Cadogan Regulatory News (CAD)

Cadogan Petroleum PLC

("Cadogan" or the "Company")

Updated Reserves and Resources Report

As advised during 2009, the Board commissioned an independent Reserves and Resources Evaluation of the Group's assets in Ukraine, as at 31 December 2009 (the "Report"). The Board received the Report on 22 March 2010 and the results of the Report are summarised in the tables below.

SUMMARY OF RESERVES

AS OF 31 DECEMBER 2009

SUMMARY OF CONTINGENT RESOURCES

AS OF 31 DECEMBER 2009

The most significant change in the Group's Reserves and Resources, as compared to 1 January 2009, is the reclassification of most of the Reserves in the Pirkovskoe field as Contingent Resources. Additionally, best estimate Prospective Resources of 237 bcf gas and 8.4 mmbbl of condensate are attributed to the Pokrovskoe prospect.

Despite the re-classification, the Group retains a significant level of Reserves and Contingent and Prospective Resources. Successful operations in the future (based on in-house studies underway or completed) should enable some of these Resources to be re-classified as Reserves.

The reason for this re-classification is the disappointing results of the drilling campaign conducted by the Group during 2008 and the first part of 2009, under the previous management. Although petrophysical analysis of the well log data provided very promising results, the test results failed to meet expectations. This could be a function of either reservoir characteristics or poor drilling and testing practices. At that time, the Group relied upon low-cost Ukrainian drilling rigs and testing technology, and as a result wells drilled lack mechanical integrity. During testing, the procedures applied and tools utilised were frequently insufficient to adequately perforate and stimulate the reservoir intervals. This was a conclusion of the independent report on well testing commissioned by the new management team in 2009, which was critical of and questioned many of the previous well testing practices.

There have also been some revisions to the Resource estimates in Pirkovskoe and Zagoryanska based on a preliminary interpretation of the 3D seismic data. This interpretation was carried out by the local contractor, Ukrgeofizika, and was considered to be inaccurate, as it relied heavily on the structural model based on pre-conceived geological concepts. An in-house interpretation of the 3D seismic and well data is currently being prepared.

In the new Report, Reserves are only assigned to the currently producing fields, specifically Pirkovskoe, Debeslavetska and Cheremkhivske. Sloboda Rungurske field is excluded, as production is currently considered uneconomical, pending further analysis.

Contingent Resources are assigned to Pirkovskoe, Zagoryanska, Boryna and Bitlya fields, where development is contingent on further appraisal. The positive revision of 904.8 bcf in the Contingent Resources category comprises 583 bcf of reclassified 3P reserves from Pirkovskoe field plus 321.8 bcf of additional contingent resources from the Boryna field and the Zagoryanska field.

Prospective Resources are attributed to Pokrovskoe, where there has not yet been a production test.

The Board is considering how the report will impact the Group's financial statements, which it expects to issue in April 2010. In line with earlier announcements the Board also continues to evaluate alternative methods of maximizing value for shareholders and expects to make a recommendation early in Q2 2010.

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