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 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 |
- |
|
Bitlyanska |
Conventional oil |
99.8 |
390 |
- |
- |
1.2 |
66.6 |
Slobodo
Rungurska |
Conventional oil |
100.0 |
101 |
- |
- |
- |
8.0 |
|
|
|
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.