Response to Press Speculation

RNS Number : 7692Z

Cadogan Petroleum PLC

24 July 2008

 



24 July 2008

CADOGAN PETROLEUM PLC

('Cadogan' or the 'Company')

RESPONSE TO PRESS SPECULATION

Further to Cadogan's announcement on 22 July 2008 concerning the press speculation regarding Cadogan's Pirkovskoe and Zagoryanska special permits ('licences'), the Company wishes to clarify the following as a result of its investigation of this matter to date:

 

 

1.       Reports that Cadogan’s interests in any of its licences have been nullified by a court ruling are incorrect.

 

2.      As a result of its investigations, Cadogan has now established that court rulings in the Poltava Regional Commercial Court (which is a court of first instance) were recently made in relation to earlier licences held by its joint venture partner NJSC Nadra Ukraine, a state-owned company ('Nadra'), in relation to the Pirkovskoe and Zagoryanska fields. Specifically, on 17 June 2008, the Poltava Regional Commercial Court made written rulings, following on from a hearing on 12 June 2008, in favour of Poltavanaftogazgeology (“PNG”), a subsidiary of Nadra, in relation to these earlier licences. The respondents in the legal proceedings were the State Geological Service and the Ukraine Ministry of Environmental Protection (the 'Ministry'), although the Ministry was not represented in court. The State Agency of Environmental Protection in Poltava Region and Nadra were named as third parties to the legal proceedings. Only Nadra was present in court as a third party.

 

3.       Cadogan was not a party to the proceedings, was not aware of them, and was not notified of them by any relevant authority. Although the court rulings were made in writing on 17 June 2008, they have not yet been made publicly available in the appropriate government registries.

 

4.       The earlier licences were obtained by PNG in 2002. The rights deriving from these licences were re-registered from PNG to its parent company Nadra during the second quarter of 2007. During the second half of 2007, these licences were further re-registered into joint ventures between Cadogan and Nadra. The court rulings declared as invalid the licences re-registered to Nadra and recognised as valid the earlier licences held by PNG. Under Ukrainian law, the annulment of any licence declared invalid by a Ukrainian court requires the subsequent approval of the Ministry.

As mentioned above Cadogan is not directly subject to the court rulings. Neither the Ministry nor any other governmental or regulatory body has taken any action against Cadogan in pursuance of the court rulings. Cadogan has been advised that new legal proceedings would need to be brought against Cadogan and would need to succeed before Cadogan's interests in its licences would be affected.

As an interested party, Cadogan has commenced legal proceedings with a view to challenging the court rulings referred to above and will take all such measures as it considers necessary to protect its interests in the fields. Cadogan does not believe there are reasonable grounds upon which claims seeking to contest its title to its licences can successfully be made. The Company is continuing to investigate the situation as a matter of utmost importance in conjunction with its legal advisers.  

On 22 July, dealings in the Company's ordinary shares were temporarily suspended as a result of the uncertainty over the alleged court rulings reported in the Ukrainian media, which contained a number of inaccuracies and misleading comments. The Company has now established the facts above and in the light of this information and the steps the Company intends to take to seek satisfactory resolution of this matter, the Company has requested the FSA to restore its listing and dealings in its ordinary shares.  This is expected to occur by 8am today or soon thereafter. 

The Company's operations across its entire asset base continue as normal and it remains focused on achieving its stated operational targets.

Mark Tolley, Chief Executive of Cadogan, commented:

'The results of our initial enquiries support the confidence of Cadogan's Board in the validity of our licences and as today's announcement illustrates, we are working towards resolving this matter.

'Moreover our operations continue on track and we remain resolute in delivering on our strategy of building domestic production and commercialising gas reserves in Ukraine. 

'Cadogan has spent several years building our business in Ukraine, investing significant sums in our portfolio of assets and a Ukrainian employee base of over 350 people. Throughout our time operating in the country, we've enjoyed strong support and partnership in Ukraine. 

We look forward to continue working together with our partners and successfully resolving this matter.'

Enquiries:

Cadogan Petroleum	[phone]
Mark Tolley
Peter Biddlestone
Pelham PR
James Henderson	[phone]
Alisdair Haythornthwaite	[phone]
Evgeniy Chuikov	[phone] / [phone]

 

END

 

 

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