Cadogan Petroleum Operations Update

 
TIDMCAD 
 
CADOGAN PETROLEUM PLC 
 
                               Operations Update 
 
8 July 2016 
 
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 announce an update on its operations 
in Ukraine. 
 
Oil & Gas Production 
The Company's producing assets in Ukraine have continued with minimal 
interruption. An accurate reservoir management program has kept the average 
production in the first six months at 115 boepd which is slightly (5.5%) higher 
than the average production in the year to 31 December 2015 and 24% higher than 
the average production in the first six months of 2015.  Whilst production 
levels have been marginally ahead of the level of last year, revenues have 
dropped due to lower realised oil and gas prices. 
 
Oilfield Services 
Cadogan's wholly owned service subsidiary, LLC Astro Service, has been working 
on its portfolio of orders with a focus on the plugging & abandonment of old 
wells and restoration of sites. Management expects a significant contribution 
to the Group's full year results from this business segment. 
 
Gas Trading 
The volume of gas traded has been lower than in the corresponding period of 
last year. The primary reason for the lower traded volumes was a loss of two 
large clients switching to new suppliers. Cadogan has however made progress 
with the recovery of receivables and optimization of pre payments from the gas 
trading division since 31 December 2015 (which stood at $11.7 million), which 
has had a net positive impact on the Company's cash balances. 
 
Outlook and Strategy 
Through the first part of the year Cadogan has continued to actively review 
opportunities to expand and to geographically diversify its portfolio of oil 
and gas assets. In particular in Ukraine, Cadogan has looked at either buying 
into licences or accessing third parties' wells to be re-entered applying the 
same techniques which proved successful on the Monastyretska license. 
 
Efforts to preserve cash have continued and have been successful. Net cash 
(cash and cash equivalents less  short term borrowings) has increased from 
$36.5 million as of 31 December  2015 to $40.6 million as of June 30 2016 as a 
result of the optimization of working capital. 
 
Guido Michelotti, Cadogan' CEO commented: 
 
"The first half of 2016 has been another challenging period for oil and gas 
companies operating in Ukraine as they have been exposed to uncertainties in 
the outcome of the licensing processes and to a tax regime which has remained 
punitive.  Cadogan has actively engaged the authorities at all levels to 
protect its expired licenses and to bring the royalties down to pre-Maidan 
level. 
 
This has not distracted management and staff from the efforts to diversify and 
efficiently manage the existing portfolio. I am quite pleased by the increase 
of both production and net cash over the same period last year as we continue 
to focus on preserving our cash resources to pursue opportunities to add value 
to the portfolio." 
 
 
Enquiries: 
 
Cadogan Petroleum plc                   [phone] 
 
Guido Michelotti, Chief Executive 
Officer 
Marta Halabala, Company Secretary 
 
Cantor Fitzgerald Europe                [phone] 
 
David Porter 
Sarah Wharry 
 
 
 
END 
 

(END) Dow Jones Newswires

July 08, 2016 05:46 ET (09:46 GMT)