Regal fined 600,000 for rules breach

OIL explorer Regal Petroleum was yesterday landed with a &pound;600,000 fine from the London Stock Exchange for &ldquo;numerous, serious breaches&rdquo; of its rules in relation to the company&rsquo;s Greek exploration wells.<br /><br />The LSE&rsquo;s Aim market disciplinary committee said statements released by Regal between 2003 and 2005, claiming oil reserves of up to 227m barrels at its Kallirachi Prospect in the North Aegean Sea, were excessively optimistic. It added that Regal was slow to tell investors when drilling revealed an absence of oil.<br /><br />When news of the dry Greek wells eventually broke, it prompted an 80 per cent drop in Regal&rsquo;s share price and led investors to force founder and major shareholder Frank Timis to resign as executive chairman.<br /><br />However, analysts said the company had got away lightly with the LSE&rsquo;s fine.<br /><br />&ldquo;The penalty, which amounts to a slap on the wrist for Regal, draws a line underneath what has been a lengthy debacle,&rdquo; said Richard Savage, an oil analyst at Mirabaud Securities.<br /><br />Regal said it was disappointed at the outcome of the LSE probe but added it was pleased to put the matter behind it.<br /><br />&ldquo;At no point has it been suggested that any of the current management team have conducted their responsibilities in anything other than a proper and professional manner,&rdquo; the company said.<br /><br />Most of Regal&rsquo;s management and directors have been replaced since 2005.<br /><br />The Financial Services Authority, which has faced years of criticism that it has failed to target market abuse despite saying this crime was a priority, decided last year not to proceed with an investigation into Regal.<br /><br />&ldquo;It was decided that Aim were the best people to take this forward," a spokeswoman for the FSA said.<br /><br />Regal shares rose 2.9 per cent on Aim yesterday to close at 106.5p.<br />