Cadogan Petroleum plc has been notified by the license holder Westgasinvest LLC (“WGI”) that the application to renew Cheremkhivsko-Strupkivske (“Cher”) production license has not been awarded by the State Geological Service of Ukraine (“SGS”) within the expiry date of 14 May 2018.

WGI believes that SGS has not acted in line with the current legislation and is evaluating all possible options including filing an appeal in an administrative Ukrainian court. In the mean while it has asked the Production Operator, a wholly owned subsidiary of Cadogan, to halt production operations and put the facilities in preservation mode, ready to be re-started upon receiving the renewal of the license.

The impact on Cadogan of the shut-down of Cher is a loss of production of about 15 boepd (net to Cadogan)

Commenting, Guido Michelotti, CEO of Cadogan, said:
“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.