REG-Cadogan Petroleum: Operational Update

Cadogan Energy SolutionsAnnouncement

16/01/2019 07:05

Press Release  
 16 January 2019 
 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”)

Cadogan Petroleum plc (“Cadogan”), an independent, diversified oil & gas
company listed on the main market of the London Stock Exchange, is pleased to
provide the following operational update.

Exit net production in December was 274 boepd. Net production for 2018
averaged 250 boepd, which is approximately 25% above the production target
announced for the year and 61% higher than the average production in 2017. The
net average 2018 production result is despite the Cheremkhivske gas field
being shut-down in May, due to the award of the extension of the production
license being delayed.

The increase in 2018 production was again delivered in an incident free
working environment and with a further reduction of emissions into the
atmosphere. Emissions reduced from 24.1 tons of CO(2,equiv)/boe in 2017
to approximately 16.2 CO(2,equiv)/boe  in 2018. In absolute terms, 2017
emissions were exceeded by only 118 tons of CO(2,equiv), notwithstanding
the 61% increase in production and the resumption of drilling operations.

Production was sold at an average price of 52 $/boe, which was 10 $/boe higher
than in the previous year and generated (unaudited) revenues of $4.8 million,
being a 98% year on year increase. Aggregated revenues from production, gas
trading and the Company’s oil service business in 2018 is expected to be
marginally lower than in the previous year, owing to lower volumes of gas
traded. The Company also recovered additional cash from previously impaired
items.

During the year, the Company worked to secure its two key licenses in the West
of Ukraine. Following the drilling on time and budget, well Vovche-2 on the
Bitlyanska license is being monitored and prepared for flow tests in order to
assess whether it is a good candidate for pilot production, thus completing
the original work program of the exploration phase.

The Blazh-10 well on the Monastyretska license spudded in early January 2019
and drilling is ongoing; the first casing has already been set at about 400
meters depth. Spudding of the well occurred later than expected due to an
extended test program at the rig’s previous location in Poland. The Blazh-10
well is targeting the Yamna sandstones, which is the reservoir of the three
producing wells on the license, at a depth of approximately 3,500 meters. The
well is anticipated to take approximately three months to drill and fulfills
the remaining license commitment, with the commitment for pilot test
production already met.

Cadogan is also pleased to confirm that the customary approvals required to
execute the transaction announced on November 12, 2018, have been granted.
Cadogan has received $1.715 million from Eni and is finalizing the assignment
of its interest in the Debeslavetska and Cheremkhivsko-Strupkivska gas
licenses to Wetstgasinvest LLC, which is now a wholly owned subsidiary of
Nadra Ukrayny.

The Company has also continued to screen selective and value accretive
investment opportunities, which would make use of its cash while
geographically diversifying its portfolio.

Guido Michelotti, Cadogan Petroleum CEO, commented:

“2018 represents an important milestone in the transformational journey of
Cadogan. Years of successful effort to asses and extract the value of its
legacy licenses, to re-engineer its organization and to monetize previously
impaired items have reshaped Cadogan and reset its foundations. The Company
has refocused on the West of Ukraine and can look with confidence to a future
as a profitable operator with a positive operating cash-flow”

-ENDS-

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                                       +44 (0) 20 7894 7000  
 Nick Tulloch                                                             



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