Operations Update

CADOGAN PETROLEUM PLC Operations Update Deb 15 well located in the Debeslavetska Exploration licence spudded-in on 28thNovember 2014 and drilling down to 404m was completed on 26th December 2014.The main targets in this unexplored area were initially the productive levelsin the Badenian sequence (levels from B1 to B4) and possible sandy levels inthe Cretaceous. The trapping mechanism in the Badenian is mainly stratigraphic,potentially in combination with structural pinching out forms, where sandlevels are encompassed in a shale sequence. Analysis continues but so far the results suggest that the level B1, where thebiggest DHI and AVO anomaly was highlighted, was not encountered due to thesub-optimal well surface location (driven by logistics due to temporarymoratorium on industrial uses of agricultural areas), while B2 was foundreduced and truncated against the erosional channel surface running in thenorthern part of the field, probably just in opposition to the Cretaceouslimestone. The B3, B4 and B5 intervals were found to be overlapping withwater-bearing Cretaceous limestone, encountered earlier than forecast. The target levels of B2 and B3 were found to be water saturated due to themissing seal of the truncated levels against the water-bearing Cretaceousformation. However our analysis suggests that a new partially gas saturatedinterval, detected by logs and encompassed in levels B4 and B5, could beprospective in the upper structural position. Results logged during drillingshowed a reasonable gas saturation with a reasonably large interval of gasshows. However, in spite of the positive evidence of hydrocarbons, the testresult was water. Further investigation and a detailed interpretation of thischannel in the up-deep direction is required. From the collected water sample,water salinity was found to be very low and therefore impacting on the watersaturation computation. Bearing these results in mind, the Company hastherefore decided to plug and abandon the Deb 15 well. Despite the disappointing results, the Company's positive view of the Debexploration area potential remains unchanged. Additional information however isrequired for refined planning of future drilling in the Debeslavetska License. The Company also notes that the Ukrainian government has passed an amendment tothe Tax Code of Ukraine that, among other things, has extended certain changesin the production tax rates for hydrocarbons that were originally implementedto apply from 1st August to 31st December 2014 as a temporary measure. Wellsproducing from horizons at depths of 5,000 metres or shallower were, and willnow continue to be, subject to production tax rate of 55% and 45% on naturalgas and oil/liquids respectively. Wells producing from horizons deeper than5,000 metres were, and will now continue to be, subject to rates of 28% on gasand 21% on oil/liquids. The original amendment to production tax rates also included a coefficient of0.55 to be applied against the production tax rate for wells put on streamafter 1st August 2014, for the first two years of production. The latestamendment to the Tax Code of Ukraine does not include this coefficient and theCompany awaits clarification as to whether the coefficient continues to apply. Enquiries: Cadogan Petroleum Plc +380 (44) 591 0390Bertrand des Pallieres Chief Executive OfficerLaurence Sudwarts Company Secretary Cantor Fitzgerald Europe +44 (0)20 7894 7000David PorterRichard Redmayne