Regal Energy and G2 Resources Announce Update on Proposed Business Combination, Regal Operations and Proposed Financing

NOT FOR DISTRIBUTION IN THE UNITED STATES OF AMERICA

Regal Energy Ltd. ("Regal") (TSX VENTURE:REG) and G2 Resources Inc. ("G2") (TSX
VENTURE:GRT) are pleased to announce an update on their proposed business
combination by way of plan of arrangement of Regal and G2 with a privately held
oil and gas company based in Calgary, Alberta, Rustler Petroleum Inc.
("Rustler"), announced on March 12, 2008 (the "Proposed Transaction"), the
general details of the proposed concurrent financing, as well as a Regal
operations update and the refiling of Regal's first quarter 2008 financial
statements.


Update on Proposed Transaction and Production

Regal, G2 and Rustler have refined the structure of the Proposed Transaction.
Regal will acquire all of the issued and outstanding shares of Rustler pursuant
to an exempt takeover bid, in exchange for cash and shares. Regal will then
complete the arrangement of G2, pursuant to which shareholders of G2 will
receive shares of Regal.


Regal, G2 and Rustler are in the process of completing due diligence on each
other and anticipate final financial statements and due diligence will be
complete by April 17, 2008, with the parties expecting to execute a formal
agreement on April 18, 2008.


The parties have agreed, subject to receipt of shareholder and regulatory
approval, the board of directors of the combined entity, after completion of the
Proposed Transaction, will consist of three existing directors of G2, namely
Curtis A. Hartzler, Jake Pronk and Hugh Mogensen; three existing directors of
Regal, namely Harry Knutson, Richard M. Wlodarczak and Al J. Kroontje; as well
as one new independent director to be determined.


The current average daily production for Regal, Rustler and G2, after giving
effect to the sale by G2 of its producing assets at Trutch, British Columbia, is
as follows:




Regal                                                             375 Boepd
Rustler                                                           360 Boepd
G2                                                                230 Boepd
                                                               -------------
Total Combined Current Production                                 965 Boepd

G2 Shut-in Production                                             180 Boepd
                                                               -------------
Total Combined Productive Capacity                              1,145 Boepd



G2 currently has two natural gas wells that are shut-in due to restricted
processing capacity, which are expected to add 180 Boepd net to G2's daily
production when they resume production. At Windfall, Alberta the 3-36-59-16 W5M
well (33.3% net interest to G2) is expected to resume at a restricted rate of 80
Boepd net to G2 by the end of April 2008. At Kaybob, Alberta, the 13-35-63-21
W5M well (55% net interest to G2 before payout and 33% after payout) previously
produced approximately 100 Boepd net to G2 prior to its shut in during the month
of November 2007. G2 is continuing to review alternatives for processing its
natural gas production from the well, but at this time is uncertain as to when
it will resume production.


Regal's principal production is at Garrington, Alberta and at Eight Mile,
British Columbia with the commencement of production from the 7-8-81-17 W6M well
(the "7-8 well"). Rustler's principal production is at Westlock and Westerose,
Alberta. G2's principal natural gas production is from Windfall and Kaybob,
Alberta and oil production is from Roncott, Onward and Luseland, Saskatchewan.


Regal Operations Update

The Eight Mile 7-8 well is now producing natural gas production through recently
constructed facilities to the Spectra McMahon gas processing plant in Taylor,
British Columbia. The 7-8 well is producing at an initial rate of approximately
3.0 MMcfpd of natural gas. Regal holds a 40% working interest in the well until
payout and a 24% interest after payout. With the addition of the 7-8 well,
Regal's corporate production has increased to approximately 375 Boepd.


Regal has earned an interest in six sections of land at Eight Mile as a result
of the completion of three wells and has an option on an additional 15
contiguous sections, within an area of mutual interest (the "AMI"). Regal
expects to conduct further work within the AMI during 2008, including the
acquisition of 3D seismic, as well as an exploratory and development drilling
program.


Update on Concurrent Financing

In order to finance the cash portion of the purchase price for Rustler and for
working capital purposes, Regal intends to complete an equity financing for
gross proceeds of a minimum of $7,000,000 and a maximum of $10,000,000 (the
"Offering") and are expected to be made up of the following securities:


(a) subscription receipts at a price per receipt to be determined in the context
of the market, each entitling the holder to receive, for no additional
consideration, one unit of Regal ("Unit") consisting of one common share of
Regal ("Common Share") and one share purchase warrant of Regal, with each
warrant ("Warrant") entitling the holder to acquire one Common Share at a price
to be determined in the context of the market for a period of twenty-four months
from the closing date; and


(b) subscription receipts (the "Flow-Through Subscription Receipts"), each
entitling the holder to receive, for no additional consideration, one Common
Share to be issued on a flow-through basis pursuant to the Income Tax Act
(Canada) ("Flow-Through Shares"). Of the Flow-Through Subscription Receipts to
be issued, certain of them will be related to eligible Canadian Exploration
Expense ("CEE") (or Canadian Development Expense eligible for CEE treatment
("CEE Flow-Through Shares")) and will be sold at a price per receipt to be
determined in the context of the market, and certain of them will be related to
eligible Canadian Development Expense ("CDE Flow-Through Shares") and will be
sold at a price per receipt to be determined in the context of the market. The
CEE Flow-Through Shares will be eligible for 100% tax write off in 2008 and the
CDE Flow-Through Shares will be eligible for 30% tax write-off in 2008 with the
balance available on a declining balance basis in future years.


The gross proceeds of the Offering will be placed in escrow pursuant to a
subscription receipt agreement to be entered into (the "Subscription Receipt
Agreement") pending the concurrent completion of the Proposed Transaction. The
exchange of the Subscription Receipts into Units, CEE Flow-Through Shares and
CDE Flow-Through Shares will occur concurrent with the closing of the Proposed
Transaction. In the event the Proposed Transaction is not approved, or the
parties decide not to proceed with the Proposed Transaction by June 30, 2008,
the funds will be returned to the subscribers with their pro rata share of any
interest earned.


The completion of the Offering shall be subject to the receipt of all necessary
regulatory, shareholder and stock exchange approvals and shall be conducted
pursuant to private placement exemptions from prospectus requirements.


Regal Refiles First Quarter 2008 Financial Statements

As a result of the Proposed Transaction, Regal's interim financial statements
for the quarter ended December 31, 2007 have been amended to: (a) remove notice
that there was no involvement by an auditor as these financial statements have
now been reviewed by Regal's auditor in accordance with CICA Handbook Section
7050; (b) expand disclosures with respect to new CICA Handbook sections adopted
in the first quarter (Notes 2 and 6); and (c) amend disclosures of financial
statement line items to conform with descriptions used at year end. There have
been no adjustments to any numerical data contained within the financial
statements of Regal previously announced and filed on SEDAR.


ADVISORY REGARDING OIL EQUIVALENT CONVERSIONS

Natural gas has been converted to a barrel of oil equivalent (Boe) using 6,000
cubic feet (6 Mcf) of natural gas equal to one barrel of oil (6:1), unless
otherwise stated. The Boe conversion ratio of 6 Mcf to 1 Bbl is based on an
energy equivalency conversion method and does not represent a value equivalency;
therefore Boe's may be misleading if used in isolation. (This conversion
conforms to NI 51-101). References to natural gas liquids ("NGLs") in this news
release include condensate, propane, butane and ethane and one barrel of NGLs is
considered to be equivalent to one barrel of crude oil equivalent (Boe).


ADVISORY REGARDING FORWARD-LOOKING STATEMENTS

Certain information regarding Regal and G2 set forth in this news release,
including management's assessment of future plans, operations and operational
results may constitute forward-looking statements under applicable securities
law and necessarily involve risks associated with oil and gas exploration,
production, marketing and transportation such as loss of market, volatility of
prices, currency fluctuations, imprecision of reserves estimates, environmental
risks, competition from other producers and ability to access sufficient capital
from internal and external sources. As a consequence, actual results may differ
materially from those anticipated in the forward-looking statements.