Regal Petroleum Approached Regarding Potential Asset Transaction

According to a press-release, Regal Petroleum (RPT LN: N/R) announced that it has received preliminary approaches regarding possible transactions in relation to the company’s Ukrainian assets. Vladimir Nesterenko: This is the second bid for Regal’s assets in less than half a year, after the failure of a USD 410 mln deal with Shell in November 2007. This time it could be JKX Oil & Gas (JKX LN: N/R), another London-listed oil & gas junior, with key assets in Ukraine, and the largest independent producer in the country; Marathon, who has been recently active in its search for gas production opportunities in Ukraine; local oligarchs like Kolomoiskiy (Privat Group) and Firtash (DF Group). We also admit that Shell could have again approached Regal, despite failure to reach the agreement last year. Regarding JKX, we don’t believe it can afford buying Regal, but a farm-in or a merger is quite possible.