16th Sep 2005 12:42
Cardinal Resources plc16 September 2005 CARDINAL RESOURCES PLC OPERATIONAL UPDATE LONDON - Friday, 16th September 2005 Cardinal Resources plc (AIM:CDL), an independent oil and gas exploration andproduction company, today announces an operational update for the period 15thApril 2005 to 31st August 2005 in advance of its 2005 Interim Results scheduledfor release before the end of September. The information contained herein hasnot been audited and is subject to further review. Operational Overview Cardinal has working interests in two operating oil and gas fields in Ukraine -the Rudivsko-Chernovozavodske ("RC") field and the Bytkiv-Babchenske ("Bytkiv")field. Cardinal's net reserves currently stand at 18.4 MMBOE (110.6 Bscfe) andthe average daily production year to date through June 30th 2005 is 631 boepd.At the time of its admission to AIM on 15th April 2005, the company set out awork programme for the years 2005 and 2006, and beyond. An update on theprogramme's progress is detailed below. Commenting today, Robert J. Bensh, Chairman and CEO of Cardinal said:"Since the listing Cardinal has initiated its work programme. Two workovers havebeen completed, a further two are in progress, and a number of wells have beenprepared in anticipation of drilling commencing by year-end. "The political developments in Ukraine and the favourable movement of domesticgas prices to over $2.00/Mscf, compared to $1.72/Mscf at the time of the IPO,are extremely positive for Cardinal. This week the Russian and Ukrainian energyministers met to discuss tariffs for the transportation of gas and oil throughUkrainian territory in 2006. After the negotiations, the Ukrainian minister forthe first time announced that Ukraine is ready to 'work out the formula' ofswitching to European prices for gas starting in the new year. The final priceis still subject to further negotiations but this represents a major turningpoint for Cardinal. "Operating performance is in line with our expectations and we expect toannounce further encouraging developments by the end of the year." RC Field (JAA with Ukrnafta; 14.9% Net Profit Interest) • 6 wells producing• 1 workover completed; 1 well being worked over; 2 wells awaiting workover• 6 additional non-JAA wells identified for potential workover Under its JAA with Ukrnafta Cardinal has completed one unplanned workover onwell #114 which is performing in line with expectations. A second workover onwell #102 is underway and is expected to be completed within 30 days. The rigwill then proceed to the scheduled workovers on wells #100 and #109, as planned. Ukrnafta is also in discussions with Cardinal to evaluate workovers on six otherwells not included within the JAA. Rigs for the drilling of new wells are being sourced and work is expected tocommence before the end of the year. Discussions regarding the buyback of Cardinal's net profit interest in the RCfield up to 45% are progressing. Bytkiv Field (JV with Ukrnafta; 45% Net Profit Interest) • 12 wells producing• 1 workover completed• 1 well being worked over• 10 wells awaiting workover UkrCarpatOil (the JV) has completed the first of several scheduled workovers inthe Bytkiv field, resulting in an increase in the oil production rate at well #1004. The rate is expected to further increase following the installation of anew Progressive Cavity (PC) pump. UkrCarpatOil has ordered additional western-made PC pumps for its producingwells, to be delivered to the field by the end of September. The new pumps areexpected to reduce downtime and, together with re-perforating and stimulations,increase production rates. The company has commenced a re-entry of well #524, currently not producing. Thisis expected to be completed by the end of September, to be followed by acontinuous programme in the field to exploit the remaining workover potential onten more wells. One drill site has been prepared and a second is being prepared in anticipationof securing an appropriate rig to commence drilling new wells in the field. Outlook Cardinal believes it is in a unique position to participate in the consolidationof the oil and gas sector in Ukraine, as well as take advantage of increasinggas prices and the ongoing development of the domestic economy. ### Cardinal Resources plc (AIM: CDL) is an independent oil and gas exploration andproduction company in Ukraine. As an experienced operator in the country,Ukraine presents Cardinal with a unique opportunity to acquire and farm-in tooil and gas development projects accretive to reserves and production. AtDecember 31st 2004 Cardinal had net reserves of 18.4 MMBOE and a PV12% of $40.3million. Kate SpiroInvestor & Public [email protected]+44 (0) 20 7936 5258 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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