Losses reach £7.5m at Regal

LOSSES at troubled exploration firm Regal Petroleum ballooned to $13.7m (£7.5m) in 2004 from $2.9m a year earlier after the company took a crude-oil hedging hit of $11m and suffered a larger-than-expected depreciation charge on its controversial Greek assets. Consensus forecasts had been for losses of about $5m.

The news is another blow for the company, which has seen its share price plummet in recent weeks after it admitted its main prospect in Greece - the much-hyped Kallirachi 2 well, in the Aegean Sea - had failed to yield commercial quantities of oil.

That controversy saw Frank Timis quit as chief executive, although he remains executive chairman.

The company has contracted industry consultants to conduct audits of its Greek and Ukrainian assets and company sources say the results should be announced in the next two or three weeks. The firm is understood to be considering selling Ukrainian assets and returning part of the proceeds to shareholders.

Stockbroker Evolution remains under fire in the City, having raised £45m three weeks before Regal's shares crashed, leaving the City facing losses of £200m.

Regal shares hit 509p at the peak of the Aim oil and gas boom in March, giving it a market capitalisation of £600m. However, the shares have been on the slide since April amid worries about the quality of the Greek assets.