Shares in Regal Petroleum enjoyed their largest gain in 2½ years on Friday after reports that the London-listed energy group would soon be the focus of a takeover bid from Shell.

The reports, which met a quick and outright denial from Regal, are testimony to the improved fortunes that the company has enjoyed under David Greer, its chief executive.

They also mark a happy return to the limelight for the 50-year-old Glaswegian, who had been forced to step down as deputy chief executive of Shell's Sakhalin Energy Investment Company in June 2007 after details of a motivational e-mail to staff were leaked on to the internet. Mr Greer's exhortations that his staff should “lead me, follow me or get out of my way” bore a striking resemblance to a famous speech given by the American general George Patton to troops during the Second World War.

Widely ridiculed, Mr Greer, every inch the grizzled oilman, resigned. However, he was back in the industry within months, taking the top job at Regal after a boardroom coup.

It was, perhaps, the ideal company for Mr Greer, whose own media notoriety pales into insignificance when compared with Frank Timis, Regal's founder and a man whose brushes with the law and the City authorities are legendary.

Mr Greer, who spent 28 years at Shell, including four in Siberia, has won back a large measure of respect for putting Regal, which almost collapsed in 2005, back on track. Despite a lack of experience in the City, he convinced investors to back an £85 million cash call that was oversubscribed by £35 million.

Regal has been the centre of many takeover rumours recently, but previous speculation that Gaz de France and Lukoil were sniffing around failed to boost the shares, which, until Friday, had languished. If Shell's reported 300p-a-share bid does materialise, a hefty premium to Friday's 120p, then Mr Greer will have delivered up to £100 million to Mr Timis, who still owns 15 per cent of Regal.

Mr Greer, who has an engineering degree from the University of Edinburgh, prefers to concentrate on the future and last week said that Regal would report a profit in the first half of 2010.

As well as its balance sheet, he is also keen to clean up Regal's image, telling The Times recently: “The best legacy for me would be to transform this ragdoll of the City press into a respectable, mid-tier oil and gas company on the main market.”