Business
Operational Review
Operational Review.
About this update from Cadogan Energy Solutions Plc
[{"type":"text","content":"\n RNS Number : 0848U Cadogan Petroleum PLC 18 June 2009 \n \n18 June 2009\n\n\nCadogan Petroleum plc \n('Cadogan' or the 'Company')\n\nOutcome of strategic and operational review\nDirectorate change\nPotential accounting restatement\n\n\nAs previously announced, following Ian Baron's appointment as Interim Chief Executive on 19 March 2009, the Board of Cadogan Petroleum plc (the Company) requested that he undertake a review of the Company's strategy and operations (the 'Review'). Although the Review remains ongoing the Board is able to report its preliminary findings.\n\nSummary of the outcome of the Review\n\nThe Review confirmed that the Company has been unsuccessful to date in capitalising on the potential of its asset base in the Pokrovska (Pok), Pirkovskaya (Pirk) and Zagoranska (Zag) licence areas in eastern Ukraine and the Bitlayanska (Bit) licence area in western Ukraine. Despite significant resource commitment, well tests in eastern Ukraine have not been encouraging to date, with test flow rates lower than anticipated in all three fields and high decline in test flow rates on Pirk and Zag. It is not clear whether these results are due to fundamental reservoir characteristics or to the inability of the local rigs to drill wells to the standard required or to other operational difficulties causing the tests to be misleading. Nevertheless the results to date leave a significant question as to the potential of the fields in eastern Ukraine.\n\nOver the last three months a number of actions have been taken to reduce expenditures while the Review has been underway. These initiatives include reducing the number of active drilling units from 5 to 1 and reducing headcount by 27 per cent. Drilling has continued only on the Borynya 3 well, which has encountered positive gas indications through limited duration drill stem tests. \n\nThe Review reached the following key conclusions:\n\n\n\nThe Company needs to identify the primary reasons for the poor test results on the wells in eastern Ukraine. This requires further data analysis to ...