Cadogan Energy Announces Half Yearly Report for the Six Months ended 30 June 2023

Source: www.gulfoilandgas.com 9/11/2023, Location: Asia

Cadogan Energy Solutions plc ("Cadogan"), an independent oil & gas company, listed on the main market of the London Stock Exchange, aiming to be a diversified energy company, is pleased to announce its unaudited results for the six months ended 30 June 2023.

H1 2023 was another semester with severe challenges caused by the invasion of Ukraine by Russia since 24 February 2022. Cadogan could not avoid the temporary shutdowns of its production during this period due to the severe constraints arisen in the Country.

H1 2023 has been another semester without LTI and TRI. All employees and assets have been secured. In H1 2023, the average production was 298 bpd in (336 bpd in H1 2022), a 11% decrease versus H1 2022. Cadogan has signed with PJSC Ukrnafta the extension of the wells Blazhiv-3 and Blazhiv-Monastyrets-3 lease contracts for a 5-year period (previous contracts were for a 3-year period) ahead the expiry period which allowed to avoid production stoppage and secure cash flows.

Cadogan completed the acquisition of the 5% of the share interest in Usenco Nadra LLC that was not yet owned by the Company and holds now 100% of Usenco Nadra LLC.

In H1 2023, the services segment was dedicated totally to supporting the production activities in Ukraine. Production entities activities together with services entity activities are presented as Exploration and Production segment results.

The production revenues decreased by 48% versus the same period in 2022, mainly due to a 36% decrease in the average realized oil price and a 11% decrease of the production volumes.

In August 2022, Cadogan was informed of the arbitral proceeding award which:
- rejected Proger's principal claim and declared that the Loan Agreement is valid and effective;
- deemed to qualify the Call Option as a preliminary contract under condition, but
- rejected Proger's claim ex art.2932 Italian Civil Code, stating that it is impossible to give an award producing the same effects of a final contract ex art.2932 Italian Civil Code,
- this because of the duties established by the rules of the London Regulatory Authority and because of the need, possibly by both parties, to comply with the due proceedings before the formalization of the entry of Cadogan into the capital of Proger Ingegneria,
- subordinated the stipulation of the final contract to the precedent completion of the proceeding and bureaucratic process as per the British rules, stating that, otherwise,
- there is the obligation on Proger Ingegneria to return the payment received under the Loan Agreement,
- compensated all the expenses of the proceeding.

Proger refused to apply the requirements of the award and thus, Proger must reimburse the amount covered by the Loan Agreement plus interest accrued in the meantime.

The cash position at the period end was $14.2 million (30 June 2022: $14.5 million). This level of cash is sufficient to sustain on-going operations.

Overall, Cadogan continued operating in an environment with tremendous challenges caused by the ongoing war in Ukraine. The Company is currently developing new initiatives to continue to improve its performance.

Key performance indicators

During H1 2023, the Group has monitored its performance in conducting its business with reference to a number of key performance indicators (`KPIs'):
to increase oil production measured on the barrels of oil produced per day (`bpd');
to decrease administrative expenses;
to increase the Group's basic earnings per share;
to maintain no lost time incident;
to grow and geographically diversify the portfolio; and
to secure its staff and operations.

The Group's performance during the first six months of 2023, 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.

Average production (working interest basis) (a)
Unit: Boepd
30 June 2023: 298
30 June 2022: 336
31 December 2022: 323

Administrative expenses
Unit: $million
30 June 2023: 1.6
30 June 2022: 1.6
31 December 2022: 3.4

Basic loss per share (b)
Unit: Cent
30 June 2023: (0.1)
30 June 2022: (0.7)
31 December 2022: (0.6)

Lost time incident (c)
Unit: Incidents
30 June 2023: -
30 June 2022: -
31 December 2022: -

Geographical diversification
Unit: New assets
30 June 2023: -
30 June 2022: -
31 December 2022: -

- Average production is calculated as the average daily production during the period/year
- Basic loss per ordinary share is calculated by dividing the net loss for the year attributable to equity holders of the parent company by the weighted average number of ordinary shares during the period
- Lost time incident relate to injuries where an employee/contractor is injured and has time off work (IOGP classification)

We confirm that to the best of our knowledge:

- the Interim Financial Statements have been prepared in accordance with the UK-adopted IAS 34 `Interim Financial Reporting';
- the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year);
- the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein); and
- the condensed set of financial statements, which has been prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer, or the undertakings included in the consolidation as a whole as required by DTR 4.2.4R.

This Half Yearly Report consisting of pages 1 to 21 has been approved by the Board and signed on its behalf by:

Fady Khallouf
Chief Executive Officer


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