Operational Update

Source Press Release
Company Cadogan Petroleum PLC 
Tags Strategy - Corporate, Strategy - Upstream
Date January 16, 2019

Cadogan Petroleum plc (“Cadogan”), an independent, diversified oil & gas company listed on the main market of the London Stock Exchange, is pleased to provide the following operational update.

Exit net production in December was 274 boepd. Net production for 2018 averaged 250 boepd, which is approximately 25% above the production target announced for the year and 61% higher than the average production in 2017. The net average 2018 production result is despite the Cheremkhivske gas field being shut-down in May, due to the award of the extension of the production license being delayed.

The increase in 2018 production was again delivered in an incident free working environment and with a further reduction of emissions into the atmosphere. Emissions reduced from 24.1 tons of CO2,equiv/boe in 2017 to approximately 16.2 CO2,equiv/boe in 2018. In absolute terms, 2017 emissions were exceeded by only 118 tons of CO2,equiv, notwithstanding the 61% increase in production and the resumption of drilling operations.

Production was sold at an average price of 52 $/boe, which was 10 $/boe higher than in the previous year and generated (unaudited) revenues of $4.8 million, being a 98% year on year increase. Aggregated revenues from production, gas trading and the Company’s oil service business in 2018 is expected to be marginally lower than in the previous year, owing to lower volumes of gas traded. The Company also recovered additional cash from previously impaired items.

During the year, the Company worked to secure its two key licenses in the West of Ukraine. Following the drilling on time and budget, well Vovche-2 on the Bitlyanska license is being monitored and prepared for flow tests in order to assess whether it is a good candidate for pilot production, thus completing the original work program of the exploration phase.

The Blazh-10 well on the Monastyretska license spudded in early January 2019 and drilling is ongoing; the first casing has already been set at about 400 meters depth. Spudding of the well occurred later than expected due to an extended test program at the rig’s previous location in Poland. The Blazh-10 well is targeting the Yamna sandstones, which is the reservoir of the three producing wells on the license, at a depth of approximately 3,500 meters. The well is anticipated to take approximately three months to drill and fulfills the remaining license commitment, with the commitment for pilot test production already met.

Cadogan is also pleased to confirm that the customary approvals required to execute the transaction announced on November 12, 2018, have been granted. Cadogan has received $1.715 million from Eni and is finalizing the assignment of its interest in the Debeslavetska and Cheremkhivsko-Strupkivska gas licenses to Wetstgasinvest LLC, which is now a wholly owned subsidiary of Nadra Ukrayny.

The Company has also continued to screen selective and value accretive investment opportunities, which would make use of its cash while geographically diversifying its portfolio.

Guido Michelotti, Cadogan Petroleum CEO, commented:

“2018 represents an important milestone in the transformational journey of Cadogan. Years of successful effort to asses and extract the value of its legacy licenses, to re-engineer its organization and to monetize previously impaired items have reshaped Cadogan and reset its foundations. The Company has refocused on the West of Ukraine and can look with confidence to a future as a profitable operator with a positive operating cash-flow”

Source: EvaluateEnergy® ©2021 EvaluateEnergy Ltd