Nadra of Ukraine says two Cadogan’s licenses were invalidated by a court decision

According to Interfax, Poltava Regional Economic Court invalidated the licenses of Nadra of Ukraine (Nadra) for the exploration and development of the Pirkovske and Zagoryanske deposits in Poltava region. According to the news, citing Nadra’s release, the ruling also implies invalidation of the respective licenses issued to two subsidiaries of Cadogan Petroleum (CAD LN: N/R). The lawsuit was initiated by Poltavaneftegazgeologiya (PNG), a subsidiary of Nadra and prior license holder for the two deposits, after it was recently granted prolongation of its licenses (until 2010 and 2009, respectively). Vladimir Nesterenko: Following our yesterday’s news alert on the issue, we obtained a copy of an original version of Nadra’s release. The release indeed says that invalidation of Nadra’s licenses makes the permits, issued to Cadogan’s subsidiaries, Astrogaz LLC and Astroinvest Energy LLC, invalid as well. Today we were advised by a source in PNG that it does not have any JVs or JAAs with Cadogan and its subsidiaries. It follows that now Cadogan operates a JV with a company which is not a license holder anymore. Cadogan’s shares lost 11% yesterday, which is not surprising given that these licenses account for all Cadogan’s reserves and production, and for more than half of its prospective resources. Today the company came up with a release saying that it was not aware of any issues concerning the licenses. Cadogan says it is confident in its title for the assets, JV operations with Nadra of Ukraine are continuing as normal. Currently, it is investigating the issue. According to FSA notice, the dealings were suspended today at Cadogan’s request.