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Cadogan Petroleum increases production from key field in Ukraine

Snapshot

In Ukraine, the group’s assets are located near to Poland and Romania

Ukraine oil well

Quick facts: Cadogan Petroleum PLC

Price: 2.7 GBX

LSE:CAD
Market: LSE
Market Cap: £6.59 m
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  • Ukraine-focused oil and gas producer with rising production profile

  • New well, Blazh-10, on Monastyretska (Blazhiv) licence has flowed at 185 barrels per day, lifting production to 400 bpd daily

  • Acquired option to take 22% stake in Italian oilfield services engineering firm Proger

 

What it owns

Cadogan Petroleum PLC (LON:CAD) holds interests 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.

Cadogan has agreed to sell the Debeslavetska and Cheremkivsko-Strupkivska gas fields to local group Nadra Ukrayny.

It also agreed to sell the Gazvydobuvannya legacy asset for US$2.8mln.

Monastyretska’s (Blazhiv) oil production is expected to restart soon after a new 20-year production licence was awarded in December.

Production has increased nearly five-fold over the last couple of years. It is set to double again following the successful drilling of the latest development well, Blazh-10.

How it's doing

Net production grew by 15% last year, even after a 30-day shut down for certain operations during the fourth quarter.

Net production came in at 288 boepd for the year, representing a 15% increase from 2018 and an 89% rise on 2017.

The Blazhiv oil field (previously referred to as the Monastyrestka license) was down for 30 days across November and December.

Proger

Cadogan has also acquired an indirect option over industrial group Proger Ingegneria through the provision of a convertible loan up to the value of €13.4mln.

The option can be exercised at any time between the sixth and 24th months following the execution date of the loan agreement.

Cadogan also has the right to designate two out of the seven directors.

In exchange for providing the loan, Cadogan has a call option to buy 33% of the participating interest that PMP has in Proger Ingegneria, giving it an indirect 22% interest in Proger. 

 

Inflexion points

  • Results from Proger and benefits from companies working together more closely in future
  • Production from Blazh-10 stabilises at a good rate
  • Fady Khallouf has taken over from Guido Michelotti as the company’s chief executive

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