Transaction on Licences

RNS Number : 9227J

Cadogan Petroleum PLC

07 July 2011

 



Cadogan Petroleum plc  ("Cadogan" or "the Company")

Transaction on two Cadogan licences in Eastern Ukraine

Cadogan is pleased to announce that its transaction with the major integrated Italian energy group, Eni S. p. A ("Eni"), completed on 6 July 2011, with the conditions precedent to the transaction having been met to the satisfaction of both parties. The transaction, which was announced on 13 April 2011, received shareholder approval at a General Meeting of the Company on 16 June 2011.

Under the agreement Eni have acquired a 30% interest in the share capital of Pokroskvoe Petroleum BV (parent company of the holder of the Pokroskvoe licence), with the option to acquire a further 30% interest in the future.  Eni have also acquired a 60% interest in the share capital of Zagoryanska Petroleum BV (parent company of the holder of the Zagoryanska licence). Both licences relate to the Group's operations in eastern Ukraine.

The consideration comprises a cash payment of USD38 million for the Zagoryanska licence, and an initial payment of USD10 million from the Pokroskvoe appraisal work programme agreed with Eni to an amount of USD36 million (including VAT). Subject to successful results from the Pokroskvoe appraisal work programme and award of production licences for both the Pokroskvoe field and the Zagoryanska field, Eni will pay the Group further amounts of up to USD90 million.

Full details of the transaction were published in a circular to shareholders on 27 May 2011 which is available on the Company's website www.cadoganpetroleum.com .  

In the interim period between announcing the transaction and completing the conditions precedent, operations have progressed on both licences. The Pokrovskoe 1 and 2 well sites have been extended to accommodate the Saipem drilling rig, which is being mobilised to the Pokrovskoe 1 location to commence drilling operations in mid July. On the Zagoryanska licence work-over operations have commenced on the Zagoryanska 1 well, located about 1 km from the Zagoryanska - 3 production well and gas processing facility. 

Ends

Contact details

Cadogan Petroleum Plc                                  + 44 20 7487 8301

Ian Baron, CEO

Gordon Stein, CFO

Stefan Bort, Company Secretary

Matrix                                                              [phone]

Robin Henshall

James Pope

Bankside Consultants                                      [phone]

Simon Rothschild

 

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