Drilling Update

RNS Number : 8475Y

Cadogan Petroleum PLC

11 July 2008

CADOGAN PETROLEUM PLC

('Cadogan' or the 'Company')

DRILLING UPDATE

Cadogan (LSE: CAD), an independent oil and gas exploration, development and production company with onshore gas and condensate assets in Ukraine, is pleased to provide the following operational update.

o The Pirkovskoe-1 well has reached its Total Depth (TD) of 5,630 metres

o coring and logging data has indicated net pay of over 65 metres across three zones

o the reservoir characteristics have exceeded the management’s expectations, providing upside potential for production rates and Resources to Reserves conversion

o Preliminary well testing has been carried out on Pirkovskoe-460 and the well has been tied back to the Company’s production facility

o acid stimulation treatment will now be carried out which is expected to lead to the Company achieving or exceeding the forecasted levels of production

o The Borynya-3 well has encountered unexpected gas shows at shallow intervals during drilling providing support to the management’s view that the principal targets will be hydrocarbon charged

o The Pirkovskoe-2 well currently drilling at a depth of 3,876 metres with an expected TD of 5,800 metres

o The Pokrovskoe-1 well currently drilling at 3,922 metres with an expected TD of 5,450 metres

o Testing will commence shortly on the Pokrovskoe-2 well, the first exploration well on the Pokrovskoe structure

Mark Tolley, Chief Executive Officer, commented:

'We are very pleased to have reached TD on Pirkovskoe-1 and to have already identified net pay in a fault block which currently only has prospective resources attributed to it. Furthermore, we have made clear progress by tying back Pirkovskoe-460 into our production facilities ahead of an acid stimulation programme. We are also very encouraged by the hydrocarbons encountered in both the Borynya-3 and Pokrovskoe-2 wells. This drilling update represents the first steps in building our production profile and moving prospective resources into the Proven and Probable Reserves category.'

Enquiries:

Cadogan Petroleum	+44 207 245 0801
Mark Tolley
Peter Biddlestone
Pelham PR
James Henderson	+44 20 7743 6673
Alisdair Haythornthwaite	+44 20 7743 6676
Evgeniy Chuikov	+44 20 3008 5506

FURTHER INFORMATION

EASTERN UKRAINE LICENCES

Pirkovskoe Licence

Pirkovskoe-1

This well has reached its TD of 5,630 metres at the base of the Carboniferous Tournasian T2. It will now be completed and put on long-term production test.

The Pirkovskoe-1 well is the first appraisal well in the Pivnichna fault block in the northern part of the Pirkovskoe licence which was tested earlier this year in the Upper Visean V16/V17 horizons. The key objectives of the well are to demonstrate the presence of hydrocarbons, reservoir productivity and well drainage area in a series of objectives in the Upper Visean, Lower Visean and Tournasian formations and to convert the prospective resources to reserves.

Intermediate casing was set at 4,800 m and a well test was carried out on the V16/17 formations. This test produced gas and light oil at rates of 100 barrels of oil per day and up 1.78 million cubic feet of gas per day. The well-test demonstrated an increase of the drainage area per well from 650 metres to 1,000 metres and confirmed expected flowrates from the Upper Visean horizon.

During drilling of the current section of the well at 5,495 metres a drilling break was encountered and an unexpected high pressure gas influx entered the wellbore, requiring the drilling mud weight to be increased from 1.35 to 1.56 sg. The estimated reservoir pressure of the formations at the present drilling depth is calculated at 12,700 psi.

Data acquired from coring and logging indicates approximately 20 metres of net pay in the Upper Visean, 31 metres of net pay in the Lower Visean and 16.5 metres of net pay in the Tournasian. Porosities in the order of 10 %, and hydrocarbon saturations of 55-73 % have been observed.

Pirkovskoe-460

Cadogan has completed initial well testing of the Pirkovskoe- 460 workover well as part of its Pirkovskoe field development programme obligations.

During a 5 day well test, Pirkovskoe-460 flowed the Lower Visean horizon at approximately 5,400 metres at a stabilised rate of 0.74 million cubic feet of gas per day, 74 barrels of condensate per day and 9 barrels of water per day, with a wellhead flowing pressure of 630 psi through a 18/64 inch choke. The well has been tied back to the Company's production facility via a 10 km flowline.

The well is being prepared for a coiled tubing acid stimulation treatment to remove formation damage created during original drilling and workover attempts prior to Cadogan's acquisition of this asset.

Pokrovskoe Licence.

The Pokrovskoe-2 well is the first exploration well on the Pokrovskoe structure with a planned TD of 5,400m. The main objective of this well is to determine the productivity of the Lower Visean (V24, V25 and V26) formations and to convert prospective resources to reserves.

Whilst drilling the secondary objective (Upper Visean V 20-22 formations) at around 4,900 m a high pressure gas influx entered the wellbore requiring the mud weight to be increased from 1.25 to 1.50 sg to control the well. Intermediate logging confirmed 23 metres of net pay in the V21-22 zones with a further 32 m of net pay in the V15-18 formations. Intermediate casing has been set at 4,950 m and Cadogan is preparing to well test the V21-V22 formations.

WESTERN UKRAINE LICENCES

Bitlyanska Licence

Borynya-3

This well is currently at a drilled depth of 1,992 metres and preparations are being made to core the sandstone reservoir interval in the Golovetska formation in the Oligocene. Gas was unexpectedly encountered in this second thrust unit at 1,980 metres with up to 70,000 ppm (7 %) of gas recorded in the drilling mud which resulted in a reduction of mudweight from SG 1.24 to 1.04. These results indicate that the structures being drilled are gas charged and provide support to the expectation that the principal targets will also be hydrocarbon bearing.