Cadogan Energy Solutions Plc
("Cadogan" or the
"Company")
This announcement contains inside information as defined
under the Market Abuse Regulations n. 596/2014
Cadogan Energy Solutions plc
("Cadogan"), the London Stock Exchange listed independent company
is pleased to provide the following operational update post year
end.
2023 remained a highly challenging year
for Cadogan due to the ongoing war situation in Ukraine and its consequences on the
operational activities of the Company in the Country.
Despite these difficulties, the Company
has been able to ensure the safety and the security of its
employees and assets in Ukraine.
The Company could not avoid
temporary shutdowns of its production during the Q1 2023 due
to the severe constraints arising in the
Country. The
oil production grew by 1% above 2022 levels. In 2023, the
net oil production was 119,057
bbl corresponding to an average of 326 bpd.
In 2023, the Company continued focusing on the subsoil study
of Blazhiv field. Following the works on 2D seismic data processing
and reinterpretation done in 2022, the Company conducted and
completed full hydrodynamic surveys of Blazhiv-1, Blazhiv-3,
Blazhiv-Monastyrets-3 and Blazhiv-10 wells, and updated the
hydrodynamic model as well as the production indicators. In the
second half 2023, the Company launched a new assessment, by an
independent expert, of hydrocarbon reserves according to PRMS
standards. This assessment is expected to be completed by the end
of February 2024. The results will be
presented in the Annual Financial Report 2023.
Cadogan has signed with PJSC Ukrnafta the extension of the
lease agreement, for the wells Blazhiv-3 and Blazhiv-Monastyrets-3,
for a 5-year period (previous contracts were for a 3-year period).
This was done ahead the expiry period which allowed to avoid
production stoppage and secure cash flows.
The Company completed the acquisition of the 5% of the share
interest in Usenco Nadra LLC and now holds 100% of Usenco Nadra
LLC.
Additionally, in Ukraine,
Cadogan is expanding into the electricity generation activities
while significantly reducing
emissions to the atmosphere. The Company is currently developing
the project which consists of capturing the non-commercial
associated gas during oil production activities and using it to
generate electricity which will be sold on the grid. This project
will achieve a highly significant drop in the annual gas emissions
of Cadogan as the intensity ratio will drop from 126 to 33 tons of
CO2 e/Kboe. It is expected to be
operational in Q1 2025.
All activities were executed without LTI or TRI, with a total
of over 1,720,000 manhours since the last incident. Also, the
Company has successfully passed the latest ISO audit while ISO
14001 and 45001 certifications were re-validated by respective
authority for the new term.
Regarding the litigation between Cadogan and Proger PMP,
Proger Ingegneria, MALO and TIFS (hereinafter "Proger"), concerning
the Loan Agreement and the
reimbursement of the amounts due (principal plus interest accrued),
please find the most recent update below.
At the conclusion of the first arbitration held before
"Arbitra Camera" in Rome which had
been initiated by Proger in 2021, the arbitration award ("Award")
was rendered end of July 2022.
Cadogan introduced an appeal, still pending, before the Court of
Appeal of Rome with a next hearing
on 25 September 2025.
Meanwhile, having taken note of the content of the Award of
July 2022, Cadogan has repeatedly
invited Proger to implement the provisions of the Award.
When the invitation remained unsuccessful, Cadogan with a
formal notice contested Proger's refusal, arguing that it was in
direct contrast with the clear and unequivocal provision of the
Award, which expressly subordinates the possible transfer of
shareholdings to the prior fulfilment of the formalities required
by English law and procedures related to Cadogan as a listed
company on the London Stock Exchange; and also opposing Proger for
having behaved and continuing to behave in a manner that has made
it definitively impossible to the occurrence of the condition
precedent referred to in the above-mentioned Award. Cadogan
considers in any case impossible to enter into an enforceable
contract of the conditional preliminary contract referred to above
- the existence, classification and enforceability of which, in any
case, Cadogan disputes - so that, according to the provisions of
the aforementioned Award, the right to reimbursement of the amount
covered by the Loan Agreement has arisen in favor of Cadogan, plus
interest accrued, an amount of which Cadogan then demanded
immediate payment.
Last November 2023, Cadogan had
to initiate a second arbitration to assert its right to restitution
and obtain Proger's condemnation of the consequent
payment.
The parties are awaiting the nomination of the members of the
Arbitration Board.
In Italy, Exploenergy, which
is holding interests on the projects of Corsano and Reno Centese,
got the approval to operate in the gas sector, thanks to the
financial and technical support of Cadogan. The Ministry of the
Environment asked the two corresponding Regions to release the
permit agreement.
ENDS
About
Cadogan is an independent,
energy company, which operates an exploration and production
license in Western Ukraine,
conducts gas trading operations, and provides services to E&P
companies. The aim of the Company is to be a diversified energy
group making investments offering energy solutions and alternative
services with a lower environmental impact.
For further information, please
contact:
Cadogan Energy Solutions plc
Fady Khallouf Chief
Executive Officer f.khallouf@cadogan-es.com
Ben Harber Company
Secretary +44 0207
264 4366