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

Cadogan Energy SolutionsAnnouncement

22/12/2015 12:30

CADOGAN PETROLEUM PLC                             

                               Operations Update                               

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, is pleased to provide an update on its operations.

Exploration & Production Business

Production has continued throughout 2015 from Debeslavetska and Cheremkivska
(gas) and Monastyretska (oil) licences in Western Ukraine and was 122 boepd
(net) at the end of November 2015.

Management is of the opinion that the current in-house estimation of reserves
and resources, set out in the table below, may conservatively represent the
potential of some of the Western licences and has requested a third party
independent evaluation of reserves and resources of its entire portfolio. The
report is expected to be delivered in the coming weeks. The Company will make
an announcement with regard to this update in due course.

In Eastern Ukraine, the Company continues to progress the renewal of the
Pirkivska and Zagoryanska licences which are pending approval by the Ukraine
authorities. The Company has developed an exploration work programme involving
multiple well re-entries across its three licences in Eastern Ukraine, via a
profit sharing agreement with local contractors.

                                                                   Reserves & Resources (MMboe)  
                                                                             (gross)             
                                                                                                 
        Licence       Type         Working    Area     Current      3P         2C        Best    
                                   interest   (km2)      net     reserves  contingent  estimate  
                                                      production           resources  prospective
                                                       (boepd)                         resources 
                                                                                                 
Eastern Pokrovska     Conventional   70.0      50         -         2.6        -         73.6    
Ukraine               gas                                                                        
                                                                                                 
        Pirkivska     Conventional  100.0      72         -        11.3       6.6        67.9    
                      gas                                                                        
                                                                                                 
        Zagoryanska   Conventional  100.0      50         -         1.6       2.2          -     
                      gas                                                                        
                                                                                                 
Western Monastyretska Conventional   99.8      26         48        2.7        -          3.0    
Ukraine               oil                                                                        
                                                                                                 
        Debeslavetska Conventional   99.2      27         66        0.8        -           -     
        (prod.)       gas                                                                        
                                                                                                 
        Debeslavetska Conventional   99.2      218        -          -         -          1.0    
        (exp.)        gas                                                                        
                                                                                                 
        Cheremkhivska Conventional   54.4      119        8         0.2        -                 
                      gas                                                                        
                                                                                                 
        Bitlyanska    Conventional   99.8      390        -          -        1.2        66.6    
                      oil                                                                        
                                                                                                 
        Slobodo       Conventional  100.0      101        -          -         -          8.0    
        Rungurska     oil                                                                        
                                                                                                 
                                    Total     1,052      122       19.2       10.1       220.0   
                                                                                                 

The Sloboda-Rungurske and Pokrovska licences, both at the exploration stage and
without production, have been suspended by the  Ukraine petroleum authority for
two breaches of licence commitments. Cadogan is of the opinion that the
licenses have been properly managed and that the breaches claimed have not
occurred, and has submitted  supporting evidence of its position as well as the
prescribed documents to the authority. Cadogan expects the suspensions to be
revoked in due course.

Gas Trading & Services Business

The Company's gas trading and services businesses in Ukraine have continued to
perform well with the gas trading business now having sold over 250 million
cubic metres of gas since commencement of trading in 2014. The businesses
combined are expected to substantially supplement the Company's free cash flows
from its upstream operations in 2015 and support its strategy of becoming cash
neutral in 2016.

Strategy Update

The Company continues to assess opportunities to leverage its strong cash
position and take advantage of opportunities in the current oil price
environment to source additional exploration and production assets, in order to
diversify Cadogan's portfolio both geographically and operationally. The
Company's strategy is premised upon:

  * Sourcing additional producing assets to cover corporate overheads and
    provide free cash flow for exploration activities;
  * Complement this with high impact exploration and near term development
    assets with further upside; and
  * Minimise Ukraine expenditure through a farm-out for carry on legacy
    Ukrainian licences.

The Company has also continued to focus on reducing costs during 2015. Combined
with these cost reductions, the cash flows generated from its exploration and
production business, gas trading and services businesses have largely offset
the Company's corporate overheads thus making a substantial step towards cash
neutrality in 2016.

Publication of Presentation

The Company is also pleased to advise that it has today published an updated
Company presentation which is available on its website at: 
www.cadoganpetroleum.com

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                                                                   

Disclaimer

This announcement contains certain forward-looking statements.  These
statements are made by the Company's Directors in good faith based on the
information available to them up to the time of their approval of this
announcement but such statements should be treated with caution due to inherent
uncertainties, including both economic and business factors, underlying such
forward-looking information.  This announcement has been prepared solely to
provide additional information to shareholders to assess the Company's
strategies and the potential for those strategies to succeed.  This
announcement should not be relied on by any other party or for any other
purpose.



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