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