Regal Petroleum, the oil and gas explorer, has denied speculation that it has received a $1.2 billion (£677 million) bid approach from Royal Dutch Shell.

Regal’s share price shot up 36 per cent to 113p this morning following reports of an offer, received in a letter from the Anglo-Dutch oil group. The reported proposal was worth 300p a share.

In a formal statement released this morning, Regal said they had not received an offer. But the denial did not convince the market that a bid offer is out of the question, as Regal shares were holding their early gains by late morning.

Previously, Regal said it had received approaches on acquiring assets or stakes in the company. But, this morning, the company said none of these talks was at an advanced stage.

Mr Greer, a former Shell executve, arrived at Regal as chief executive in November and he immediately ditched a deal to sell to his former employer a 51 per cent stake in the Ukrainian assets.

Instead, Mr Greer raised $165 million (£90 million) to develop the assets.

A deal at $1.2 billion would have meant a personal windfall of more than £180 million for Frank Timis, the founder and former chief executive of Regal, who was accused of exaggerating the prospects of the exploration of a oilfield in Greece.

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