REG-Cadogan Energy Solutions Plc: Operations Update

Cadogan Energy SolutionsAnnouncement

29/01/2024 07:15

Cadogan Energy Solutions Plc

("Cadogan" or the "Company") 

This announcement contains inside information as defined under the Market
Abuse Regulations n. 596/2014

 

Cadogan Energy Solutions plc ("Cadogan"), the London Stock Exchange listed
independent company is pleased to provide the following operational update
post year end.

2023 remained a highly challenging year for Cadogan due to the ongoing war
situation in Ukraine and its consequences on the operational activities of the
Company in the Country.

Despite these difficulties, the Company has been able to ensure the safety and
the security of its employees and assets in Ukraine.

The Company could not avoid temporary shutdowns of its production during the
Q1 2023 due to the severe constraints arising in the Country.  The oil
production grew by 1% above 2022 levels. In 2023, the net oil production was
119,057 bbl corresponding to an average of 326 bpd.

In 2023, the Company continued focusing on the subsoil study of Blazhiv field.
Following the works on 2D seismic data processing and reinterpretation done in
2022, the Company conducted and completed full hydrodynamic surveys of
Blazhiv-1, Blazhiv-3, Blazhiv-Monastyrets-3 and Blazhiv-10 wells, and updated
the hydrodynamic model as well as the production indicators. In the second
half 2023, the Company launched a new assessment, by an independent expert, of
hydrocarbon reserves according to PRMS standards. This assessment is expected
to be completed by the end of February 2024. The results will be presented in
the Annual Financial Report 2023.

Cadogan has signed with PJSC Ukrnafta the extension of the lease agreement,
for the wells Blazhiv-3 and Blazhiv-Monastyrets-3, for a 5-year period
(previous contracts were for a 3-year period). This was done ahead the expiry
period which allowed to avoid production stoppage and secure cash flows.

The Company completed the acquisition of the 5% of the share interest in
Usenco Nadra LLC and now holds 100% of Usenco Nadra LLC.

Additionally, in Ukraine, Cadogan is expanding into the electricity generation
activities while significantly reducing emissions to the atmosphere. The
Company is currently developing the project which consists of capturing the
non-commercial associated gas during oil production activities and using it to
generate electricity which will be sold on the grid. This project will achieve
a highly significant drop in the annual gas emissions of Cadogan as the
intensity ratio will drop from 126 to 33 tons of CO2 e/Kboe. It is expected
to be operational in Q1 2025.

All activities were executed without LTI or TRI, with a total of over
1,720,000 manhours since the last incident. Also, the Company has successfully
passed the latest ISO audit while ISO 14001 and 45001 certifications were
re-validated by respective authority for the new term.

 

Regarding the litigation between Cadogan and Proger PMP, Proger Ingegneria,
MALO and TIFS (hereinafter "Proger"), concerning the Loan Agreement and the
reimbursement of the amounts due (principal plus interest accrued), please
find the most recent update below.

 

At the conclusion of the first arbitration held before "Arbitra Camera" in
Rome which had been initiated by Proger in 2021, the arbitration award
("Award") was rendered end of July 2022. Cadogan introduced an appeal, still
pending, before the Court of Appeal of Rome with a next hearing on 25
September 2025.

 

Meanwhile, having taken note of the content of the Award of July 2022, Cadogan
has repeatedly invited Proger to implement the provisions of the Award.

 

When the invitation remained unsuccessful, Cadogan with a formal notice
contested Proger's refusal, arguing that it was in direct contrast with the
clear and unequivocal provision of the Award, which expressly subordinates the
possible transfer of shareholdings to the prior fulfilment of the formalities
required by English law and procedures related to Cadogan as a listed company
on the London Stock Exchange; and also opposing Proger for having behaved and
continuing to behave in a manner that has made it definitively impossible to
the occurrence of the condition precedent referred to in the above-mentioned
Award. Cadogan considers in any case impossible to enter into an enforceable
contract of the conditional preliminary contract referred to above - the
existence, classification and enforceability of which, in any case, Cadogan
disputes - so that, according to the provisions of the aforementioned Award,
the right to reimbursement of the amount covered by the Loan Agreement has
arisen in favor of Cadogan, plus interest accrued, an amount of which Cadogan
then demanded immediate payment.

 

Last November 2023, Cadogan had to initiate a second arbitration to assert its
right to restitution and obtain Proger's condemnation of the consequent
payment.

 

The parties are awaiting the nomination of the members of the Arbitration
Board.

 

In Italy, Exploenergy, which is holding interests on the projects of Corsano
and Reno Centese, got the approval to operate in the gas sector, thanks to the
financial and technical support of Cadogan. The Ministry of the Environment
asked the two corresponding Regions to release the permit agreement.

 

 

ENDS

About

Cadogan is an independent, energy company, which operates an exploration and
production license in Western Ukraine, conducts gas trading operations, and
provides services to E&P companies. The aim of the Company is to be a
diversified energy group making investments offering energy solutions and
alternative services with a lower environmental impact.

For further information, please contact:

Cadogan Energy Solutions plc 
Fady Khallouf   Chief Executive Officer  f.khallouf@cadogan-es.com
Ben Harber   Company Secretary   +44 0207 264 4366

 



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