Cadogan Petroleum Operational Update

 
TIDMCAD 
 
Tuesday, 17 January 2017 
 
                             Cadogan Petroleum plc 
 
                         ("Cadogan" or "the Company") 
 
                              Operational update 
 
Cadogan Petroleum plc announces an update of its operational activities at its 
oil and gas fields in Western Ukraine.  Net production for 2016 averaged 116 
boepd, which is 6% higher than the average for 2015 notwithstanding the 
maturity of the producing assets; while production increased by 6%, emissions 
to the atmosphere, measured in ton CO2/boe, were further reduced by 10 % over 
2015 levels. 
 
 The impact of this increased production on the Company's income statement is 
expected to be compounded this year by a reduction in the royalty rate for oil 
wells from 45% to 29%, which is effective as from January 1st, 2017, and by the 
expected oil production from the re-entry of two old, suspended wells in the 
Monastyretska licence. These re-entries, which are part of Cadogan's strategy 
to sustain production while minimizing capital expenditures, are planned for 
the first quarter of this year. 
 
Cadogan is also pleased to announce that its fully owned Dutch subsidiary has 
entered into a Sale and Purchase Agreement and a Shareholders Agreement with 
the owners of Exploenergy Srl ("Exploenergy") for the purchase of 90% of the 
company's shares. Exploenergy is an Italian company which has 
filed applications for two exploration licences located in the Po Valley, in 
close proximity to fields discovered by the former operator; two leads have 
been identified in these licences with 
combined, un-risked prospective resources estimated to be in excess of 60 BCF. 
Both applications are in an advanced stage of their approval process. 
Exploenergy has also filed an application for a third licence which is not part 
of this transaction and will be returned to the sellers once they have 
established a company vehicle. 
 
Upon the award of each licence the sellers will receive a lump sum payment, 
notionally corresponding to past costs adjusted for debt, receivables and 
payables, and will be carried for their 10 % holding until first commercial 
gas. 
 
Guido Michelotti, Cadogan Petroleum CEO, commented "This transaction gives 
Cadogan an opportunity to apply, outside of Ukraine, our successful business 
model of being an efficient operator of marginal fields. We will work closely 
with the former management of Exploenergy and the Italian stakeholders at large 
to complete the application process expeditiously". 
 
The transaction represents the first step of Cadogan's strategy of reloading 
and geographically diversifying its portfolio of licences. The shares of 
Exploenergy will be transferred to Cadogan once the transaction has been 
registered at Milan Chamber of Commerce, which is expected to occur in the next 
couple of weeks. 
 
The information contained within this announcement may contain inside 
information stipulated under the Market Abuse Regulation (EU) No. 596/2014. 
 
ENDS 
 
For further information, please contact: 
 
Cadogan Petroleum Plc                                [phone] 
 
Guido Michelotti 
Chief Executive Officer 
 
Marta Halabala 
Company Secretary 
 
Cantor Fitzgerald Europe             [phone] 
David Porter 
 
 
 
END 
 

(END) Dow Jones Newswires

January 17, 2017 06:23 ET (11:23 GMT)