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Cadogan expects 'exciting' second half

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    Date: Friday 29 Aug 2008

    LONDON (ShareCast) - Cadogan Petroleum has shrugged off concerns about two of its key licences in the Ukraine and promises an “exciting second half of 2008”.

    The group slumped last month when a regional court in Ukraine ruled against the re-registration of the Pirkovskoe and Zagoryanska licences to Cadogan’s joint venture partner Nadra.

    The court said they still belong to Poltavanaftogazgeology, a subsidiary of state-owned Nadra, which obtained the licences in 2002 and re-registered them to Nadra in the second quarter of 2007.

    “We have taken measures to protect our interests in the Pirkovskoe and Zagoryanska licences and we remain confident about the validity of these licences and Cadogan's future prospects,” said chief executive Mark Tolley.

    Cadogan will get the chance to fight for its right to keep the two licences when it appears in a Ukrainian court next month.

    “Cadogan is set for an exciting second half of 2008, as the group progresses its extensive drilling programme, across four licences, and moves towards building its production base and growing its 2P reserves,” added Tolley.

    Losses widened in the six months ended 30 June from £3.8m in 2007 to £7.3m this time, but commercial production is expected to start from Pirkovskoe by the end of 2008.

    Meanwhile, Cadogan is targeting commercial production from certain wells on the Zagoryanska, Pokrovskoe and Borynya licences in the first half of next year, and from the Bitlya field in the second half of 2009.

    The firm, which raised £145m from its IPO in June and £26.5m from private fundraising, plans total capital expenditure of £99.4m during the second half of 2008.

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