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Update: Cadogan recovers from early scare

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By Lee Wild

Date: Wednesday 18 Jun 2008

LONDON (ShareCast) - Cadogan Petroleum came under selling pressure Wednesday as the Ukraine focused oil and gas firm traded in London for the first time having raised £139m.

It sold over 66.4m shares through a global offer at 230p each, but the price soon slipped 17% to 190p before recovering almost as quickly to steady at around 215p, valuing the business at £497m.

The slip might have given chief executive Mark Tolley a scare as the initial sell-off knocked more than £1m off the value of his £6m stake.

Cadogan, which ran up £11m of expenses in getting the float away, plans to use the net proceeds to pursue its field appraisal, exploration and development drilling programme.

It also wants to put some of the cash towards financing the business until it can fund its future cash requirements from internally generated cash flow.

The group has significant working interests in 11 licence areas covering 14 fields in Ukraine and, as at 31 January 2008, had proved and probable net reserves of approximately 80.4m barrels of oil equivalent.

Alternative investment fund Altima Partners’ 8.5% stake makes it Cadogan’s biggest shareholder, with HBK Master Fund and US hedge fund QVT Financial holding 7.1% and 6.2% respectively.

Admission is expected to become effective and unconditional dealings to begin on 23 June.

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