Cadogan Regulatory News (CAD)

4 Aug 2008 07:00



4 August 2008

CADOGAN PETROLEUM PLC

("Cadogan")

LICENCE UPDATE

Cadogan today provides a further update to its announcements on July 22 and 24 2008 regarding speculation surrounding its Pirkovskoe and Zagoryanska special permits ("licences").

Cadogan submitted appeals against the 17 June 2008 decisions of the Poltava Region Commercial Court to the Kharkiv Appellate Administrative Court and hearing dates have now been set for 13 August 2008 (in respect of Pirkovskoe) and 20 August 2008 (in respect of Zagoryanska). At these hearings the Kharkiv court will decide whether to allow Cadogan to appeal against the Poltava court's decisions as Cadogan was not party to the original ruling and only became aware of it after the expiration of the appeal period. 

Cadogan has learned that on 28 July 2008 the Ministry of Environmental Protection of Ukraine (the "Ministry") issued orders, making reference to the decisions of the Poltava Region Commercial Court on 17 June 2008, in favour of Poltavanaftogazgeology, a subsidiary of NJSC Nadra Ukraine, declaring invalid Cadogan's licences for its Pirkovskoe and Zagoryanska fields. Cadogan has been advised that the Ministry had no legal foundation for declaring Cadogan's licences invalid on the basis of those court decisions, inter alia, because Cadogan was not the subject of those court proceedings. As such, Cadogan immediately took the following action to protect its licences:

(1) On 1 August 2008, Cadogan obtained an injunction from the Poltava District Administrative Court which prevents its licences being nullified in pursuance of the orders of the Ministry until the resolution of the administrative case in court (this injunction is subject to a right of appeal by those affected within five days of the ruling);

(2) On application by Cadogan, the General Prosecutor of Ukraine issued a Protest on 28 July 2008, stating that the Ministry's actions are unlawful, suspending the effect of those actions and requiring revocation of the Ministry's decisions in respect of Cadogan's licences. The Ministry is required to consider its actions and to report its responses to the General Prosecutor within 10 days. The General Prosecutor is empowered by statute to issue a Protest if he believes that there has been a violation of the law. 

Applications have also been made to the Kiev District Administrative Court to seek redress.

Cadogan continues intensively to make representations at all levels in the government for a speedy and successful resolution to this issue.

Mark Tolley, Chief Executive of Cadogan, commented:

"Cadogan is making progress in driving forward our preventive actions in the Ukrainian Courts and reiterating the legitimacy of our interests in the two licences in question. We believe that the current issues are not motivated on broader policy grounds, and the actions by the court in Poltava and the General Prosecutor support our position that the original rulings were incorrect and the Ministry's decisions were unlawful. Importantly the actions are not impacting our operations, and we continue to progress our active drilling programme, targeting up to six key wells reaching target depth by the end of the year across a number of licences."

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