REG-Cadogan Petroleum: General Meeting

Cadogan Energy SolutionsAnnouncement

21/10/2019 17:25

NOT FOR RELEASE, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OF AMERICA OR
ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE UNLAWFUL.

Press
Release                                                                                   
                               
                    21 October, 2019

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

Cadogan Petroleum Plc

(“Cadogan” or the “Company”)

Mailing of notice of general meeting

Further to the announcements made on 30 September 2019 and 2 October 2019,
Cadogan Petroleum plc (“Cadogan”), an independent, diversified oil & gas
company listed on the Main Market of the London Stock Exchange, hereby
confirms that it has today mailed to the Company’s shareholders a notice of
general meeting with respect to the matters that were the subject of the
notice of requisition provided to the Company in accordance with Section 303
of the Companies Act 2006.

The notice of general meeting is accompanied by the members’ statement of
the requisitioning shareholders and also the Company’s response in relation
thereto. These documents, together with the relevant proxy form are also
available for download from the Investor Centre section on the Company’s
website www.cadoganpetroleum.com.

The general meeting will be held on Friday 15 November 2019 at 10.00 am at the
offices of Shakespeare Martineau LLP. 6 Floor, 60 Gracechurch Street, London
EC3V 0HR.

The Board of the Company (which term excludes Michel Meeus only for the
purposes of this RNS and the Company’s response to the members’ statement
made by the shareholders who sent the requisition notice, one of whom was
Michel Meeus himself) fundamentally and unanimously disagree with the
substantive points made by the requisitioning shareholders in the members’
statement which has been published (in full and unedited) by the Company and
which accompanies this notice of general meeting. The Board unanimously
recommends that shareholders vote against all of the proposed resolutions.

The requisitioning shareholders allege that the Company has continuously
underperformed, however since 2011 the Company has actually successfully
undertaken a comprehensive operational and financial turn-around. The Company
has now returned to profit.

The requisitioning shareholders have highlighted the fact that the Company’s
share price has not materially improved in recent times. While this is not
disputed, the Board is of the view that the underlying reasons why the
Company’s share price has not improved in line with the Company’s recent
positive performance are not the result of the wrong decisions having been
taken by the Board. The Board’s strategy for the Company in recent years has
been to focus on the longer-term fundamentals, taking a prudent approach which
is based on production and which is both sustainable and does not put assets
at risk unduly.

Furthermore, the Board disputes the assertion by the requisitioning
shareholders that the Company’s share price has underperformed its peers or
the key sector indices (which are considered to be the AIM E&P index).

The Board remains of the view that the extension of the Proger convertible
loan was in the best interests of the Company. It was unanimously approved by
all Directors, including Mr Meeus. If the loan is, with the approval of
Cadogan's shareholders, converted, it represents an opportunity to share in
the attractive growth of an enterprise which is well managed and active in
sectors beyond just the oil & gas industry, which has the benefit of
diversifying the Company’s risk profile. The fair market value of the stake
in Proger into which the loan would convert had appreciated by approximately
$4.8 million in the period from 26 February 2019 to 30 June 2019 (see Note 12
to the Company’s Condensed Financial Statements for the six months ended 30
June 2019). Alternatively, if the loan is not converted, it will attract
interest at a good rate (being 450 bps higher than that which is paid by
Italian government bonds of comparable maturity).

The Board is also optimistic that Cadogan will benefit from synergies and
other opportunities for cooperation with Proger in and outside of Ukraine,
particularly if the loan is converted.

The Board questions the motives and timing of the requisitioning shareholders'
actions. The requisitioning shareholders voted at the Company's AGM in June in
favour of the re-election of Messrs Testa and Schenato, whom they are now
seeking to remove.

While the Company recognises that periodical change at the Board level is an
essential element of good governance, it is difficult for the Board to view
the requisitioning of the general meeting and proposal by these shareholders
to remove two directors and appoint three others as anything other than an
attempt to take control of the Company (including the process of appointing a
new CEO) without going to the expense of making a general offer that would
enable the rest of the shareholders of the Company to tender their shares at a
fair price (i.e. a premium to the current market price).

Despite seeking control of the Board, the requisitioning shareholders have not
provided any information to either the Board, or to the rest of the
shareholders with respect to the strategy that they would implement for the
Company, were they to secure that control.

Messrs Testa and Schenato have served the Company well. They have relevant
experience in the industry, whereas the proposed new appointees to the Board
have no experience in oil & gas operations.

This Announcement has been issued by, and is the sole responsibility of, the
Company.

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  Broker to Cadogan Petroleum plc                        
 David Porter                                               +44 (0) 20 7894 7000  



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