Operations Update

CADOGAN PETROLEUM PLC                             

                                                                               

                               OPERATIONS UPDATE                               

                                                                               

 

In the first half of 2012, the Company finalised a complete overhaul of its
technical operations and sub-surface explorations teams, bringing in over 120
years combined experience in major IOCs, and under their supervision has
undertaken a thorough re-evaluation of its assets. The bulk of this work is now
completed and the Company has revised its list of targets for its short to
medium-term plan of activity with the focus on reducing risk and maximising the
production potential of its licences.

The Company has been able to identify new and economically viable exploration
and production potential in most of its existing licences.

The deep and challenging exploration targets in the Eastern Lower Carboniferous
play were unsuccessful since the discovered reservoirs lacked adequate
petrophysical properties for successful production. In particular, in Zag 11,
the Company completed its testing of the main producing reservoirs
(V24-V19-V18-V17) and although the presence of hydrocarbons was evident,
insufficient commercial quantities of gas were encountered due to the
inadequate properties of the tested intervals.

In order to better understand the existing exploration opportunities and fully
evaluate the assets, Cadogan has applied state-of-the-art seismic reprocessing
technology.

In Pokrovska, these efforts have already proven successful, helping to identify
three shallow depth prospects (1,400 m average), two mid-depth prospects (2,000
m average) and 3 deep prospects (4,700 m average).

In West Ukraine, three shallow depth leads have also been identified within the
Debeslavetska licence.

Analysis of the Company's assets continues and is expected to be complete
within the next three months. In the meantime the Company has undertaken
marginal, low risk and low capex activities to enhance production and support
the incremental provision of information to the Company's asset review.

On the Monastereska licence in Western Ukraine a sucker rod pump was installed
in the Blazhiv 1 well, which is showing positive results. The re-entry of
another two existing wells is under evaluation.

An intervention in the Borynya 3 well (Bitlyanska), in order to perform a long
production test on the shallower reservoirs (interval from 2,000 m down to
3,200 m) and eventually start-up early production, is ongoing.  This program is
due to commence by mid-2013.

In Zag 3 an intervention to open the V19 level to production will be concluded
by the end of February. An extension of the upper V18 interval was also
performed. 

In 2013 the Company will investigate the applicability of the InSAR technology
(radar wave measurements from satellites) to monitor shallow gas fields'
depletion through time. The first test will be in the Debeslavetska area; in
conjunction with the revised geo-mechanical models, this is expected to reduce
the drilling risk for future wells in our production licences. The Company also
expects to apply micro-seismic technology to the Bitlyanska area to further
evaluate future gas production and its relative impact in the area.

In general, the identified objectives are gas and oil bearing and belong to
shallow, medium and deep horizons. New, promising areas for investment are
already under scrutiny and the Company will report on these in due course.

                                                                                                 
21 February 2013


Enquiries:

Cadogan Petroleum Plc     [phone]    
                                              
Bertrand des Pallieres                        
                                              
Chief Executive Officer                       
                                              
                                              
                                              
Bankside                  [phone]
                                              
Simon Rothschild