Interim Management Statement

RNS Number : 3374S

Cadogan Petroleum PLC

18 November 2011

 



18 November 2011

Cadogan Petroleum Plc ("Cadogan" or "The Group")

Interim Management Statement for the period from 1 July to 18 November 2011

During the period under review management's focus was on operations at the Pokrovskoe and Zagoryanska license areas in eastern Ukraine, in which Eni S.p.A ("Eni") acquired interests in July this year.

Operations 

The Group continues to operate safely and efficiently. During the period two minor Lost Time Incidents were experienced due to extreme weather conditions.  Operational performance was not impacted.

Commercial production at the Zagoryanska 3 well in eastern Ukraine continued at a stable flow rate during the period under review.  A workover and testing program on three wells in the Zagoryanska field is in progress and will continue into 2012.  The Zagoryanska 1 well was recompleted in its primary target, after having investigated a secondary target. A coiled tubing unit has been mobilized to continue testing of this Zagoryanska 1 primary target interval, which is currently producing at the Zagoryanska 3 well which is located about 800 meters away. Final well performance will be assessed once the testing program is complete.

Concurrently, workovers are underway on the Zagoryanska 2 well, utilising the heavy duty workover rig. On completion of the Zagoryanska 2 program, the workover rig will be moved back to Zagoryanska 1 to complete well operations there. Following this it is planned to move the rig to workover the Zagoryanska 8 well. In addition to workovers, the Zagoranska 2012 program includes a new well, Zagoryanska 11, which is targeted at the Upper Visean

The Pokrovskoe 1 well was deepened into the Lower Visean interval which proved to be water bearing. Currently a rigless test program is underway in order to comprehensively evaluate the upper intervals of this well. The Saipem drilling rig has been moved on to the Pokrovskoe 2a location, where drilling commenced in early October and good progress is being made. The primary objective for this well is the Upper Visean interval. The depth on 17 November was 3363 meters and drilling and testing operations are expected to be concluded in Q1 of 2012. 

The 2D seismic data acquired at the end of 2010 on the Bitlyanska licence area in western Ukraine has been interpreted and the farm-out campaign for the Bitlyanska licence area will be re-activated shortly. The Borynya and Bityla fields on the Bitlyanska Licence have independently certified contingent resources of 211.54 mmboe and 113.92 mmboe respectively. 

The Group has an obligation to drill a further well on the Bitlyanksa licence and it will seek to find a partner to undertake the project in joint venture as part of the Group's continuing plan to de-risk its assets.  It is the Group's strategy to de-risk its investment in its major assets through attracting partners into its license areas.

Global Process Systems Inc . ("GPS") Payment

As previously advised payments due from GPS in 2011, totalling $30 million, have not yet been received. Although discussions continue with GPS on rescheduling the payment under the settlement agreement put in place in October 2009, the Group has commenced legal action to recover the debt. The legal title to the gas plants remains with Cadogan.

Litigation

The litigation, which commenced in June 2009, against the former Chief Executive Officer, Chief Operating Officer and certain third parties including individuals and suppliers has now been substantially concluded.

Finance

Cadogan's cash balance at the date of this announcement is £43.5 million ($68.5 million). Monthly revenue from all active fields is now running at £0.3 million per month net to Cadogan. 

Corporate and Board

There have been a number of board changes during the period under review. Messrs Dayer, Hook and Stein have stood down as directors. Mr Zev Furst has been appointed as interim non-executive Chairman and Mr Chicco Testa has been appointed as a non-executive director. It is anticipated that further appointments to complete a renewal of the Board will be announced shortly.

The Board has advised shareholders of its intention to seek to transfer its listing category on the Official List from premium to standard. A circular to shareholders was published on the 28 October 2011 and notice of a General Meeting of shareholders to be held on 22 November 2011 has been issued.

Ends

Contacts 

Cadogan Petroleum Plc		[phone]
Bertrand des Pallieres Stefan Bort	Chief Executive Officer Company Secretary
Bankside		[phone]
Simon Rothschild

 

END

 

 

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