Cadogan Petroleum plc (LON:CAD) said its application for a 20- year production licence for the Zagoryanske field in Ukraine has not been approved by the local authority due to an ongoing dispute over the distribution of royalties.
The Poltava Regional Council has not approved a licence application since January 2016. The latest rejection follows a request of resubmission due to legislative change in the award process and comes three years after the original filing.
Since then, the original documents submitted have become invalid and cannot be resubmitted due to the Company no longer being the licence holder. The company has lost its right to apply for the licence after the three-year period.
Cadogan said it has reviewed the available options and decided it is not in the company’s interest to challenge this rejection or re-submit the same application again.
“We wrote down the value of the asset in 2013 and this news has no impact on the Company’s balance sheet,” said chief executive Guido Michelotti.
“Though the news is frustrating, our focus remains on delivering value from the company’s producing licences and other reserves potential in Ukraine, while also continuing with our wider strategy to reload the asset portfolio across different geographies.”