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Cadogan Petroleum updates on licence delay in Ukraine

Production must now be shut-in at the Cheremkhivsko-Strupkivske field whilst licensing is secured

oil and gas operations
It will have a 15 boepd impact net to Cadogan

Cadogan Petroleum Plc (LON:CAD) said in a statement after Tuesday’s market close that operations will have to be shut-in at the Cheremkhivsko-Strupkivske (also referred to as  ‘Cher’) production licence in Ukraine.

The company said it had been notified by its partner and the licence holder Westgasinvest LLC (WGI) that an application to extend the licence had now been cleared by the State Geological Service of Ukraine before the May 14 expiry.

It highlighted that WGI believes that SGS did not act in line with legislation and its now evaluating the options including an appeal in a Ukrainian court.

WATCH: Cadogan Petroleum anticipating substantial growth in production

In the meantime, production must halt and the facilities have to be put into ‘preservation mode’.

The impact to Cadogan is said to be about 15 barrels oil equivalent production per day.

“The delayed approval of the application to renew Cher license will have a limited impact on Cadogan’s p/l given the marginal production volume involved and the current severe taxation regime,” said Guido Michelotti, Cadogan chief executive.

In a recent update, Cadogan confirmed it produced a total of 56,516 barrels oil equivalent in 2017, up 33% from 42,495 boe in 2016.

Quick facts: Cadogan Petroleum PLC

Price: 2.75 GBX

LSE:CAD
Market: LSE
Market Cap: £6.71 m
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