Interim Management Statement

CADOGAN PETROLEUM PLC - Interim Management Statement

PR Newswire

London, May 17

17 May 2013

Introduction

Cadogan published its Annual Financial Report for 2012 on 25 April 2013.

Financial position

At 17 May 2013 the Group had current cash and cash equivalents of approximately$66.8 million.

The Group continued to operate safely and efficiently throughout the period.

As outlined in the Annual Report in the Chairman's Statement and ChiefExecutive's Review (and as notified on 25 April 2013), in 2012 the Companyoverhauled its technical operations and sub surface exploration teams in lightof disappointing results on its Pokrovskoe and Zagoryanska licences. Followingcompletion of that process we continue to re-focus our operations on thoselicences where management believes that new and potentially economically viableprospects exist.

Rig site preparation to re-enter the Borynya 3 well is almost complete and theGroup's Astro Service rig is expected to be ready on location at the beginningof June. The gas shows, evident from previous logging and drilling data, areencouraging albeit further work will be needed to ascertain the commercialviability of the prospect. On the Monastyretska licence in Western Ukraine,operations at the Blazhiv 1 well continue to demonstrate positive results.After an initial period of production at 5 cubic metres per day, the well isnow stabilised at 3.5 cubic metres per day and an evaluation for furtherimprovement, as well as the re-entry of a further two wells, is ongoing. In Zag3 an intervention to open the V19 level to production was completed but testingdid not produce gas at a commercial rate. V18 produced gas at a low rate and weare in the process of evaluating a rig-less chemical wash intervention toenhance production. Work with our joint venture partner Eni on assessing theZagoryanska and Pokrovskoe licences continues. In general our Ukrainianoperations in 2013 are expected to focus on shallow prospects in our westernassets that require less capital intensity than our eastern, deep prospects.

Shale Gas

Studies are ongoing on our 3,800 acre position in the Lviv Basin, with the aimof defining the best area to start the operations for the first explorationwell.

As previously announced, Cadogan has reached a settlement with Global ProcessSystems LLC ("GPS") by way of an Agreement with GPS for the purchase of two gasprocessing plants for the sum of $29.5 million. The completed sale represents afull and final settlement of all claims and liabilities between the twoparties.

Partly in order to remedy what we perceive as a shortage of adequate investmentin technical services in the Ukrainian oil and gas sector, Cadogan has investedlimited resources in oilfield services in Ukraine. This initiative hasgenerated over US$500,000 gross revenues for the Group in the past 6 months andwe expect this trend to continue and even increase over time. We are currentlyassessing a number of alternatives to facilitate accelerated growth in thisdeveloping business area.

Cadogan Petroleum Plc +380 44 584 4979

Bertrand des Pallieres

Chief Executive Officer

Cantor Fitzgerald Europe +44 (0) 20 7894 7000

David Porter

Richard Redmayne

Bankside Consultants +44 (0) 207 367 8888

Simon Rothschild