REG-Cadogan Petroleum: Operational Update <Origin Href="QuoteRef">CADP.L</Origin>

Cadogan Energy SolutionsAnnouncement

20/05/2016 14:45

CADOGAN PETROLEUM PLC                             

                              Operational update                               

20 May 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, announces its decision not to apply for the award of
a new exploration licence for the Sloboda-Rungurska licence ("Sloboda") in
Ukraine. The Sloboda licence had been suspended last year for alleged breaches;
the suspension had subsequently been revoked and the licence reached its
natural expiry date last month. The current energy price environment combined
with a subsoil use tax (a tax on production at the well head) set at 45% for
oil, has resulted in the remaining exploration potential becoming economically
unviable. The decision not to apply for a new licence has no impact on the
Company's balance sheet, as all assets had already been impaired at 31 December
2015.

In conjunction with this decision, Cadogan has commenced a revision of its
current logistic, organization and staffing level in the west of Ukraine in
order to align them to the new scope of activity and maintain the highest
possible level of efficiency.

Guido Michelotti, CEO, commented:

"We regret the decision to reduce the size of our Ukrainian portfolio, but we
have to acknowledge that the current administrative and fiscal framework in
Ukraine hinders the exploitation of marginal reserves such as those which might
have been discovered in Sloboda."

Enquiries:

Cadogan Petroleum plc                   +380 (44) 594 5870                     
                                                                               
Guido Michelotti, Chief Executive                                              
Officer                                                                        
Marta Halabala, Company Secretary                                              
                                                                               
Cantor Fitzgerald Europe                +44 (0) 20 7894 7000                   
                                                                               
David Porter                                                                   
Sarah Wharry                                                                   

About

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



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