LONDON (Alliance News) - Cadogan Petroleum PLC on Tuesday said it has made a "substantial step" towards cash neutrality in 2016, as it focused on cutting costs in 2015.
The oil and gas company said its production from the Debeslavetska and Cheremkivska gas and Monastyretska oil licences in western Ukraine was 122 barrels of oil equivalent per day at the end of November. It did not provide comparative production levels.
Cadogan said that it believes its current in house estimation of reserves and resources may "conservatively" represent the potential of some of its western licences and has thus requested a third-party independent evaluation of its portfolio. This report is expected to be delivered in the coming weeks.
In eastern Ukraine, Cadogan continued to make progress in renewing its Pirkivska and Zagoryanska licences, which are pending approval by the Ukraine authorities. Two other licences at the exploration stage, without production, have been suspended by the Ukraine petroleum authority for two breaches of licence commitments. Cadogan said it believes these licences have been properly managed and the breaches have not occurred.
It has submitted evidence supporting this to the Ukraine authorities, and expects to have these suspensions revoked in "due course".
Cadogan said that its gas trading and services business in Ukraine have continued to perform well, and the businesses are expected to substantially supplement its free cash flows from its upstream operations in 2015, and support its strategy of becoming cash neutral in 2016.
Shares in Cadogan were untraded Tuesday afternoon at 8.00 pence.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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Cadogan (CAD)