Cadogan Petroleum Operational Update
17 January 2017 - 10:23PM
UK Regulatory
TIDMCAD
Tuesday, 17 January 2017
Cadogan Petroleum plc
("Cadogan" or "the Company")
Operational update
Cadogan Petroleum plc announces an update of its operational activities at its
oil and gas fields in Western Ukraine. Net production for 2016 averaged 116
boepd, which is 6% higher than the average for 2015 notwithstanding the
maturity of the producing assets; while production increased by 6%, emissions
to the atmosphere, measured in ton CO2/boe, were further reduced by 10 % over
2015 levels.
The impact of this increased production on the Company's income statement is
expected to be compounded this year by a reduction in the royalty rate for oil
wells from 45% to 29%, which is effective as from January 1st, 2017, and by the
expected oil production from the re-entry of two old, suspended wells in the
Monastyretska licence. These re-entries, which are part of Cadogan's strategy
to sustain production while minimizing capital expenditures, are planned for
the first quarter of this year.
Cadogan is also pleased to announce that its fully owned Dutch subsidiary has
entered into a Sale and Purchase Agreement and a Shareholders Agreement with
the owners of Exploenergy Srl ("Exploenergy") for the purchase of 90% of the
company's shares. Exploenergy is an Italian company which has
filed applications for two exploration licences located in the Po Valley, in
close proximity to fields discovered by the former operator; two leads have
been identified in these licences with
combined, un-risked prospective resources estimated to be in excess of 60 BCF.
Both applications are in an advanced stage of their approval process.
Exploenergy has also filed an application for a third licence which is not part
of this transaction and will be returned to the sellers once they have
established a company vehicle.
Upon the award of each licence the sellers will receive a lump sum payment,
notionally corresponding to past costs adjusted for debt, receivables and
payables, and will be carried for their 10 % holding until first commercial
gas.
Guido Michelotti, Cadogan Petroleum CEO, commented "This transaction gives
Cadogan an opportunity to apply, outside of Ukraine, our successful business
model of being an efficient operator of marginal fields. We will work closely
with the former management of Exploenergy and the Italian stakeholders at large
to complete the application process expeditiously".
The transaction represents the first step of Cadogan's strategy of reloading
and geographically diversifying its portfolio of licences. The shares of
Exploenergy will be transferred to Cadogan once the transaction has been
registered at Milan Chamber of Commerce, which is expected to occur in the next
couple of weeks.
The information contained within this announcement may contain inside
information stipulated under the Market Abuse Regulation (EU) No. 596/2014.
ENDS
For further information, please contact:
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
END
(END) Dow Jones Newswires
January 17, 2017 06:23 ET (11:23 GMT)