Cadogan Petroleum Operations Update

 
TIDMCAD 
 
CADOGAN PETROLEUM PLC 
 
                               Operations Update 
 
Cadogan Petroleum plc ("Cadogan" or the "Company"), an independent oil and gas 
exploration, development and production company with onshore gas, condensate 
and oil assets in Ukraine, is pleased to provide an update on its operations. 
 
Exploration & Production Business 
 
Production has continued throughout 2015 from Debeslavetska and Cheremkivska 
(gas) and Monastyretska (oil) licences in Western Ukraine and was 122 boepd 
(net) at the end of November 2015. 
 
Management is of the opinion that the current in-house estimation of reserves 
and resources, set out in the table below, may conservatively represent the 
potential of some of the Western licences and has requested a third party 
independent evaluation of reserves and resources of its entire portfolio. The 
report is expected to be delivered in the coming weeks. The Company will make 
an announcement with regard to this update in due course. 
 
In Eastern Ukraine, the Company continues to progress the renewal of the 
Pirkivska and Zagoryanska licences which are pending approval by the Ukraine 
authorities. The Company has developed an exploration work programme involving 
multiple well re-entries across its three licences in Eastern Ukraine, via a 
profit sharing agreement with local contractors. 
 
                                                                   Reserves & Resources (MMboe) 
                                                                             (gross) 
 
        Licence       Type         Working    Area     Current      3P         2C        Best 
                                   interest   (km2)      net     reserves  contingent  estimate 
                                                      production           resources  prospective 
                                                       (boepd)                         resources 
 
Eastern Pokrovska     Conventional   70.0      50         -         2.6        -         73.6 
Ukraine               gas 
 
        Pirkivska     Conventional  100.0      72         -        11.3       6.6        67.9 
                      gas 
 
        Zagoryanska   Conventional  100.0      50         -         1.6       2.2          - 
                      gas 
 
Western Monastyretska Conventional   99.8      26         48        2.7        -          3.0 
Ukraine               oil 
 
        Debeslavetska Conventional   99.2      27         66        0.8        -           - 
        (prod.)       gas 
 
        Debeslavetska Conventional   99.2      218        -          -         -          1.0 
        (exp.)        gas 
 
        Cheremkhivska Conventional   54.4      119        8         0.2        - 
                      gas 
 
        Bitlyanska    Conventional   99.8      390        -          -        1.2        66.6 
                      oil 
 
        Slobodo       Conventional  100.0      101        -          -         -          8.0 
        Rungurska     oil 
 
                                    Total     1,052      122       19.2       10.1       220.0 
 
 
The Sloboda-Rungurske and Pokrovska licences, both at the exploration stage and 
without production, have been suspended by the  Ukraine petroleum authority for 
two breaches of licence commitments. Cadogan is of the opinion that the 
licenses have been properly managed and that the breaches claimed have not 
occurred, and has submitted  supporting evidence of its position as well as the 
prescribed documents to the authority. Cadogan expects the suspensions to be 
revoked in due course. 
 
Gas Trading & Services Business 
 
The Company's gas trading and services businesses in Ukraine have continued to 
perform well with the gas trading business now having sold over 250 million 
cubic metres of gas since commencement of trading in 2014. The businesses 
combined are expected to substantially supplement the Company's free cash flows 
from its upstream operations in 2015 and support its strategy of becoming cash 
neutral in 2016. 
 
Strategy Update 
 
The Company continues to assess opportunities to leverage its strong cash 
position and take advantage of opportunities in the current oil price 
environment to source additional exploration and production assets, in order to 
diversify Cadogan's portfolio both geographically and operationally. The 
Company's strategy is premised upon: 
 
  * Sourcing additional producing assets to cover corporate overheads and 
    provide free cash flow for exploration activities; 
  * Complement this with high impact exploration and near term development 
    assets with further upside; and 
  * Minimise Ukraine expenditure through a farm-out for carry on legacy 
    Ukrainian licences. 
 
The Company has also continued to focus on reducing costs during 2015. Combined 
with these cost reductions, the cash flows generated from its exploration and 
production business, gas trading and services businesses have largely offset 
the Company's corporate overheads thus making a substantial step towards cash 
neutrality in 2016. 
 
Publication of Presentation 
 
The Company is also pleased to advise that it has today published an updated 
Company presentation which is available on its website at: 
www.cadoganpetroleum.com 
 
Enquiries: 
 
Cadogan Petroleum plc                   [phone] 
 
Guido Michelotti, Chief Executive 
Officer 
Marta Halabala, Company Secretary 
 
Cantor Fitzgerald Europe                [phone] 
 
David Porter 
Sarah Wharry 
 
Disclaimer 
 
This announcement contains certain forward-looking statements.  These 
statements are made by the Company's Directors in good faith based on the 
information available to them up to the time of their approval of this 
announcement but such statements should be treated with caution due to inherent 
uncertainties, including both economic and business factors, underlying such 
forward-looking information.  This announcement has been prepared solely to 
provide additional information to shareholders to assess the Company's 
strategies and the potential for those strategies to succeed.  This 
announcement should not be relied on by any other party or for any other 
purpose. 
 
 
 
END 
 

(END) Dow Jones Newswires

December 22, 2015 07:29 ET (12:29 GMT)