Cadogan Announces Report for the Six Months Ended 30 June 2020

Source: www.gulfoilandgas.com 9/10/2020, Location: Asia

Cadogan Petroleum plc, an independent, diversified oil & gas company listed on the main market of the London Stock Exchange, is pleased to announce its unaudited results for the six months ended 30 June 2020.

- H1 2020 has been another semester without LTI and TRI with no cases of covid-19 infection among our employees
- Average production was 230bpd in H1 2020 (297 boepd in H1 2019), a 23% decrease versus H1 2019. This was mainly due to the shut-down during this period of the Blazhiv-3 and Blazhiv-Monastyrets-3 wells for 5,5 months.
- License authority of Ukraine (State Geological Service) rejected in May 2020 the Biltyanska 20-year exploration and production license application notwithstanding full compliance and timely submission. The Company introduced a claim before the Kiev District Administrative Court to challenge the decision of non granting the license.
- In Ukraine from January to July 2020, hydrocarbon prices decreased significantly compared to the same period in 2019, the price of natural gas decreased by more than 45% and more than 30% for oil and gas condensate.
- Cadogan decided not to sell its stored gas acquired during 2019 waiting for appropriate market prices.
- The services business continued to support the Group’activities, thus retaining funds within the Group.
- Production revenues decreased by 46 % versus the same period in 2019, due to a 33% reduction in the average realized oil price and a 23% decrease of the production volumes. Overall revenues were down by 62% versus the same period in 2019 due to the absence of sales of gas . Cost saving initiatives have been taken to mitigate the negative effects.
- As a result of the above initiatives, cash position at the period end was $11.6 million (30 June 2019: $13.7 million). This level of cash is sufficient to sustain on-going operations.

Overall, the first half of 2020 was impacted by the global impact of covid-19 pandemic, extreme price volatility in oil market, a severe drop down of gas prices, and the shut-down for 5,5 months of the production of Blazhiv-3 and Blazhiv-Monastyrets-3 wells. This affected Cadogan’s strategy in 2020 and constrained the Group to review and partly postpone its investment strategy (incl. new drilling). Looking ahead, the Company is confident that strong management and competent staff will ensure a positive outcome for the company in such uncertain and challenging environment.

Key performance indicators
During H1 2020, The Group has monitored its performance in conducting its business with reference to a number of key performance indicators (‘KPIs’):
- to increase oil, gas and condensate production measured on the barrels of oil equivalent produced per day (‘boepd’);
- to decrease administrative expenses;
- to increase the Group’s basic earnings per share;
- to maintain no lost time incident; and
- to grow and geographically diversify the portfolio.

The Group’s performance during the first six months of 2020, measured against these targets, is set out in the table below, together with the prior year performance data. No changes have been made to the sources of data or calculations used in the period/year. The positive trend in the HSE performances continues with zero incidents.


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