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Cadogan Petroleum's fortunes on the up as production rises

In Ukraine, the Group’s assets are located near to Poland and Romania
Ukraine oil well
Cadogan's licences are in Ukraine near Poland and Romania
  • Ukraine-focused oil and gas producer with rising production profile

  • Exit rate of production in 2018 well above forecasts at 274 barrels per day

  • Drilling underway at new well, Blazh-10, on Monastyretska licence

  • Cash holdings of £32mln compared to market value of £19.5mln.


What it owns

Cadogan Petroleum PLC (LON:CAD) holds working interests in four conventional gas, condensate and oil exploration and production licenses located in Western Ukraine and a 90% interest in Exploenergy, an Italian company, which has filed applications for two exploration licences in the Po Valley, in Northern Italy.

In Ukraine, the Group’s assets are located near to Poland and Romania in the prolific Carpathian basin and the opposite side to the zone of military confrontation with Russia.

The four licences (Monastryetska, Bytlyanska, Debeslavetska and Cheremkivsko-Strupkivska) are all operated by the group and produce oil and gas.

The agreement to sell the Debeslavetska and Cheremkivsko-Strupkivska gas fields to local group Nadra Ukrayny is awaiting state approval. Debeslavetska is currently producing around 58 barrels equivalent per day.

Monastyretska’s oil production has increased nearly five-fold over the last couple of years.

Reserves (2P) for the four fields amounted to 2.22mln barrels at end 2017, most of which was at Monastyretska.

Licences (30 June 2018)

Interest (%)                  Licence Expiry                          Licence type

99.8      Bitlyanska          December 2019             E&D

99.2      Monastyretska   November 2019             E&D

99.2      Debeslavetska  November 2026              Production

54.2      Cheremkhivska May 2018 Expired. Pending extension approval


How is it doing

Cadogan exited 2018 with a production rate of 274 barrels of oil equivalent per day, marking a better-than-anticipated performance for the year.

Average production measured 250 boepd for the whole of 2018, which was 25% better than the company targeted and represented a 61% improvement from 2017.

That was despite the Cheremkhivske gas field being shut-down in May, as a production licence extension was delayed.

Cadogan noted that its production was sold at an averages price of US$52 per barrel of oil equivalent, some US$10 per barrel more than in the preceding year.

Blazh-10 will be drilled down to a target depth of around 3,500 metres targeting the Yamna sandstone reservoir which produces in the three online wells in the licence.

In all, Blazh-10 drilling is expected to last for around three months.



Revenues increased to US$5.3mln in the first half of 2018 (US$5mln, December 2017: $15.1mln).

Production income doubled to $2.1 million as volumes increased and the average realised price rose 34%.

Gas trading income decreased to $3.1mln (30 June 2017: $3.9mln)

Net cash rose to $41.4mln from $37.6mln at end 2017.


What the boss says

Guido Michelotti, chief executive

“2018 represents an important milestone in the transformational journey of Cadogan.

"Years of successful effort to asses and extract the value of its legacy licenses, to re-engineer its organization and to monetize previously impaired items have reshaped Cadogan and reset its foundations.

"The company has refocused on the West of Ukraine and can look with confidence to a future as a profitable operator with a positive operating cash-flow.” 


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