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.
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Reserves & Resources (MMboe) (gross) |
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Licence |
Type |
Working interest |
Area (km2) |
Current net production (boepd) |
3P reserves |
2C contingent resources |
Best estimate prospective resources |
| Eastern Ukraine |
Pokrovska |
Conventional gas |
70.0 |
50 |
- |
2.6 |
- |
73.6 |
| Pirkivska |
Conventional gas |
100.0 |
72 |
- |
11.3 |
6.6 |
67.9 |
| Zagoryanska |
Conventional gas |
100.0 |
50 |
- |
1.6 |
2.2 |
- |
| Western Ukraine |
Monastyretska |
Conventional oil |
99.8 |
26 |
48 |
2.7 |
- |
3.0 |
| Debeslavetska (prod.) |
Conventional gas |
99.2 |
27 |
66 |
0.8 |
- |
- |
| Debeslavetska (exp.) |
Conventional gas |
99.2 |
218 |
- |
- |
- |
1.0 |
| Cheremkhivska |
Conventional gas |
54.4 |
119 |
8 |
0.2 |
- |
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| Bitlyanska |
Conventional oil |
99.8 |
390 |
- |
- |
1.2 |
66.6 |
| Slobodo Rungurska |
Conventional oil |
100.0 |
101 |
- |
- |
- |
8.0 |
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Total |
1,052 |
122 |
19.2 |
10.1 |
220.0 |
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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 |
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| Cantor Fitzgerald Europe |
+44 (0) 20 7894 7000 |
David Porter
Sarah Wharry |
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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.
