Cadogan Petroleum 2011 profit surges on license sale

Cadogan Petroleum (CAD LN) reported 2011 net profit of USD 153 mln thanks to a gain of USD 164 mln related to the disposal of its subsidiaries. In July, Eni acquired a 60% interest in Cadogan’s Zagoryanska license for USD 38 mln and a 30% interest in its Pokrovskoe license by funding a USD 36 mln work program. Cadogan’s revenue stood at a mere USD 7.0 mln (up 39% yoy) as its average production was 297 boepd (up 11% yoy) and price for natural gas amounted to USD 395/tcm (up 29% yoy). Its operating loss widened to USD 14.5 mln in 2011 from USD 12.0 mln in 2010 mainly on higher cost of sales. Cadogan’s end-2011 cash and cash equivalents stood at a comfortable USD 65 mln (up 79% yoy), which the company said was more than enough to fulfill its current work program. The company shed little light on plans for 2012, saying it would continue to invest in exploration and the appraisal of existing assets while starting investments in new areas, including preliminary exploration of unconventional gas assets.