, the 
Directors are required to: 
■ properly select and apply accounting policies;
■ present information, including accounting policies, in a 
manner that provides relevant, reliable, comparable and 
understandable information;
■ provide additional disclosures when compliance with the 
specific requirements in IFRSs are insufficient to enable 
users to understand the impact of particular transactions, 
other events and conditions on the entity’s financial position 
and financial performance; and
■ make an assessment of the Company’s ability to continue as 
a going concern.
The Directors are responsible for keeping proper accounting 
records that are sufficient to show and explain the Company’s 
transactions and disclose with reasonable accuracy at any time 
the financial position of the Company and enable them to 
ensure that the financial statements comply with the Companies 
Act 2006. They are also responsible for safeguarding the assets 
of the Company and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity 
of the corporate and financial information included on the 
Company’s website. Legislation in the United Kingdom 
governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions. 
Each of the persons who is a Director at the date of approval of 
this report confirms that, to the best of their knowledge:
■ the financial statements, prepared in accordance with IFRSs 
as adopted by the EU, give a true and fair view of the assets, 
liabilities, financial position and profit or loss of the Company 
and the undertakings included in the consolidation as a 
whole; and
■ the Chairman’s Statement, Chief Executive Officer’s 
Statement, Chief Operating Officer’s Review and the Finance 
Review include a fair review of the development and 
performance of the business and the position of the 
Company and the undertakings included in the consolidation 
taken as a whole, together with a description of the principal 
risks and uncertainties that they face. 17759	 07/05/10	 Proof	5
36
ReGal PeTROleum PlC Annual Report and Accounts 2009
Political and Charitable Contributions
During the year the Group made no charitable donations (2008: 
$nil) and no political contributions (2008: $nil). 
Statement of disclosure to auditors
Each of the persons who is a Director at the date of approval of 
this annual report confirms that:
■ so far as the Director is aware, there is no relevant audit 
information of which the Company’s Auditors are not 
informed; and
■ the Director has taken all steps required to make himself 
aware of any relevant audit information and to establish that 
the Company’s Auditors are informed of that information.
This confirmation is given and should be interpreted in 
accordance with the provisions of s418 of the Companies Act 
2006.
auditors
A resolution to reappoint Deloitte LLP as Auditors will be 
proposed at the next Annual General Meeting.
By order of the Board
Robert Wilde
Director 
23 April 2010 
Our Governance
directors’ Report continued Our Performance 
Chairman’s Statement 
Chief Executives Review
17759	 07/05/10	 Proof	5
Stockcode: RPT www.regalpetroleum.co.uk
37
Our Financials 
Independent Auditors’ Report
Our Financials
Independent auditors’ Report to the  
members of Regal Petroleum plc
We have audited the financial statements of Regal Petroleum 
Plc for the year ended 31 December 2009 which comprise the 
Group Income Statement, the Group and Parent Company 
Statements of Comprehensive Income, the Group and Parent 
Company Balance Sheets, the Group and Parent Company 
Cash Flow Statements, the Group and Parent Company 
Statements of Changes in Equity and the related Notes 1 to 29. 
The financial reporting framework that has been applied in their 
preparation is applicable law and International Financial 
Reporting Standards (IFRSs) as adopted by the European 
Union and as applied in accordance with the provisions of the 
Companies Act 2006.
This report is made solely to the company’s members, as a 
body, in accordance with Chapter 3 of Part 16 of the 
Companies Act 2006. Our audit work has been undertaken so 
that we might state to the company’s members those matters 
we are required to state to them in an auditors’ report and for 
no other purpose. To the fullest extent permitted by law, we do 
not accept or assume responsibility to anyone other than the 
company and the company’s members as a body, for our audit 
work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and 
auditors
As explained more fully in the Directors’ Responsibilities 
Statement in the Directors’ Report, the directors are responsible 
for the preparation of the financial statements and for being 
satisfied that they give a true and fair view. Our responsibility is 
to audit the financial statements in accordance with applicable 
law and International Standards on Auditing (UK and Ireland). 
Those standards require us to comply with the Auditing 
Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and 
disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free 
from material misstatement, whether caused by fraud or error. 
This includes an assessment of: whether the accounting 
policies are appropriate to the Group’s and the parent 
company’s circumstances and have been consistently applied 
and adequately disclosed; the reasonableness of significant 
accounting estimates made by the directors; and the overall 
presentation of the financial statements.
Opinion on financial statements
In our opinion:
■ the financial statements give a true and fair view of the state 
of the Group’s and of the parent company’s affairs as at  
31 December 2009 and of the Group’s loss for the year then 
ended;
■ the Group financial statements have been properly prepared 
in accordance with IFRSs as adopted by the European Union;
■ the parent company financial statements have been properly 
prepared in accordance with IFRSs as adopted by the 
European Union and as applied in accordance with the 
provisions of the Companies Act 2006; and
■ the financial statements have been prepared in accordance 
with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the 
Companies act 2006
In our opinion the information given in the Directors’ Report for 
the financial year for which the financial statements are 
prepared is consistent with the financial statements.
matters on which we are required to report by 
exception
We have nothing to report in respect of the following matters 
where the Companies Act 2006 requires us to report to you if, in 
our opinion:
■ adequate accounting records have not been kept by the 
parent company, or returns adequate for our audit have not 
been received from branches not visited by us; or
■ the parent company financial statements are not in 
agreement with the accounting records and returns; or
■ certain disclosures of directors’ remuneration specified by 
law are not made; or
■ we have not received all the information and explanations we 
require for our audit.
david Paterson (Senior Statutory auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditors 
London, United Kingdom
23 April 2010 17759	 07/05/10	 Proof	5
ReGal PeTROleum PlC Annual Report and Accounts 2009
38
Our Financials
Consolidated Income Statement
for the year ended 31 December 2009
        2009 2008
       Note $000 $000
Revenue      2 19,872 11,450
Cost of sales       (6,230) (5,667)
Gross profit       13,642 5,783
Other administrative expenses       (15,068) (18,023)
Share-based charge      22 (7,618) (9,120)
Total administrative expenses       (22,686) (27,143)
Other operating expenses: exploration costs written off    11 (95) (3,467)
Operating loss       (9,139) (24,827)
Investment revenue      2 939 5,501
Finance costs      7 (144) (525)
Other net gains and (losses)      4 1,514 (28,888)
l oss on ordinary activities before taxation    3 (6,830) (48,739)
Income tax expense      8 (2,989) (2,074)
l oss on ordinary activities after taxation     (9,819) (50,813)
l oss per ordinary share (cents)
Basic and diluted       10  (3.7¢)   (25.6¢)
The income statement has been prepared on the basis that all operations are continuing operations. 
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2009
        2009 2008
        $000 $000
Equity — foreign currency translation      (627) (2,028)
Net expense recognised directly in equity      (627) (2,028) 
Loss for the year       (9,819) (50,813)
Total comprehensive loss for the year      (10,446) (52,841)
Company Statement of Comprehensive Income
for the year ended 31 December 2009
        2009 2008
        $000 $000
Loss for the year       (13,194) (39,881)
Total comprehensive loss for the year      (13,194) (39,881) Our Performance 
Chairman’s Statement 
Chief Executives Review
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39
Our Financials 
Consolidated Income Statement/ 
Consolidated Balance Sheet
Consolidated Balance Sheet
at 31 December 2009
        2009 2008
       Note $000 $000
assets
non-current assets
Intangible assets      11 27,067 26,200
Property, plant and equipment      12 151,492 61,588
Trade and other receivables      15 3,593 —
        182,152 87,788
Current assets
Inventories      14 20,066 19,021
Trade and other receivables      15 16,752 7,507
Cash and cash equivalents      16 118,592 106,078
        155,410 132,606
Total assets       337,562 220,394
l iabilities
Current liabilities
Current tax liabilities       — (171)
Trade and other payables      17 (23,489) (9,038)
        (23,489) (9,209)
net current assets       131,921  123,397
non-current liabilities
Trade and other payables      19 (41) (101)
Provisions       20 (3,878) (2,358)
Deferred tax      21 (5,892) (3,093)
        (9,811) (5,552)
Total liabilities       (33,300) (14,761)
net assets       304,262 205,633
equity
Called up share capital      22 27,710 19,094
Share premium account      23  555,090 462,249
Other reserves      23 23,772 17,383
Retained earnings      23 (302,310) (293,093)
Total equity       304,262 205,633
The financial statements of Regal Petroleum plc, Company number 4462555, were approved by the Board of Directors and 
authorised for issue on 23 April 2010. They were signed on its behalf by: 
Robert Wilde
Director 17759	 07/05/10	 Proof	5
ReGal PeTROleum PlC Annual Report and Accounts 2009
40
Our Financials
Consolidated Statement of Changes in equity
at 31 December 2009
    equity
   Share share   Foreign 
  Share premium option merger Capital exchange Retained
  capital account reserve reserve contributions reserve earnings Total
Group $000 $000 $000 $000 $000 $000 $000 $000
At 1 January 2008 12,378 265,899 3,845 (3,204) 7,477 4,563 (245,303) 45,655
Retained loss for the year — — — — — — (50,813) (50,813) 
Current year IFRS 2 charge — — 9,753 — — — — 9,753
Issued shares 6,716 206,390 — — — — — 213,106
Share issue costs — (10,040) — — — — — (10,040)
Exchange differences  — — — — — (2,028) — (2,028)
Transfer for options 
exercised or expired — — (3,023) — — — 3,023 —
At 31 December 2008 19,094 462,249 10,575 (3,204) 7,477 2,535 (293,093) 205,633
    equity
   Share share   Foreign 
  Share premium option merger Capital exchange Retained
  capital account reserve reserve contributions reserve earnings Total
  $000 $000 $000 $000 $000 $000 $000 $000
At 1 January 2009 19,094 462,249 10,575 (3,204) 7,477 2,535 (293,093) 205,633
Retained loss for the year — — — — — — (9,819) (9,819)
Current year IFRS 2 charge — — 7,618 — — — — 7,618
Issued shares 8,616 96,494 — — — — — 105,110
Share issue costs — (3,653) — — —  — (3,653)
Exchange differences  — — — — — (627) — (627)
Transfer for options 
exercised or expired — — (602) — — — 602 —
at 31 december 2009 27,710 555,090 17,591 (3,204) 7,477 1,908 (302,310) 304,262 Our Performance 
Chairman’s Statement 
Chief Executives Review
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Stockcode: RPT www.regalpetroleum.co.uk
41
Our Financials 
Consolidated Statement of Changes in Equity/ 
Consolidated Cash Flow Statement
Consolidated Cash Flow Statement
for the year ended 31 December 2009
        2009 2008
       Note $000 $000
Operating activities
Cash from/(used in) operations      25 7,151 (13,159)
Interest paid       (144) (193)
Taxation paid       (391) (302)
net cash from/(used in) operating activities     6,616 (13,654)
Investing activities
Purchase of property, plant and equipment      (67,356) (24,175)
Increase in related purchase tax receivable      (15,040) (4,173)
Purchase of intangible assets       (838) (8,244)
Purchase of materials inventory       (16,107) (18,797)
Proceeds from sale of property, plant and equipment     63 —
net cash used in investing activities      (99,278) (55,389)
Financing activities
Proceeds from borrowings       — 1,500
Settlement of borrowings       — (10,500)
Funds received in connection with share options     — 7,075
Proceeds from issue of shares      23 105,110 206,030
Payment of share issue costs      23 (3,653) (9,407)
Interest received on surplus funds from share issue     1,063 5,364
net cash from financing activities      102,520 200,062
net increase in cash and cash equivalents      9,858 131,019
Cash and cash equivalents at beginning of year     106,078 5,565
Effect of foreign exchange rate changes      2,656 (30,506)
Cash and cash equivalents at end of year    16 118,592 106,078 17759	 07/05/10	 Proof	5
ReGal PeTROleum PlC Annual Report and Accounts 2009
42
Our Financials
Company Balance Sheet
at 31 December 2009
        2009 2008
       Note $000 $000
assets
non-current assets
Intangible assets      11 151 201
Property, plant and equipment      12 81 279
Investments      13 17,279 17,279
Loans to Group undertakings      13 175,327 92,835
        192,838 110,594
Current assets
Trade and other receivables      15 886 1,265
Cash and cash equivalents      16 116,815 103,014
        117,701 104,279
Total assets       310,539 214,873
l iabilities
Current liabilities
Trade and other payables      17 (1,035) (1,250)
net current assets       116,666  103,029
Total liabilities       (1,035) (1,250)
net assets       309,504 213,623
equity
Called up share capital      22 27,710 19,094
Share premium account      23 555,090  462,249
Share option reserve      23 17,591 10,575
Retained earnings      23 (290,887) (278,295)
Shareholders’ funds       309,504 213,623
These financial statements were approved by the Board of Directors and authorised for issue on 23 April 2010. They were signed  
on its behalf by:
Robert Wilde
Director Our Performance 
Chairman’s Statement 
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43
Our Financials 
Company Balance Sheet/ 
Company Statement of Changes in Equity
Company Statement of Changes in equity
at 31 December 2009
       equity
      Share share 
     Share premium option Retained
     capital account reserve earnings Total
Company     $000 $000 $000 $000 $000
At 1 January 2008    12,378 265,899 3,845 (241,358) 40,764
Retained loss for the year    — — — (39,881) (39,881) 
Current year IFRS 2 charge    — — 9,753 — 9,753
Issued shares    6,716 206,390 — — 213,106
Share issue costs    — (10,040) — — (10,040)
Transfer for options exercised or expired   — — (3,023) 3,023 —
Other    — — — (79) (79)
At 31 December 2008    19,094 462,249 10,575 (278,295) 213,623
       equity
      Share share 
     Share premium option Retained
     capital account reserve earnings Total
      $000 $000 $000 $000 $000
At 1 January 2009    19,094 462,249 10,575 (278,295) 213,623
Retained loss for the year    — — — (13,194) (13,194)
Current year IFRS 2 charge    — — 7,618 — 7,618
Issued shares    8,616 96,494 — — 105,110
Share issue costs    — (3,653) — — (3,653)
Transfer for options exercised or expired   — — (602) 602 —
at 31 december 2009    27,710 555,090 17,591 (290,887) 309,504 17759	 07/05/10	 Proof	5
ReGal PeTROleum PlC Annual Report and Accounts 2009
44
Our Financials
Company Cash Flow Statement
for the year ended 31 December 2009
        2009 2008
       Note $000 $000
Operating activities
Cash used in operations      25 (9,908) (14,595)
Interest paid       — (160)
net cash used in operating activities      (9,908) (14,755)
Investing activities
Purchase of property, plant and equipment      (41) (229)
Investment in Group companies       (82,902) (61,270)
Interest received from Group companies      2,394 —
net cash used in investing activities      (80,549) (61,499)
Financing activities
Proceeds from borrowings       — 1,500
Settlement of borrowings       — (10,500)
Funds received in connection with share options     — 7,075
Proceeds from issue of shares      23 105,110 206,030
Payment of share issue costs      23 (3,653) (9,407)
Interest received on surplus funds from share issue     1,043 5,334
net cash from financing activities      102,500 200,032
net increase in cash and cash equivalents      12,043  123,778
Cash and cash equivalents at beginning of year     103,014 2,239
Effect of foreign exchange rate changes      1,758 (23,003)
Cash and cash equivalents at end of year    16 116,815 103,014 Our Performance 
Chairman’s Statement 
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45
Our Financials 
Company Cash Flow Statement/ 
Notes
notes 
forming part of the financial statements
 1. accounting Policies
Regal Petroleum plc is a company listed on the Alternative Investment Market and incorporated in the United Kingdom under the 
Companies Act 2006. The registered office is Lansdowne House, 57 Berkeley Square, London, W1J 6ER and the Company’s 
registered number is 4462555. The principal activities of the Group and the nature of the Group’s operations are set out in the 
Directors’ Report. The following accounting policies have been applied consistently in dealing with items which are considered 
material in relation to the Group’s financial statements.
 Going Concern
The financial statements have been prepared in accordance with the going concern basis of accounting. The use of this basis of 
accounting takes into consideration the Group’s current and forecast financing position, additional details of which are provided in 
the Going Concern section of the Directors’ Report. 
 Basis of Preparation 
This is the third year in which the Group has prepared its financial statements under International Financial Reporting Standards 
(IFRS), as issued by the IASB and as adopted by the European Union. The financial statements are prepared on the historical cost 
basis except for valuation of certain share-based payments and other financial assets.
 new IFRSs and Interpretations
In preparing the financial statements of the Group for the current year, the Group has adopted the following pronouncements of  
the IASB for the first time. These pronouncements have not had a material impact on the results or net assets of the Group.
 ■ IFRS 8 Operating Segments was issued in October 2006 and defines operating segments as components of an entityabout 
 which separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding 
 how to allocate resources and in assessing performance. The new standard sets out the required disclosures for operating 
 segments and is effective for annual periods beginning on or after 1 January 2009. The new standard has had no impact on 
 the Group’s reported income or net assets. The required disclosures are set out in Note 2.
 ■ In September 2007 the IASB issued Amendments to IAS 1 Presentation of Financial Statements — A Revised Presentation, 
 which required separate presentation of owner and non-owner changes in equity by introducing the statement of  
 comprehensive income. The revised standard is effective for annual periods beginning on or after 1 January 2009. There has  
 been no effect on the Group’s reported income or net assets from the adoption of IAS 1 Revised.
The financial statements have been prepared after adopting the following pronouncements from the IASB which have no effect on 
either the reported results and financial position or the presentation or disclosure within the financial statements.
 ■ IAS 23 (revised 2007) Borrowing Costs
 ■ Amendments to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements — Puttable 
 Financial Instruments and Obligations Arising on Liquidation
 ■ Amendments to IAS 39 Financial Instruments: Recognition and Measurement — Eligible Hedged items
 ■ Embedded Derivatives (Amendments to IFRIC 9 Reassessment of Embedded Derivatives and IAS 39 Financial Instruments: 
 Recognition and Measurement)
 ■ IFRIC 16 (Hedges of a Net Investment in a Foreign Operation) 17759	 07/05/10	 Proof	5
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46
Our Financials
notes continued
forming part of the financial statements
 1. accounting Policies continued
 new IFRSs and Interpretations continued
The following standards, amendments and interpretations to existing standards have been published and are mandatory for the 
Group’s financial statements from 2010 or later periods, but the Group has not early adopted them.
■ 	 IAS 27 (amended) Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate
■ 	 IFRS 2 (amended)* Group Cash-settled Share-based Payment Transactions
■ 	 IFRS 3 (revised 2008) Business Combinations
■ 	 IFRS 9*  Financial Instruments
■ 	 IAS 24 (revised 2009)* Related Party Disclosures
■ 	 IAS 27 (revised 2008) Consolidated and Separate Financial Statements
■ 	 IAS 28 (revised 2008) Investment in Associates
■ 	 IAS 32 (amended)* Classification of Rights Issues
■ 	 IFRIC 14 (amended)* Prepayment of a Minimum Funding Requirement
■ 	 IFRIC 17 Distributions of Non-cash Assets to Owners
■ 	 IFRIC 18 Transfers of Assets from Customers      
■ 	 IFRIC 19* Extinguishing Financial Liabilities with Equity Instruments
             
* Not yet endorsed by EU.
The Directors are still assessing the impact of the adoption of these Standards and Interpretations but do not believe them to have 
a material impact given the Group’s current business plans and operations.
 Basis of Consolidation 
The consolidated financial information incorporates the financial information of the Company and entities controlled by the 
Company (its subsidiaries) made up to 31 December each year. Control is achieved where the Company has the power to govern 
the financial and operating policies of an investee entity so as to obtain benefits from its activities. 
 Subsidiaries
The acquisition of subsidiaries is accounted for using the purchase method. On acquisition, the assets, liabilities and contingent 
liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of cost of acquisition over the fair 
values of the identifiable net assets acquired is recognised as goodwill, any deficiency of the cost of acquisition below the fair 
values of the identifiable net assets acquired (i.e. discount on acquisition) is credited to the income statement in the period of 
acquisition. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement 
from the effective date of acquisition or up to the effective date of disposal, as appropriate. All intra-group transactions, balances, 
income and expenses are eliminated on consolidation.
 Joint ventures
The Group’s companies participate in joint ventures which involve joint control of assets used in the Group’s oil and gas exploration, 
development and producing activities. The Group accounts for its share of the assets and liabilities of joint ventures, classified in the 
appropriate balance sheet heading within each company and at Group level upon consolidation.
 Corporate Restructuring
During 2002 the Group carried out a corporate restructuring including the introduction of a new holding company. As this 
represented a combination of entities under common control, and because this was before 1 January 2006, this business 
combination was outside the scope of IFRS 3 Business Combinations and was therefore accounted for using principles of merger 
accounting as specified under UK GAAP.
  Our Performance 
Chairman’s Statement 
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Our Financials 
Notes
 1. accounting Policies continued
 Commercial Reserves
Proven and probable oil and gas reserves are estimated quantities of commercially producable hydrocarbons which the existing 
geological, geophysical and engineering data show to be recoverable in future years from known reservoirs. The proven and 
probable reserves included herein conform to the definition approved by the Petroleum Resources Management System.
 Oil and Gas exploration assets and development/Producing assets 
The Group applies the successful efforts method of accounting for oil and gas assets, having regard to the requirements of IFRS 6 
Exploration for and Evaluation of Mineral Resources. 
All licence acquisition, exploration and evaluation costs are initially capitalised as intangible fixed assets in cost centres by field or 
by exploration area, as appropriate, pending determination of commerciality of the relevant property. Directly attributable 
administration costs are capitalised insofar as they relate to specific exploration activities, as are finance costs to the extent they 
are directly attributable to financing development projects. Pre-licence costs and general exploration costs not specific to any 
particular licence or prospect are expensed as incurred.
If prospects are deemed to be impaired (‘unsuccessful’) on completion of the evaluation, the associated costs are charged to the 
income statement. If the field is determined to be commercially viable, the attributable costs are transferred to development/
production assets within property, plant and equipment in single field cost centres.
Subsequent expenditure is capitalised only where it either enhances the economic benefits of the development/producing asset or 
replaces part of the existing development/producing asset. 
Net proceeds from any disposal of an exploration asset are initially credited against the previously capitalised costs. Any surplus 
proceeds are credited to the Income Statement. Net proceeds from any disposal of development/producing assets are credited 
against the previously capitalised cost. A gain or loss on disposal of a development/producing asset is recognised in the Income 
Statement to the extent that the net proceeds exceed or are less than the appropriate portion of the net capitalised costs of  
the asset.
 Depletion and amortisation
All expenditure carried within each field is amortised from the commencement of commercial production on a unit of production 
basis, which is the ratio of oil and gas production in the period to the estimated quantities of commercial reserves at the end of  
the period plus the production in the period, generally on a field by field basis. In certain circumstances, fields within a single 
development area may be combined for depletion purposes. Costs used in the unit of production calculation comprise the net  
book value of capitalised costs plus the estimated future field development costs necessary to bring the reserves into production. 
Changes in the estimates of commercial reserves or future field development costs are dealt with prospectively.
 Impairment
At each balance sheet date, the Group reviews the carrying amount of exploration assets and development/producing assets to 
determine whether there is any indication that those assets have suffered an impairment loss. This includes exploration and 
appraisal costs capitalised which are assessed for impairment in accordance with IFRS 6. If any such indication exists, the 
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. 
Recoverable amount is the greater of net selling price less costs to sell and value in use. In assessing value in use, the estimated 
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of 
the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its 
carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment losses are recognised as an 
expense immediately.  17759	 07/05/10	 Proof	5
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48
Our Financials
notes continued
forming part of the financial statements
 1. accounting Policies continued
Impairment continued
Should an impairment loss subsequently reverse, the carrying amount of the asset is increased to the revised estimate of its 
recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been 
determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as 
income immediately.
 decommissioning 
Where a material liability for the removal of production facilities and site restoration at the end of the productive life of a field exists, 
a provision for decommissioning is recognised. The amount recognised is the present value of estimated future expenditure 
determined in accordance with local conditions and requirements. The cost of the relevant property, plant and equipment is 
increased with an amount equivalent to the provision and depreciated on a unit of production basis. Changes in estimates are 
recognised prospectively, with corresponding adjustments to the provision and the associated fixed asset. The unwinding of the 
discount on the decommissioning provision is included within finance costs. 
 Intangible assets other than Oil and Gas assets 
Intangible assets other than oil and gas assets are stated at cost less accumulated depreciation and any provision for impairment. 
These assets represent intangible computer software. Depreciation is charged so as to write off the cost, less estimated residual 
value on a straight-line basis of 20–25% per annum.
 Property, Plant and equipment other than Oil and Gas assets 
Property, plant and equipment other than oil and gas assets are stated at cost less accumulated depreciation and any provision for 
impairment. Depreciation is charged so as to write off the cost, less estimated residual value, of assets on a straight-line basis over 
their useful lives as follows: 
 
Fixtures, fittings and equipment 20–25% per annum straight-line 
Motor vehicles (including vehicles under finance leases) 20–25% per annum straight-line 
Plant and machinery 20–25% per annum straight-line 
 Inventories 
Inventories typically consist of materials and hydrocarbons, and are stated at the lower of weighted average cost and net realisable 
value. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in 
marketing, selling and distribution. 
 Revenue Recognition 
Turnover represents amounts invoiced in respect of sales of oil and gas exclusive of indirect taxes and excise duties and is 
recognised on delivery of product. Interest income is accrued on a time basis, by reference to the principal outstanding and at the 
effective rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the 
financial asset to that asset’s net carrying amount. 
 Foreign Currencies 
The Group’s consolidated accounts are presented in US Dollars. The functional and presentation currencies of some subsidiary 
companies are in currencies other than US Dollars.  Our Performance 
Chairman’s Statement 
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49
Our Financials 
Notes
 1. accounting Policies continued
 Foreign Currencies continued
The functional currency of individual companies is normally determined by the primary economic environment in which the entity 
operates, normally the one in which it primarily generates and expends cash. In preparing the financial statements of the individual 
companies, transactions in currencies other than the entity’s functional currency (“foreign currencies”) are recorded at the rates of 
exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are 
denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary assets and 
liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the 
fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not 
retranslated. Gains and losses arising on retranslation are included in net profit or loss for the period, except for exchange 
differences arising on balances which are considered long-term investments where the changes in fair value are recognised  
directly in equity. 
On consolidation, the assets and liabilities of the Group’s subsidiaries which do not use US Dollars as their functional currency are 
translated into US Dollars at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the 
average exchange rates for the period unless exchange rates fluctuate significantly. Exchange differences arising, if any, are 
classified as equity and are recognised in the Group’s foreign exchange reserve. Such translation differences are recognised as 
income or as expenses in the period in which the operation is disposed of. 
With effect from 1 January 2008 the functional currency of two of the Group’s Ukrainian subsidiaries was changed from Ukrainian 
Hryvnia to US Dollars. The change was triggered by the increasing influence of the US Dollar on the subsidiaries’ operations. The 
exchange rate used for the revaluation of the closing balance sheet at 31 December 2007 was 1UAH/$0.202.
 Pensions
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group 
in an independently administered fund. The amount charged to the income statement represents the contributions payable to the 
scheme in respect of the accounting period.
 l eases 
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of 
ownership to the lessee. All other leases are classified as operating leases. 
Assets held under finance leases are recognised as assets of the Group at their fair value or, if lower, at the present value of the 
minimum lease payments, each determined at the inception of the lease. The corresponding liability is included on the balance 
sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease 
obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged  
directly against income, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance 
with the Group’s policy on borrowing costs (see below). 
Rentals payable under operating leases are charged to the income statement on a straight-line basis over the term of the relevant 
lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over 
the lease term.
 Taxation 
The tax expense represents the sum of the tax currently payable and deferred tax. 
Current tax, including UK corporation and overseas tax, is provided at amounts expected to be paid (or recovered) using the tax 
rates and laws that have been enacted or substantially enacted by the balance sheet date.  17759	 07/05/10	 Proof	5
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Our Financials
notes continued
forming part of the financial statements
 1. accounting Policies continued
 Taxation continued
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities 
in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using 
the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred 
tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary 
differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from 
the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the 
tax profit nor the accounting profit. 
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and 
interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that 
the temporary difference will not reverse in the foreseeable future. 
The carrying amount of deferred tax assets is reviewed at each balance sheet date and adjusted to the extent that it is probable 
that sufficient taxable profits will be available to allow all or part of the asset to be recovered. 
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. 
Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in 
which case the deferred tax is also dealt with in equity. 
 dividends Payable
Accounting for dividends payable is in accordance with IAS 10 “Events after the Balance Sheet Date”. Accordingly, dividends 
proposed or declared on equity instruments after the balance sheet date are not recognised as a liability at the balance sheet date.
 Financial Instruments 
Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the 
contractual provisions of the instrument. The Group does not currently utilise derivative financial instruments.
 Trade Receivables 
Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated 
irrecoverable amounts. 
 Investments
Investments are recognised and derecognised on a trade date where a purchase or sale of investment is under a contract whose 
terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at 
cost, including transaction costs.
Investments are classified as either held-for-trading or available-for-sale, and are measured at subsequent reporting dates at fair 
value. Where securities are held for trading purposes, gains and losses arising from changes in fair value are included in net profit 
or loss for the period. For available-for-sale investments, gains and losses arising from changes in fair value are recognised directly 
in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously 
recognised in equity is included in the net profit or loss for the period. Impairment losses recognised in profit and loss for equity 
instruments classified as available-for-sale are not subsequently reversed through profit and loss.
Investments in subsidiaries are stated at cost and reviewed for impairment if there are indications that the carrying value may not  
be recoverable.
 Trade Payables 
Trade payables are not interest bearing and are stated at their nominal value.  Our Performance 
Chairman’s Statement 
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Our Financials 
Notes
 1. accounting Policies continued
 Financial Instruments continued
 Bank Borrowings and Loan Notes 
Interest-bearing bank borrowings and loan notes are recorded at the proceeds received, net of direct transaction costs. Direct 
transaction costs are accounted for on an amortised cost basis in profit and loss using the effective interest method and are  
added to/deducted from the carrying amount of the instrument to the extent that they are not settled in the period in which  
they arise.
 Equity Instruments
Equity instruments issued by the Company and the Group are recorded at the proceeds received, net of direct issue costs.
 Finance Costs and debt
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that 
necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until 
such time as the assets are substantially ready for their intended use or sale. 
Finance costs of debt are allocated to periods over the term of the related debt at the effective interest rate on the carrying  
amount. Directly attributable transaction costs are deducted from the debt proceeds on initial recognition of the liability and are 
amortised and charged to the income statement as finance costs over the term of the debt.
All other borrowing costs are expensed as incurred.
 Cash and Cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid investments that are 
readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
Included in cash and cash equivalents are amounts relating to financial guarantees entered into by the Group to collateralise future 
commitments as per standard industry practice. These cash balances include both funds held in a separate bank account and 
deposits made as security for certain third-party obligations.
 Share-Based Transactions 
The Group has applied the requirements of IFRS 2 “Share-based payments”. In accordance with the transitional provisions of that 
standard, this standard has not been applied to those awards that were granted on or before 7 November 2002. In addition, the 
standard has not been applied to awards that were granted after 7 November 2002 that vested before 1 January 2005.  
However, in contrast to the transitional provision of IFRS 2, the standard has been applied for those awards that were granted  
after 7 November 2002, and that vested between 1 January 2005 and 1 January 2006 in order to be consistent with the 
transitional rules adopted under UK GAAP in the 2006 annual report in respect of FRS 20 Share-based Payments.
All share-based awards of the Group outstanding at 31 December 2009 have been treated as equity settled as defined by IFRS 2. 
The fair value of these awards has been determined at the date of grant of the award allowing for the effect of any market-based 
performance conditions. The fair value, adjusted by the Group’s estimate of the number of awards that will eventually vest as a 
result of non-market conditions, is expensed uniformly over the vesting period.
The fair values of options under the 2004 Share Option Plan were calculated using a binomial option pricing model, whilst the fair 
values of options under the Long-Term Incentive Plan introduced during 2009 were calculated using the Black–Scholes model, 
with suitable modifications to allow for employee turnover after vesting and early exercise. The inputs to the models include: the 
share price at date of grant; exercise price; expected volatility; expected dividends; risk-free rate of interest; and patterns of  
exercise of the plan participants.
The Group has also issued warrants relating to equity raisings, the fair value of which has been treated as a cost of the equity 
raising and recognised against the share premium account. 17759	 07/05/10	 Proof	5
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52
Our Financials
notes continued
forming part of the financial statements
 1. accounting Policies continued
 Share Options
In accordance with IAS 37 “Provisions, Contingent Liabilities and Contingent Assets”, the Company provides in full for the employer’s 
national insurance liability estimated to arise on the future exercise of share options granted.
 Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom 
equal the related actual results. The estimates and assumptions that have a risk of causing material adjustment to the carrying 
amounts of assets and liabilities within the next financial year are discussed below.
 Recoverability of Intangible Oil and Gas Costs
Costs capitalised as intangible assets are assessed for impairment when circumstances suggest that the carrying value may exceed 
its recoverable value. This assessment involves judgement as to the likely commerciality of the asset, the future revenues and costs 
pertaining and the discount rate to be applied for the purposes of deriving a recoverable value.
 Decommissioning
The Group has decommissioning obligations in respect of its Ukraine asset. The full extent to which the provision is required depends 
on the legal requirements at the time of decommissioning, the costs and timing of any decommissioning works and the discount rate 
applied to such costs.
 Depreciation of Oil and Gas Assets
Oil and gas assets held in property, plant and equipment are mainly depreciated on a unit of production basis at a rate calculated by 
reference to proven and probable reserves and incorporating the estimated future cost of developing and extracting those reserves. 
Future development costs are estimated using assumptions as to the number of wells required to produce those reserves, the cost of 
the wells, future production facilities and operating costs, together with assumptions on oil and gas realisations, and are revised on an 
annual basis. The reserves estimates used are determined using estimates of oil in place, recovery factors and future oil prices.
 Share-based Payments
Management is required to make assumptions in respect of the inputs used to calculate the fair values of share-based payment 
arrangements, further details of which are provided in Note 22.
 2. Segmental Information
Following the introduction of IFRS 8, effective for accounting periods beginning on or after 1 January 2009, the Group has made the 
following considerations to arrive at the disclosures made in these financial statements.
IFRS 8 requires consideration of the Chief Operating Decision Maker (“CODM”) within the Group. In line with Group’s internal 
reporting framework and management structure, the key strategic and operating decisions are made by the Board of Directors, who 
review internal monthly management reports, budget and forecast information as part of this. Accordingly, the Board of Directors is 
deemed to be the CODM. 
The Group’s only class of business activity is oil and gas exploration, development and production. The Group’s primary operating 
segments are geographical, and are located in Ukraine, Romania and Egypt, with its head office in the United Kingdom. These 
geographical regions are the basis on which the Group reports its segment information, and are consistent with the primary 
segments reported in the prior year under IAS 14. Our Performance 
Chairman’s Statement 
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53
Our Financials 
Notes
2. Segmental Information continued
 ukraine united Kingdom Romania egypt  Total
   2009 2008 2009 2008 2009 2008 2009 2008 2009 2008
   $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Turnover
Gas sales 14,589 6,625 — — — — — — 14,589 6,625
Condensate sales 5,283 4,825 — — — — — — 5,283 4,825
Total sales (incl. sales  
to third parties) 19,872 11,450 — — — — — — 19,872 11,450
Segment result 12,612 3,037 (10,534) (12,569) (160) (2,971) (351) (1,182) 1,567 (13,685)
depreciation and 
amortisation         (3,088) (2,022)
Share-based charge         (7,618) (9,120)
Operating loss         (9,139) (24,827)
Segment assets 191,236 88,654 118,109 104,658 22,815 22,273 5,402 4,809 337,562 220,394
Capital additions 93,048 29,984 78 229 1,028 4,361 696 2,036 94,850 36,610
There are no inter-segment sales within the Group and all products are sold in the geographical region they are produced in. The 
Group’s gas sales of $14,589,000 (2008: $6,625,000) are with one single external party with which the Group has an agreement. 
Total of revenue generated from operating and interest revenue is $20,811,000 (2008: $16,951,000).
 3. l oss on Ordinary activities Before Taxation
        2009 2008
         $000 $000
l oss on ordinary activities before taxation is stated after charging/(crediting)
Auditors’ remuneration (see below)      328 289
Depreciation        2,998 1,964
Amortisation of intangible assets      90 58
Production based taxes       1,865 2,328
Cost of inventories recognised as an expense      460 457
Staff costs       15,181 17,578
        2009 2008
         $000 $000
audit services:
Fees payable to the Company’s Auditors for the audit of the Parent Company and Consolidated accounts 196 146
Fees payable to the Company’s Auditors and their associates for the audit of the Company’s 
subsidiaries pursuant to legislation      41 67
         237 213
Other services:
Other services pursuant to legislation — interim review     56 25
Other services relating to taxation      35 51
         91 76
Total audit and other services       328 289
All amounts shown as Auditors’ remuneration were payable to Deloitte LLP, except for the 2008 interim review fee which was 
payable to UHY Hacker Young LLP. 17759	 07/05/10	 Proof	5
ReGal PeTROleum PlC Annual Report and Accounts 2009
54
Our Financials
notes continued
forming part of the financial statements
 4. Other net Gains and (l osses)
        2009 2008
        $000 $000
Unrealised foreign exchange gains/(losses)      914 (23,337)
Realised foreign exchange gains/(losses)      600 (5,551)
        1,514 (28,888)
Unrealised foreign exchange gains and losses include amounts arising on the revaluation at year end of cash and cash equivalents 
held in currencies other than the functional currency of the relevant entity. The Group holds currencies to match the expected 
underlying currencies of anticipated capital and operational expenditure. 
Realised foreign exchange gains and losses arise due to the multicurrency nature of the Group’s trading activities.
 5. Remuneration of directors
        2009 2008
         $000 $000
Directors’ emoluments       2,141 2,526
The emoluments of the individual Directors were as follows:
         
   Basic  Benefits Aggregate Pension Total Total
  salary and fees Bonus in kind emoluments contributions emoluments emoluments
    2009 2009 2009 2009 2009 2009 2008
    $000 $000 $000 $000 $000 $000 $000
K Henry  156 — — 156 — 156 105
D J Greer   470 188 7 665 86 751 1,330
H Verkuil  316 112 17 445 43 488 512
R Wilde  294 108 18 420 42 462 338
Lord St John of Bletso  116 — — 116 — 116 89
A Mozetic  115 — — 115 — 115 119
A Coates  63 — — 63 — 63 21
F Scolaro  — — — — — — 12
    1,530 408 42 1,980 171 2,151 2,526
Aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares in the 
Company granted to or held by Directors.
No options to acquire ordinary shares in the Company granted to or held by Directors were exercised during the year (2008: 
500,000). 
In 2008 Frank Scolaro received $23,190 in consulting fees in recognition of additional services performed while a Director, which 
are not included in the table above. Our Performance 
Chairman’s Statement 
Chief Executives Review
17759	 07/05/10	 Proof	5
Stockcode: RPT www.regalpetroleum.co.uk
55
Our Financials 
Notes
 5. Remuneration of directors continued
According to the register of Directors’ interests, no rights to subscribe for shares in or debentures of Group companies were 
granted to any of the Directors or their immediate families, or exercised by them, during the financial year except as indicated 
below:
   Share Replacement new  exercise date from
  at start options l TIP l TIP at end price which
name of director of year surrendered grant grant of year  (£) exercisable expiry date
Keith Henry 250,000 (250,000) 100,000 41,667 141,667 0.05  31.12.2009 13.07.2014
  250,000 (250,000) 100,000  — 100,000 0.05  15.04.2010 13.07.2014
  — — — 41,667 41,667 0.05  31.03.2011 13.07.2014
  250,000 (250,000) 100,000 — 100,000 0.05  15.04.2011 13.07.2014
  — — — 41,667 41,667 0.05  31.03.2012 13.07.2014
david Greer 1,000,000 (1,000,000) 400,000 250,000 650,000 0.05  31.12.2009 13.07.2014
  500,000 (500,000) 150,000 — 150,000  0.05  31.12.2009 13.07.2014
  1,000,000 (1,000,000) 400,000 — 400,000 0.05  — 13.07.2014
  — — — 250,000 250,000 0.05  31.03.2011 13.07.2014
  — — — 250,000 250,000 0.05  31.03.2012 13.07.2014
Harry Verkuil 500,000 (500,000) 200,000 109,375 309,375 0.05  31.12.2009 13.07.2014
  500,000 (500,000) 150,000 — 150,000 0.05  31.12.2009 13.07.2014
  500,000 (500,000) 165,000 — 165,000 0.05  — 13.07.2014
  — — — 109,375 109,375 0.05  31.03.2011 13.07.2014
  — — — 109,375 109,375 0.05  31.03.2012 13.07.2014
Robert Wilde 500,000 (500,000) 200,000 109,375 309,375 0.05  31.12.2009 13.07.2014
  500,000 (500,000) 165,000 — 165,000 0.05  — 13.07.2014
  — — — 109,375 109,375 0.05  31.03.2011 13.07.2014
  500,000 (500,000) 150,000 — 150,000 0.05  01.05.2011 13.07.2014
  — — — 109,375 109,375 0.05  31.03.2012 13.07.2014
adrian Coates 83,334 (83,334) 30,000 16,667 46,667 0.05  31.12.2009 13.07.2014
  83,333 (83,333) 30,000 — 30,000 0.05  18.07.2010 13.07.2014
  — — — 16,667 16,667 0.05  31.03.2011 13.07.2014
  83,333 (83,333) 30,000 — 30,000 0.05  18.07.2011 13.07.2014
  — — — 16,667 16,667 0.05  31.03.2012 13.07.2014
antonio mozetic  350,000 — — — 350,000 1.50  04.02.2009 04.02.2018
l ord St John 250,000 — — — 250,000 0.875  24.10.2006 23.04.2015
of Bletso 250,000 — — — 250,000 1.50  04.02.2009 07.07.2018
During the year, a new Long-Term Incentive Plan (LTIP) scheme was introduced. As part of this arrangement the terms of the 
previous share option scheme were modified, resulting in the affected share options being surrendered and replaced by new 
options issued under the LTIP scheme.
Options granted under the new LTIP scheme are subject to specific performance criteria. The criteria ranges include continuing 
employment with the Company and specific operational targets being met. For more information on the new LTIP scheme see  
Note 22.
Remaining options granted under the 2004 Share Option Scheme have already vested. 17759	 07/05/10	 Proof	5
ReGal PeTROleum PlC Annual Report and Accounts 2009
56
 6. Staff numbers and Costs
The average number of employees on a full-time equivalent basis during the year (including Executive Directors) was as follows:
  number of 
  employees
         2009 2008
Group
Management/operational       116 93
Administrative support       43 36
        159 129
The aggregate staff costs of these employees was as follows:
        2009 2008
         $000 $000
Wages and salaries       5,706 6,809
Social security costs       964 897
Pension costs       893 752
Share option charge (see Note 22)       7,618 9,120
         15,181 17,578
In addition to the defined contribution pension scheme in the United Kingdom, the Group contributes to a local government pension 
scheme within Ukraine. The Group has no further payment obligations towards the local government pension scheme once the 
contributions have been paid.
 7. Finance Costs
        2009 2008
        $000 $000
Interest on bank loans       — 87
Interest on obligations under finance leases      47 33
Finance and arrangement fees       — 405
Unwinding of discount on decommissioning provision     97 —
         144 525
Our Financials
notes continued
forming part of the financial statements Our Performance 
Chairman’s Statement 
Chief Executives Review
17759	 07/05/10	 Proof	5
Stockcode: RPT www.regalpetroleum.co.uk
57
Our Financials 
Notes
 8. Taxation
Analysis of charge in period:       2009 2008
         $000 $000
Current tax
Overseas — current year       190 214
deferred tax
UK — current year       3,505 1,860
UK — prior year       (706) —
Tax on profit on ordinary activities      2,989 2,074
 
The tax charge for the period is higher than the standard rate of corporation tax in the UK of 28% (2008: 28.5% blended). The 
charge for the period can be reconciled to the loss as per the income statement as follows:
        2009  2008 
         $000 $000
Current tax reconciliation
Loss on ordinary activities before tax      (6,830) (48,739)
Current tax credit at 28% (2008: 28.5%)      (1,912) (13,891)
effects of:
Tax effect of the application of overseas tax rates     107 753
Tax effect of expenses/(income) not deductible/(assessable) in determining taxable profit/(loss)  3,598 4,497
Tax effect of losses not recognised      1,902 10,715
Tax effect of prior year adjustments      (706) —
Tax charge for the year       2,989 2,074
 Factors affecting Future Tax Charge 
The Directors do not consider it appropriate to recognise any deferred tax asset to reflect the potential benefit arising from  
temporary differences at 31 December 2009 as there is insufficient evidence of future taxable profits. 
At 31 December 2009, and in gross terms, the Group are not recognising deferred tax assets in relation to carried forward tax 
relief of approximately $154 million (2008: $150 million). The majority of this amount (approximately $135 million) relates to UK 
tax losses which can be carried forward indefinitely. 
 9. l oss for the Financial year
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not  
presented its own income statement in these financial statements. The Group loss for the period includes a Parent Company loss 
after tax of $13,194,000 for the year ended 31 December 2009 (2008: $39,881,000). 17759	 07/05/10	 Proof	5
ReGal PeTROleum PlC Annual Report and Accounts 2009
58
 10. l oss per Share
Basic loss per share of 3.7 cents (2008: 25.6 cents) is based upon losses of $9,819,000 (2008: $50,813,000) and 264,073,061 
(2008: 198,378,455) ordinary shares being the weighted average number of shares. As the exercise of options would be anti-
dilutive they have been excluded from the computation of diluted loss per share in both periods.
 11. Intangible Fixed assets
 2009 2008
   exploration assets Computer  Exploration assets Computer
   Romania egypt software Total Romania Egypt software Total
   $000 $000 $000 $000 $000 $000 $000 $000
Group
Cost
At beginning of year 21,187 4,794 447 26,428 22,245 3,654 263 26,162
Additions 1,028 696 37 1,761 4,360 2,027 184 6,571
Exploration costs written off — (95) — (95) (2,580) (887) — (3,467)
Effect of movement in  
foreign exchange (709) — — (709) (2,838) — — (2,838)
At end of year 21,506 5,395 484 27,385 21,187 4,794 447 26,428
amortisation
At beginning of year — —  228 228 — — 170 170
Charge for year — — 90 90 — — 58 58
At end of year — — 318 318 — —  228 228
net book value
at 31 december 21,506 5,395 166 27,067 21,187 4,794 219 26,200
        2009  2008
        Computer  Computer
        software software
        $000 $000
Company
Cost
At beginning of year       385 222
Additions       22 163
At end of year       407 385
amortisation
At beginning of year       184 136
Charge for year       72 48
At end of year       256 184
net book value
at 31 december        151 201
Our Financials
notes continued
forming part of the financial statements Our Performance 
Chairman’s Statement 
Chief Executives Review
17759	 07/05/10	 Proof	5
Stockcode: RPT www.regalpetroleum.co.uk
59
Our Financials 
Notes
 12. Property, Plant and equipment
 2009  2008
     exploration    Exploration
    and    and
   development    Development
    costs Other fixed  costs Other fixed
    ukraine assets* Total Ukraine assets* Total
     $000 $000 $000 $000 $000 $000
Group
Cost 
At beginning of year   66,495 1,713 68,208 36,872 1,441 38,313
Additions   92,966 123 93,089 29,661 378 30,039
Disposals   — (351) (351) — — —
Effect of movement in foreign exchange  (3) (11) (14) (38) (106) (144)
At end of year   159,458 1,474 160,932 66,495 1,713 68,208
depreciation
At beginning of year   5,609 1,011 6,620 3,871 881 4,752
Charge for year   2,787 211 2,998 1,738 226 1,964
On disposals   — (168) (168) — — —
Effect of movement in foreign exchange  — (10) (10) — (96) (96)
At end of year   8,396 1,044 9,440 5,609 1,011 6,620
net book value
at 31 december   151,062 430 151,492  60,886  702  61,588
 * Other fixed assets include fixtures, fittings and equipment, motor vehicles and plant and machinery.
        2009   2008 
          Other fixed  Other fixed
        assets  assets
         $000 $000
Company
Cost 
At beginning of year       936 870
Additions       56 66
Disposals       (351) —
At end of year       641 936
depreciation
At beginning of year       657 515
Charge for year       71 142
On disposals       (168) —
At end of year       560 657
net book value
at 31 december        81 279 17759	 07/05/10	 Proof	5
ReGal PeTROleum PlC Annual Report and Accounts 2009
60
 13. Fixed asset Investments
       Shares in  l oans to
       subsidiary  subsidiary
       undertakings undertakings Total
        $000  $000  $000
Company
Cost 
At 1 January 2008      17,279 31,644 48,923
Additions      — 61,191 61,191
At 31 December 2008      17,279 92,835 110,114
Cost 
At 1 January 2009      17,279 92,835 110,114
Additions      — 82,492 82,492
at 31 december 2009      17,279 175,327 192,606
 Principal subsidiary undertakings 
At 31 December 2009, the Company’s principal subsidiary undertakings, all of which are included in the consolidated financial 
statements, were:
   Country of Country of  % of shares
   incorporation operation Principal activity  held
Regal Petroleum (Jersey) Limited Jersey Ukraine Holding Company 100%
Regal Petroleum Corporation Limited Jersey Ukraine Oil & Natural Gas Extraction 100%
Regal Petroleum Ukraine Limited Ukraine Ukraine Oil & Natural Gas Extraction 100%
Regal Petroleum Corporation 
(Ukraine) Limited  Ukraine Ukraine Service Company 100%
Regal Romania SRL  Romania Romania Oil & Natural Gas Exploration 100%
Regal Egypt Limited  United Kingdom Egypt Oil & Natural Gas Exploration 100%
Regal Group Services Limited  United Kingdom United Kingdom Service Company 100%
The Parent Company holds indirect interests of 100% of the share capital of Regal Petroleum Corporation Limited, Regal  
Petroleum Ukraine Limited and Regal Petroleum Corporation (Ukraine) Limited with all other companies owned directly by the  
Parent Company. Regal Petroleum Corporation Limited and Regal Petroleum Ukraine Limited are controlled through their 100% 
ownership by Regal Petroleum (Jersey) Limited. Regal Petroleum Corporation (Ukraine) Limited is controlled by its 100%  
ownership by Regal Petroleum (Jersey) Limited and Regal Group Services Limited.
 14. Inventories
  Group
         2009 2008
         $000 $000
Materials       20,024 18,832
Condensate stock       42 189
        20,066 19,021
In the opinion of the Directors, there is no material difference between the cost of inventories included in the accounts and its 
replacement cost.
Our Financials
notes continued
forming part of the financial statements Our Performance 
Chairman’s Statement 
Chief Executives Review
17759	 07/05/10	 Proof	5
Stockcode: RPT www.regalpetroleum.co.uk
61
Our Financials 
Notes
 15. Trade and Other Receivables
 Group Company
       2009 2008 2009 2008
       $000 $000 $000 $000
Trade receivables     18 1 — —
Amounts owed by Group undertakings    — — 38 332
Prepayments and accrued income    1,867 1,730 417 580
Purchase tax receivable     14,505 5,428 152 252
Other receivables     362 348 279 101
       16,752 7,507 886 1,265
None of the Group’s trade receivables are past due or impaired. All trade receivables are considered to be of high credit quality. 
Purchase tax receivable in respect of the Group includes $13,176,000 (2008: $4,272,000) relating to capital expenditure in  
Ukraine which is expected to be recovered via an offset against purchase tax payable on future sales in that country. There is an 
additional $3,593,000 (2008: $nil) which is included within non-current trade and other receivables as, based on the Group’s  
future sales projections, it is not expected to be recoverable within one year. The Directors are satisfied that all such amounts are 
fully recoverable.
 16. Cash and Cash equivalents
 Group Company
       2009 2008 2009 2008
       $000 $000 $000 $000
Cash at bank and on hand     1,862 1,861 102 97
Short-term deposits on hand     98,643 73,799 98,626 73,696
Restricted cash     18,087 30,418 18,087 29,221
       118,592 106,078 116,815 103,014
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods  
of between one day and three months, depending on the immediate cash requirements of the Group and earn interest at the 
respective short-term deposit rates. The fair value of cash and cash equivalents is $118,592,000 (2008: $106,078,000). The 
Group only deposits cash surpluses with major banks of high quality credit standing. 
Restricted cash is held on fixed term deposits in support of Letters of Credit which are required under contractual agreements 
relating to the Group’s investment strategy in Ukraine.
 17. Trade and Other Payables
 Group Company
       2009 2008 2009 2008
       $000 $000 $000 $000
Trade payables     7,543 2,669 183 862
Taxation and social security     294 603 — —
Accruals and deferred income     15,652 5,766 852 388
       23,489 9,038 1,035 1,250
The Directors consider that the carrying amount of trade payables approximates to their fair value. 17759	 07/05/10	 Proof	5
ReGal PeTROleum PlC Annual Report and Accounts 2009
62
 18. Borrowings
On 13 September 2007 the Group entered into an agreement with Bank of Scotland for a US Dollar revolving credit facility of up  
to $15 million for a term of one year. Amounts drawn incurred interest at LIBOR plus an applicable margin and the facility was 
secured via a charge over the Group’s shares. During 2008, the total amount outstanding on this facility of $10.5 million was  
repaid from 2008 share placement proceeds and the facility cancelled in full in April 2008. Interest paid on this facility was not 
capitalised as the facility was used to fund operational cash flows.
19. Obligations under Finance l eases
  Group 
         2009 2008
         $000 $000
Amounts payable under finance leases:
Within one year       89 97
In the second to fifth years inclusive      63 244
         152 341
Less future finance, service and insurance charges     (56) (195)
Present value of lease obligations      96 146
Amount due for settlement within 12 months (shown under current liabilities)   55 45
Amount due for settlement after 12 months      41 101
The finance leases relate to motor vehicles in Ukraine. The average lease term is three years. For the year ended 31 December 
2009, the average effective borrowing rate was 14.67% (2008: 14.67%). Interest rates are fixed at the contract date. All leases  
are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. All lease obligations  
are denominated in Ukrainian Hryvnia and translated to US Dollars. The Group’s obligations under finance leases are secured  
by the lessor’s charge over the leased assets. At 31 December 2009, the carrying value of these assets was $148,000 (2008: 
$214,000).
The Directors consider that the fair value of the Group’s lease obligations approximates their carrying amount.
Our Financials
notes continued
forming part of the financial statements Our Performance 
Chairman’s Statement 
Chief Executives Review
17759	 07/05/10	 Proof	5
Stockcode: RPT www.regalpetroleum.co.uk
63
Our Financials 
Notes
 20. Provisions for l iabilities and Charges
       Provision for
     decommissioning Other Total
        $000 $000  $000
Group
At beginning of year       2,274 84 2,358
Amounts provided      1,361 62 1,423
Unwinding of discount      97 — 97
at end of year      3,732 146 3,878
The provision for decommissioning is based on the net present value of the Group’s estimated liability for the removal of the 
Ukraine production facilities and site restoration at the end of the production life. These costs are expected to be incurred between 
2011 and 2024.
 21. deferred Tax
  Group
         2009 2008
         $000 $000
At beginning of year       3,093 1,233
Charged to income statement — current year      3,505 1,860
Credited to income statement — prior year      (706) —
at end of year       5,892 3,093
This deferred tax liability arises as a result of temporary differences between the carrying values and tax bases of oil and gas assets 
in Ukraine. 17759	 07/05/10	 Proof	5
ReGal PeTROleum PlC Annual Report and Accounts 2009
64
 22. Called up Share Capital
  2009  2008
      number $000 Number $000
authorised
Ordinary shares of 5p each (approximately 7 cents each)   600,000,000 41,394 300,000,000 17,905
allotted, called up and fully paid
Opening balance at 1 January     211,645,664 19,094 143,028,824 12,378
Issued during the year:
— Exercise of share options     — — 3,800,000 377
— Share issue     104,000,000 8,616 64,816,840 6,339
Closing balance at 31 December    315,645,664 27,710 211,645,664 19,094
There are no restrictions over ordinary shares issued.
During the year the Company increased its authorised share capital to £30,000,000 via the creation of an additional 300,000,000 
ordinary shares of 5 pence each, ranking pari passu in all respects with the existing ordinary shares of the Company.
 Share Option Schemes
 Long Term Incentive Plan (LTIP)
During the year the Company introduced an LTIP scheme for certain Directors and senior employees of the Group. As part of  
these arrangements, the terms of the previous share option scheme were modified. This resulted in a total of 9,490,000 share 
options (the “Options”), of which 3,365,000 had already vested, being surrendered in exchange for options over 3,436,000  
ordinary shares of 5 pence each under the LTIP (the basis of the exchange having been determined, inter alia, using an indicative 
Binomial Option pricing analysis of the value of the holder’s existing Options). The LTIP awards are time and performance based,  
vest in three tranches on 31 December 2009, 31 March 2011 and 31 March 2012 and are in the form of a right to acquire  
Ordinary Shares at their nominal value, being a price of 5 pence per Ordinary Share. The performance conditions are non-market 
based, being linked to certain pre-defined operational milestones.
 Share Option Scheme
The 2004 Share Option Scheme is still in operation, but only applies to certain Non-Executive Directors and one external party 
granted the right to subscribe for shares in the Company. For the Non-Executive Directors, the remaining options granted under  
the 2004 Share Option Scheme have vested.
For both schemes, options are normally forfeited if the employee leaves the Group before the options vest.
The following table illustrates the number and weighted average exercise price (WAEP) of, and movements in, all share options 
during the year.
       2009  2008
      2009 Wae P 2008 WAEP
      number £ number £
Outstanding at beginning of year    11,736,600 1.796  4,175,000 1.000
Surrendered during the year     (9,940,000) (1.866) — —
Replacement options granted     3,328,500 0.050 — —
New options granted during the year    2,963,129 0.050  11,386,600 1.801
Exercised during the year     — — (3,800,000) (0.937)
Expired at end of year     (138,000) (1.101) (25,000) (1.480)
Outstanding at end of year     7,950,229 0.340 11,736,600 1.796
Exercisable at end of year     4,417,812 0.571 2,211,600 1.976
Our Financials
notes continued
forming part of the financial statements Our Performance 
Chairman’s Statement 
Chief Executives Review
17759	 07/05/10	 Proof	5
Stockcode: RPT www.regalpetroleum.co.uk
65
Our Financials 
Notes
 22. Called up Share Capital continued
The principal inputs to the options valuation model were:
2009
Exercise price range  5p to 150p
Remaining contractual life  1 to 3 years
Weighted average share price  68.6p
Risk free interest rate  0.59%–2.25% p.a.
Expected volatility  83%–117% p.a.
Dividend yield  0% p.a.
Employee turnover  From 0% to 10% p.a. depending on seniority
Early exercise  At rates dependent upon seniority and potential gain from exercise
 
2008
Exercise price range  87.5p to 360p
Remaining contractual life  1 to 10 years
Weighted average share price  93.7p
Risk free interest rate  4.5%–5.5% p.a.
Expected volatility  60%–150% p.a.
Dividend yield  0% p.a.
Employee turnover  From 0% to 10% p.a. depending on seniority
Early exercise  At rates dependent upon seniority and potential gain from exercise
 
Expected volatility has been determined by reference to the historic annualised volatility of the Company’s share return.
The fair values and expected lives of the options valued in accordance with IFRS 2 were:
          Weighted
          average
        Weighted expected
        average life from 
        fair value grant date
        £ years
2007       0.456 1.09
2008       1.069 1.83
2009       0.795 1.58
The Company recognised a total charge of $7,618,000 (2008: $9,753,000) in respect of cash and equity settled share-based 
awards. This includes an additional charge of $nil (2008: $633,000) which was recognised within the share premium account to 
reflect the fair value of warrants granted in relation to a share placing that took place during the year ended 31 December 2008.  
An amount of $602,000 (2008: $3,023,000) was transferred between the equity share option reserve and the profit and loss 
account upon the exercise or lapse or certain awards (see Note 23). 17759	 07/05/10	 Proof	5
ReGal PeTROleum PlC Annual Report and Accounts 2009
66
 23. Share Premium and Reserves
    Equity
   Share share   Foreign 
  Share premium option Merger Capital exchange Retained
  capital account reserve reserve contributions reserve earnings Total
Group $000 $000 $000 $000 $000 $000 $000 $000
At 1 January 2008 12,378 265,899 3,845 (3,204) 7,477 4,563 (245,303) 45,655
Retained loss 
for the year — — — — — — (50,813) (50,813) 
Current year 
IFRS 2 charge — — 9,753 — — — — 9,753
Issued shares 6,716 206,390 — — — — — 213,106
Share issue costs — (10,040) — — — — — (10,040)
Exchange differences  — — — — — (2,028) — (2,028)
Transfer for options 
exercised or expired — — (3,023) — — — 3,023 —
At 31 December 2008 19,094 462,249 10,575 (3,204) 7,477 2,535 (293,093) 205,633
    equity
   Share share   Foreign 
  Share premium option merger Capital exchange Retained
  capital account reserve reserve contributions reserve earnings Total
  $000 $000 $000 $000 $000 $000 $000 $000
At 1 January 2009 19,094 462,249 10,575 (3,204) 7,477 2,535 (293,093) 205,633
Retained loss 
for the year — — — — — — (9,819) (9,819)
Current year 
IFRS 2 charge — — 7,618 — — — — 7,618
Issued shares 8,616 96,494 — — — — — 105,110
Share issue costs — (3,653) — — — — — (3,653)
Exchange differences  — — — — — (627) — (627)
Transfer for options 
exercised or expired — — (602) — — — 602 —
at 31 december  
2009 27,710 555,090 17,591 (3,204) 7,477 1,908 (302,310) 304,262
 equity share option reserve
The balance held in the equity share option reserve relates to the fair value of the share options that have been expensed  
through the profit and loss account less any amounts that have been transferred to the profit and loss account reserve upon  
exercise or expiry.
Our Financials
notes continued
forming part of the financial statements Our Performance 
Chairman’s Statement 
Chief Executives Review
17759	 07/05/10	 Proof	5
Stockcode: RPT www.regalpetroleum.co.uk
67
Our Financials 
Notes
 23. Share Premium and Reserves continued
 Capital contributions reserve 
The capital contributions reserve is non-distributable and represents the value of equity invested in subsidiary entities prior to the 
Company listing.
 merger reserve
The merger reserve represents the difference between the nominal value of shares acquired by the Company and those issued to 
acquire subsidiary undertakings. This balance relates wholly to the acquisition of Regal Petroleum (Jersey) Limited and that 
company’s acquisition of Regal Petroleum Corporation Limited during 2002.
 Foreign exchange reserve
Exchange reserve movement for the year attributable to currency fluctuations.
       Equity
      Share share
     Share premium option Retained
     capital account reserve earnings Total
Company    $000 $000 $000 $000 $000
At 1 January 2008    12,378 265,899 3,845 (241,358) 40,764
Retained loss for the year    — — — (39,881) (39,881) 
Current year IFRS 2 charge    — — 9,753 — 9,753
Issued shares    6,716 206,390 — — 213,106
Share issue costs    — (10,040) — — (10,040)
Transfer for options exercised or expired   — — (3,023) 3,023 —
Other    — — — (79) (79)
 At 31 December 2008    19,094 462,249 10,575 (278,295) 213,623
       equity
      Share share 
     Share premium option Retained
     capital account reserve earnings Total
     $000 $000 $000 $000 $000
At 1 January 2009    19,094 462,249 10,575 (278,295) 213,623
Retained loss for the year    — — — (13,194) (13,194)
Current year IFRS 2 charge    — — 7,618 — 7,618
Issued shares    8,616 96,494 — — 105,110
Share issue costs    — (3,653) — — (3,653)
Transfer for options exercised or expired   — — (602) 602 —
 at 31 december 2009    27,710 555,090 17,591 (290,887) 309,504 17759	 07/05/10	 Proof	5
ReGal PeTROleum PlC Annual Report and Accounts 2009
68
 24. Operating l ease arrangements
 The Group as lessee
 Group Company
       2009 2008 2009 2008
       $000 $000 $000 $000
Minimum lease payments under operating leases recognised 
as an expense for the year     611 304 459 304
 
Leases on office property are negotiated for an average of five years and rentals are fixed for an average of five years.
At the balance sheet date the Group had outstanding commitments for future minimum lease payments under non-cancellable 
operating leases which fall due as follows:
        2009 2008
         l and and Land and
         buildings buildings
Group and Company       $000 $000
Amounts payable due:
— Within one year       464 327
— In the second to fifth years inclusive      1,045 1,585
        1,509 1,912
 25. Reconciliation of Operating l oss to Operating Cash Flow
        2009 2008
Group       $000 $000
Operating loss       (9,139) (24,827)
Depreciation, amortisation and impairment charges     3,088 2,022
Movement in provisions       61 (1,249)
Share option charge       7,618 9,120
Exploration costs written off       95 3,467
(Increase)/decrease in stock       (100) 73
Decrease/(increase) in debtors       3,802 (233)
Increase/(decrease) in creditors      1,726 (1,532)
Cash from/(used in) operations      7,151 (13,159)
        2009 2008
Company       $000 $000
Operating loss       (18,274) (21,851)
Depreciation, amortisation and impairment charges     327 190
Share option charge       7,618 9,120
Write off of borrowing costs       — 375
Movement in provisions       (29) (1,171)
Increase in debtors       (38) (120)
Increase/(decrease) in creditors      488 (1,138)
Cash used in operations       (9,908) (14,595)
Our Financials
notes continued
forming part of the financial statements Our Performance 
Chairman’s Statement 
Chief Executives Review
17759	 07/05/10	 Proof	5
Stockcode: RPT www.regalpetroleum.co.uk
69
Our Financials 
Notes
 26. Financial Instruments
 Capital Risk management
The Group manages its capital to ensure that it is able to continue as a going concern whilst maximising the return to stakeholders. 
The Company’s overall strategy remains unchanged from 2008.
The capital structure of the Group consists of equity attributable to the equity holders of the parent, comprising issued share capital, 
share premium, reserves and retained earnings as disclosed in Note 23.
There are no capital requirements imposed on the Group.
The Group’s financial instruments comprise cash and cash equivalents and various items such as debtors and creditors that arise 
directly from its operations. The Group has bank accounts denominated in British Pounds, Egyptian Pounds, US Dollars, Euros, 
Ukraine Hryvnia and Romanian Lei. As at 31 December 2009 the Group does not have any long-term borrowings (2008: $nil).  
The main future risks arising from the Group’s financial instruments are currently currency risk, interest rate risk and liquidity risk.
The Group’s financial assets and financial liabilities comprise the following:
        2009 2008
Financial assets       $000 $000
Cash and cash equivalents       118,592 106,078
Trade and other receivables       178 348
         118,770 106,426
 
        2009 2008
Financial l iabilities       $000 $000
Trade and other payables       7,326 2,352
Accruals       15,130 5,424
         22,456 7,776
 
 Currency Risk
The functional currency of the majority of entities in the Group is US Dollars. The following analysis of net monetary assets and 
liabilities shows the Group’s currency exposures. Exposures comprise the monetary assets and liabilities of the Group that are not 
denominated in the functional currency of the relevant entity.
        2009 2008
Currency       $000 $000
British Pounds       28,121 31,191
Euros       29,989 64,131
Ukraine Hryvnia       8,230 4,104
Romanian Lei       1,452 109
         67,792 99,535
Further disclosure regarding foreign currency risk management including how potential exposures are managed is discussed under 
the section titled Operating Environment, Principal Risks and Uncertainties. 17759	 07/05/10	 Proof	5
ReGal PeTROleum PlC Annual Report and Accounts 2009
70
 26. Financial Instruments continued
 Foreign Currency Sensitivity analysis
The Group is mainly exposed to the currency of the European Union (Euro), the currency of the United Kingdom (Sterling), and the 
currency of Ukraine (Hryvnia).
The following table details the Group’s sensitivity to a 10 per cent increase and decrease in the US Dollar against the stated 
currencies. 10 per cent is the sensitivity rate used when reporting foreign currency risk internally to key management personnel  
and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis 
comprises money market deposits held at the balance sheet date. A positive number below indicates an increase in profit and  
other equity where the US Dollar weakens 10 per cent against the relevant currency. For a 10 per cent strengthening of the US 
Dollar against the relevant currency, there would be an equal and opposite impact on the profit and other equity, and the balances 
below would be negative.
 euro currency  Sterling currency Hryvnia currency
 change change change
     2009 2008 2009 2008 2009 2008
Currency    $000 $000 $000 $000 $000 $000
Profit/(loss)
— 10 per cent strengthening of USD  (3,040)  (4,984) (2,976)  (3,227) (42) (47)
— 10 per cent weakening of USD   3,040 4,984 2,976 3,227 42 47
Other equity
— 10 per cent strengthening of USD  (3,040) (4,984) (2,976)  (3,227) (42) (47)
— 10 per cent weakening of USD   3,040 4,984 2,976 3,227 42 47
 
 Interest Rate Risk management
The Group is not exposed to interest rate risk on financial liabilities as none of the entities in the Group have any external  
borrowings. The Group does not use interest rate forward contracts and interest rate swap contracts as part of its strategy.
The Group is exposed to interest rate risk on financial assets as entities in the Group hold money market deposits at floating  
interest rates. The risk is managed by fixing interest rates for a period of time when indications exist that interest rates may move 
adversely.
The Group’s exposure to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management  
section below.
 Interest Rate Sensitivity analysis
The sensitivity analysis below has been determined based on exposure to interest rates for non-derivative instruments at the  
balance sheet date. A 0.5 per cent increase or decrease is used when reporting interest rate risk internally to key management 
personnel and represents management’s assessment of a reasonably possible change in interest rates.
If interest rates earned on money market deposits had been 0.5 per cent higher/lower and all other variables were held constant,  
the Group’s:
■ loss for the year ended 31 December 2009 would decrease by $525,000 in the event of 0.5% higher interest rates and increase 
by $516,000 in the event of 0.5% lower interest rates (2008: decrease and increase by $591,000). This is mainly attributable to 
the Group’s exposure to interest rates on its money market deposits; and
■ other equity reserves would not be affected (2008: not affected).
Interest payable on the Group’s liabilities would have an immaterial effect on the loss for the year.
Our Financials
notes continued
forming part of the financial statements Our Performance 
Chairman’s Statement 
Chief Executives Review
17759	 07/05/10	 Proof	5
Stockcode: RPT www.regalpetroleum.co.uk
71
Our Financials 
Notes
 26. Financial Instruments continued
 l iquidity Risk
The Group’s objective throughout the year has been to ensure continuity of funding. Operations to date have primarily been 
financed through capital contributions, facility drawdowns, the issue of share capital prior to January 2006, February and June 
2008 and July 2009, revenue from Ukraine operations and proceeds received as a result of the joint venture in Egypt from which 
75% of back costs were reimbursed.
Details of the Group’s cash management are explained in Note 16.
Liquidity, credit and cash flow risk for the Group are further detailed under the section titled Operating Environment, Principal Risks 
and Uncertainties and, in respect of liquidity risk, the Going Concern section of the Directors’ Report.
 Interest Rate Risk Profile of Financial assets
The Group had the following cash and cash equivalent balances which are included in financial assets as at 31 December 2009 
with an exposure to interest rate risk:
 2009 2008
     Floating  Fixed  Floating Fixed
     rate  rate  rate rate
     financial  financial  financial financial
    Total assets assets Total assets assets
Currency   $000 $000 $000 $000 $000 $000
British Pounds   29,765 29,765 — 32,342 32,342 —
US Dollars   57,996 57,996 — 7,847 7,847 —
Euros   30,399 30,399 — 64,857 64,857 —
Ukraine Hryvnia   416 416 — 923 923 —
Romanian Lei   16 16 — 109 109 —
Total   118,592 118,592 — 106,078  106,078 —
Cash deposits included in the above balances comprise deposits placed in money market funds.
 Interest Rate Risk Profile of Financial l iabilities
The Group had no interest-bearing financial liabilities at year end (2008: $nil). 
All the Group’s creditors falling due within one year are excluded because they are not interest bearing. 
 maturity of Financial l iabilities
The maturity profile of the Group’s financial liabilities, on an undiscounted basis, is as follows:
        2009 2008
         $000 $000
In one year or less       22,456 7,776
Within two to five years       — —
In more than five years       — —
Total       22,456 7,776 17759	 07/05/10	 Proof	5
ReGal PeTROleum PlC Annual Report and Accounts 2009
72
 26. Financial Instruments continued
 Borrowing Facilities
The Group did not have any borrowing facilities available to it at year end. The Group’s borrowing facility was closed when all drawn 
amounts were repaid in April 2008.
 Fair Value of Financial assets and l iabilities
The fair value of all financial instruments is not materially different from the book value.
 Commodity Price Risk
Risks relating to the fluctuation in the natural gas price are discussed under the section titled Operating Environment, Principal  
Risks and Uncertainties.
 27. Capital Commitments 
Amounts contracted in relation to the Ukraine field development but not provided for in the financial statements at 31 December 
2009 were $699,000 (2008: $2,090,000). In addition, the Company has entered into five year contracts with Saipem SpA for the 
provision of two drilling rigs. The contracts for these rigs have a break clause after two years which, if exercised, results in a total 
minimum commitment through to early 2011 of $59,220,000 (2008: $103,554,000). However, the Company has the legal right  
to subcontract these rigs which may partially or wholly mitigate any exposure.
 28. Related Party disclosures
Key management personnel of the Group are considered to comprise only the Directors. Details of Directors’ remuneration are 
disclosed in Note 5. 
 29. Post Balance Sheet events
There were no events after the balance sheet date which require adjustment to or disclosure in these financial statements. 
Our Financials
notes continued
forming part of the financial statements 17759	 07/05/10	 Proof	5 17759	 07/05/10	 Proof	5
 
Regal Petroleum plc
Glossary
 Company Secretary and Registered Office
	C 	 Phillips
Lansdowne House
57 Berkeley Square
London W1J 6ER
United Kingdom
 Auditors
	Deloitte 	 LLP
2 New Street Square
London EC4A 3BZ
United Kingdom
 Bankers
	Bank 	 of	 Scotland	 Corporate
London Chief Office
155 Bishopsgate
London EC2M 3YB
United Kingdom
 Solicitors
	Pinsent 	 Masons	 LLP
City Point
1 Ropemaker Street
London EC2Y 9AH
United Kingdom
 Nominated Advisor
	Strand 	 Hanson	 Limited
26 Mount Row
London W1K 3SQ
United Kingdom
 
 Joint Broker
	Merrill 	 Lynch	 International
Merrill Lynch Financial Centre
2 King Edward Street
London EC1A 1HQ
United Kingdom
 Joint Broker
	RBS 	 Hoare	 Govett
250 Bishopsgate
London EC2M 4AA
United Kingdom
 Joint Broker
	Mirabaud 	 Securities	 LLP
21 St James’s Square
London SW1Y 4JP
United Kingdom
 Share Registry
	Computershare 	 Investors	 Services	 PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZY
United Kingdom
 PR Advisors
	Citigate 	 Dewe	 Rogerson
3 London Wall Buildings
London EC2M 5SY
United Kingdom
 km
kilometres
 km
2
square kilometres
 m
3
/d
cubic metres per day
 Mm
3
thousand cubic metres
 Mm
3
/d
thousand cubic metres per day
 MMcf/d
million cubic feet per day
 bbl
barrel
 boepd
barrels of oil equivalent per day
 MMboe
million barrels of oil equivalent
 $
United States Dollar
 hp
horsepower
Advisors 17759	 07/05/10	 Proof	5 17759	 07/05/10	 Proof	5
         Annual Report and Accounts 2009 Lansdowne House
57 Berkeley Square
London  W1J 6ER
United Kingdom
T: +44 (0)20 7408 9500
F: +44 (0)20 7408 9501
www.regalpetroleum.co.uk
Regal Petroleum plc Annual Report and Accounts 2009