Interim Management Statement (4583W)
November 19 2010 - 2:00AM
UK Regulatory
TIDMCAD
RNS Number : 4583W
Cadogan Petroleum PLC
19 November 2010
19 November 2010
Cadogan Petroleum plc ("Cadogan" or the "Group")
Interim Management Statement for the period from 1 July to 19
November 2010
Cadogan's new management team has continued to make substantial
progress in addressing the organisational, technical, legal and
financial issues that have faced the Group. The key achievements
during the period have been:
-- Resolution of the Pirkovskoe and Zagoryanska licence
issues
-- Commencement of commercial production from the Zagoryanska 3
well
-- Recommencement of commercial production from the Debeslavtska
field
-- Completion on budget of 2D seismic acquisition programme on
the Bitlyanska licence
-- Further discussion over the farm out of the Bitlyanska
licence
-- Appointment of Gordon Stein as Chief Financial Officer
-- Appointment of Alessandro Benedetti and Bertrand des
Pallieres as non-executive Directors
-- Appointment of Matrix Group as sole broker and financial
adviser
Operations
The Group continues to operate safely and efficiently and the
HSE statistics recorded no Lost Time Incidents during the period of
this statement. In September 2010, Cadogan recorded 2 million man
hours since the last Lost Time Incident.
During the period commercial production commenced from the Upper
Visean V-18 zone of the Zagoryanska 3 well in eastern Ukraine.
Production continues at flow rates of approximately 50 mcm/day of
gas with 10-15 cubic metres per day of condensate.
At Pokrovskoe 1 drilling continues and the well is now past the
5,200 metre point on the way to a targeted total depth of 5,800
metres. The well is being directionally drilled to test the high
point of a structural closure mapped at the Lower Visean, V26
horizon on the 3D seismic.
The programme to drill a further three wells on the shallow
Debeslavtska gas field is underway, with the second well currently
being drilled. Production from all three proposed sites is not
expected to occur until Q1 of 2011 following testing, completion
and hook up of the wells to the existing gas processing and
compression facilities.
The 2D seismic acquisition programme on the Bitlyanska licence
has been concluded on budget and on schedule, and the data acquired
is currently being processed. The quality of data, which was
acquired by a local contractor supervised by Cadogan staff, appears
to be excellent.
Discussions over the farm-out of the Bitlyanska license continue
with three interested parties and the recently acquired 2D seismic
is expected to contribute significant value to this effort. The
three eastern Ukrainian licences have been withdrawn from the
farm-out programme in view of the discovery and production at
Zagoryanska, the deepening of the Pokrovskoe - 1 well and the plans
to test the Pirkovskoe - 1 well.
Resolution of licence issues
As announced on 13 September 2010, Cadogan has entered into a
settlement agreement with NSJC Nadra Ukraine ("Nadra") over the
indirect licence challenge to the Group's Pirkrovskoe and
Zagoryanska licences. Both of these challenges have now been
withdrawn from the court process in Ukraine. Now that all the
conditions precedent have been met, the settlement agreement with
Nadra is scheduled to be finalised by the end of November. Once
concluded, the Group will own the Zagoryanska 3 well, which is
currently rented and producing at commercial rates, plus four
additional wells on the field for a total outlay of GBP2.0 million
($3.2 million). GBP0.8 million ($1.3 million) of this sum has
already been paid to Nadra as an advance payment. Cadogan intends
to work over some of these wells in 2011 and put them into
production.
Finance
Cadogan's cash balance at the date of this announcement is
GBP24.4 million ($39.0 million).
Following the lifting of the suspension of the Debeslavtska
field announced on 16 September 2010, production has recommenced
and revenues from all active fields in Ukraine is now running at
GBP0.63 million ($1.0 million) per month.
The average monthly cash outflow from operating and investing
activities remains at GBP0.5 million ($0.8 million). These amounts
do not include: GBP2.2 million ($3.5 million) of VAT redeemed as
bonds for net cash receipts of GBP1.8 million ($2.9 million);
income from the litigation of GBP0.28 million ($0.45 million); or
litigation costs incurred during the period of GBP0.9 million ($1.5
million).
Litigation
The Group continues its action in the High Court of England and
Wales against certain of its former officers and various related
parties. Settlement agreements have been entered into with two
minor parties during the period under review and a further $450,000
has been received by Cadogan. At the date of this statement the
Group expects to receive a payment from Global Process Systems of
$6.5 million, the next instalment of the remaining $36.5 million
due to Cadogan under the settlement agreement previously entered
into.
Ends
Enquiries
Cadogan Petroleum Plc +44 20 7811 5931
Ian Baron, CEO
Gordon Stein, CFO
Stefan Bort, Company
Secretary
Matrix +44 20 3206 7000
Robin Henshall
James Pope
Bankside Consultants +44 20 7367 8888
Simon Rothschild
This information is provided by RNS
The company news service from the London Stock Exchange
END
IMSQVLFFBFFZFBL
Cadogan Energy Solutions (LSE:CAD)
Historical Stock Chart
From Sep 2024 to Oct 2024
Cadogan Energy Solutions (LSE:CAD)
Historical Stock Chart
From Oct 2023 to Oct 2024