REG-Cadogan Petroleum: Exit from the shale gas project in Ukraine

Cadogan Energy SolutionsAnnouncement

12/11/2018 10:00

Press Release 12 November 2018                                                                                       
 This announcement is deemed to contain Inside Information as defined under the Market Abuse Regulations n. 596/2014  

Cadogan Petroleum Plc.

(“Cadogan” or the “Company”)

Exit from the shale gas project in Ukraine

Cadogan Petroleum plc. (“Cadogan”), an independent, diversified, oil & gas
company listed on the London Stock Exchange, announces it has reached an
agreement with Eni and PJSC “National Joint Stock Company “Nadra
Ukrayny” (“Nadra Ukrayny”) on the terms and conditions of Eni’s exit
from Westgasinvest LLC (WGI).

Under the terms of the agreement, Cadogan will receive consideration of $1.715
million from Eni and will commit: (i) not to exercise its pre-emptive rights
on Eni’s transfer of its WGI’s shares to Nadra Ukrayny, (ii) to transfer
its own shares in WGI to Nadra Ukrayny for a nominal consideration and (iii)
to transfer its shares in the company operating the Debeslavetska and
Cheremkhivsko-Strupkivska gas licences to WGI, also for a nominal
consideration.

The value of Cadogan’s participation in WGI’s shale gas licences has
previously been impaired. The value of the Debeslavetska and
Cheremkhivsko-Strupkivska’s producing assets has also been almost entirely
depreciated in previous years.  The impact of the transfers on Cadogan’s
balance sheet is as such negligible.

Current production from Debeslavetska is 58 boepd (net to Cadogan) with 2P/3P
reserves at June 30, 2018 of 47/147 Kboe. Production operations at
Cheremkhivsko-Strupkivska remain suspended, pending  WGI receiving the
renewal of the expired production licence.  

The agreement is subject to a number of customary approvals, including
approval of the Antimonopoly Committee of Ukraine. The transaction is expected
to be closed in 2 months.

Commenting, Guido Michelotti, CEO of Cadogan, said:

“This is a good agreement for all parties. It enables Cadogan to withdraw
from its gas operations, which are sub economic under the current 70 % royalty
regime. It also secures a more certain future for our loyal employees, who
have operated these wells and facilities for the last ten years. Our gratitude
goes to them for the hard work they have done on behalf of Cadogan.”

-ENDS-

About

Westgasinvest LLC (WGI), a company owned by Eni (50.01%), Nadra Ukrayny
(34.99%) and Cadogan (15%), is the holder of five Shale Gas licences  in
which Cadogan is carried through exploration. WGI is also the licence holder
of Debeslavetska and Cheremkhivsko-Strupkivska licences based on the
agreements signed at the time Eni entered the shale gas project in 2012; WGI
owns a 1% participating interest in these two licences which are operated by a
Cadogan’s wholly owned subsidiary.

Cadogan is an independent, diversified oil and gas company, which operates
exploration and production licenses in Western Ukraine, conducts gas trading
operations, and provides services to E&P companies.

Nadra Ukrayny was established in 2000 by Decree of the President of Ukraine ?
802.  It consolidates 13 geological and specialized enterprises under its own
aegis and represents the State of Ukraine’s interest in joint investment
projects over the territory of Ukraine.

For further information, please contact:

 Cadogan Petroleum plc.                                                    
 Guido Michelotti           Chief Executive Officer  +380 (44) 594 5870    
 Ben Harber                 Company Secretary        +44 0207 264 4366     
                                                                           
 Cantor Fitzgerald Europe                                                  
 David Porter Nick Tulloch                           +44 (0) 20 7894 7000  



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