Cadogan reports 2.3x yoy production drop in 1H13

Cadogan Petroleum’s (CAD LN) net working interest hydrocarbon production fell 2.3x yoy to 90 boepd in 1H13, the company reported in its financials on August 30. Starting January, Cadogan started to account for its existing joint ventures under the equity method instead of the consolidation method.  Thus the company restated its 2012 results, including revenue, which grew 23% yoy to USD 1.9 mln in 1H13. Net loss attributable to the company’s owners dropped 3.4x to USD 2 mln for the period. The company’s net cash as of June 30 stood at USD 63.4 mln (a USD 3.4 mln decrease since May 17). The company’s shale gas joint venture, Westgasinvest, is expected to start field activity in end 2013-early 2014. Roman Dmytrenko: The drop in natural gas production and lack of significant developments at the company’s major licensed fields could discourage some investors. On the flip side, Cadogan is currently valued by the market at a discount to its net cash as of June 30, which combined with its shale gas drilling operations – to commence shortly – makes the company a speculative buy, in our view.