Operational Update

Cadogan Petroleum Plc - Operational Update

PR Newswire

London, September 27

Cadogan Petroleum Plc.

(“Cadogan” or the “Company”)

Operational update

Resumption of drilling activity & results of reservoir study

Cadogan Petroleum plc. (“Cadogan”), an independent, diversified, oil & gas company listed on the London Stock Exchange, is pleased to provide the following operational update.

Drilling operations have commenced on the shallow Vovche-2 well on Bitlyanska licence. The well is designed to test the potential of satellite prospects around an established, old oil field. The well is anticipated to take 20 days to drill and will then be put on production if successful.

A heavier rig is being selected to drill the Blazh-10 well on the Monastyretska licence as planned. The well will target the Yamna sandstones, the reservoir of the three currently producing wells, at a depth of about 3,500 metres. The well is expected to spud in November and is anticipated to take three months to drill. This well will also be put on production if successful.

The Vovche-2 well and the Blazh-10 well fullfil the Company’s remaining commitments on the Bitlyanska and Monastyretska exploration licences, a prerequisite to convert them into production licences.

The Monastyretska reservoir study has been completed, as planned. The study has highlighted significant upside potential from infill drilling and the implementation of a water injection scheme. The study predicts that infill drilling can add up to 2.3 million barrels (MBbl) to the cumulative production of a do-nothing scenario with a further 2.1 MBbl coming from the implementation of water injection. Future cumulative production of a do-nothing scenario, i.e. from the three exsting wells only, is predicted to be 1.2 MBbl and is in line with the current estimation of 2P reserves.

The study has been conducted using a reservoir simulation model validated by matching the historical performances of the existing three producing wells. An assessment of the cost of the various scenarios is on-going in order to select the optimal development scheme.

Commenting, Guido Michelotti, CEO of Cadogan, said:

“We are encouraged by the results of the reservoir simulation study. It confirms our expectation of upside potential on the core Monastyretska licence and sets the direction for its optimal exploitation. The field is geologically complex, but can deliver good results if carefully studied and produced under best-in-class reservoir management, as demonstrated by our recent string of successful work-overs, post which it continues to produce at a stable rate of 212 bpd. We are also excited by the resumption of drilling operations after a pause of three years and look forward to progressing these further.”

-ENDS-

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