Cadogan Petroleum: Interim Management Statement
Cadogan published its financial report for 2011 on 30 April 2012.
At 17 May 2012 the Group had current cash and cash equivalents of approximately $56.6 million.
The Group continues to operate safely and efficiently throughout the period.
The Group spudded a 5,160 metres appraisal well at Zagoryanska 11 on 7 March 2012. It is anticipated that Zagoryanska 11 will be completed and tested by the end of Q2 or early Q3 2012. Although results on the Zagoryanska work-overs have been delayed due to technical issues, the Group continues to test Zagoryanska 2 which was worked over in Q3 and Q4 of 2011. Zagoryanska 8 is also being worked over at present. All of these wells are close to the Zagoryanska 3 well, which continues to produce at around 31mcm/day of gas and 5 ton/day of condensate.
Initial results from the exploratory Pokrovskoe 1 well, which was deepened in 2011, and Pokrovskoe 2a well, which was re-drilled in Q4 of 2011 and Q1 of 2012, were not as positive as hoped. The indications of hydrocarbons during the drilling operations will allow Cadogan to consider options to re-enter the Pokrovskoe 2a well to assess the potential of the Upper Visean in the future.
Efforts continue to farm-out the Group’s highly attractive Bitlyanska asset in western Ukraine. The Group intends to review possible work-over projects for the Pirkrovskoe field in eastern Ukraine. Low cost analysis techniques are being reviewed for use on the Group’s producing shallow gas fields in Debeslevetska, aimed at stimulating production increases, whilst a borehole formation cleaning programme is underway at Monastyretska with the aim of increasing oil production from the existing wells.
The Group is owed $30 million by Global Process System Inc (‘GPS’) of Dubai under the settlement agreement entered into October 2009. The settlement was based on the sale of two gas plants, which were manufactured by GPS but not required by the Group. Under the agreement GPS undertook to take the plants back into stock and resell them. Cadogan retains title over the plants manufactured and is pursuing legal remedies to recover the outstanding debt, whilst continuing to assist GPS in its attempts to sell the plants.