Interim Management Statement

17 May 2011

Cadogan Petroleum plc ("Cadogan" or "the Group")

Interim Management Statement for the period from 1 January to 16 May 2011

Introduction

Cadogan published its financial report for 2010 on 27 April 2011. On 13 April
2011 the Group announced a significant transaction with Eni S.p.A ("Eni"), the
major integrated Italian energy company. The transaction is conditional on the
approval of shareholders and the relevant Ukraine authorities. Under the
proposed transaction Eni will acquire a 60 per cent interest in the Zagoryanska
field and an initial 30 per cent interest in the Pokrovskoe field with an
option to acquire a further 30 per cent interest in the latter. Since the
announcement good progress has been made in meeting the conditions precedent to
the transaction and Cadogan intends to issue a shareholder circular and notice
of general meeting by the end of May to seek shareholder approval to the
transaction. Completion of the transaction is on track for early July 2011.

Operations

The Group continues to operate safely and efficiently and there were no lost
time incidents during the period under review.

Commercial production at the Zagoryanska 3 well in eastern Ukraine continues
with flow rates of approximately 42 mcm/day of gas and 8 tonne per day of
condensate during the period under review. As part of the licence settlement
with NSJC Nadra Ukraine, a state-owned company, the Group purchased five deep
wells on the Zagoryanska field and the development of this field now forms part
of the agreed work plan with Eni. Suitable workover rigs have been identified
in-country and it is hoped to award a contract and commence operations on site
during Q3 2011.

The Group intends to award a drilling rig and services contract for a one-year
period to a major company operating in Ukraine. The rig will initially deepen
the Pok 1 well (suspended in December 2010) and subsequently either side-track
the existing well or drill a new well at the Pok 2 location. These operations
will be funded under the terms of the proposed transaction with Eni. Operations
at Pok 1 are expected to commence on site in July 2011.

The 2D seismic data for the Bitlyanska licence area in western Ukraine,
acquired at the end of 2010, is currently being processed. Once complete the
data will be interpreted and the results will be used to re-activate the
farm-out campaign for the Borynya and Bitlya fields on the licence area. The
Borynya and Bityla fields have contingent resources, independently certified,
of 211.54 mmboe and 113.92 mmboe respectively. The Group has an obligation to
drill a further well on the Bitlyanksa licence during 2012 and it will seek a
partner to undertake the project in joint venture as part of its continuing
plan to de-risk its assets.

Global Process Systems Inc . ("GPS") Payment

As previously advised, the payment due from GPS on February 14 of $10 million
was not received. Discussions continue with GPS on rescheduling the payment of
the outstanding $30 million due from them under the settlement agreement put in
place in October 2009. Legal title to the plant remains with Cadogan until the
final payment is made by GPS.

Finance

Cadogan's cash balance at the date of this announcement is £22.9 million ($37.1
million). Monthly revenue from all active fields is now running at £0.5 million
($0.8 million) per month.

Litigation

The litigation, which commenced in June 2009 against the former Chief Executive
Officer, Chief Operating Officer and certain third parties including
individuals and suppliers, has yet to come to trial. However, a number of
settlements have been concluded and, in the period covered by this statement,
Cadogan has received settlement cash payments totalling £4.0 million ($6.5
million), although the income was accrued in the 2010 year end accounts. The
litigation continues against the former Chief Operating Officer.

Ends

Enquiries

Cadogan Petroleum Plc                                   [phone]
Ian Baron, CEO
Gordon Stein, CFO
Stefan Bort, Company Secretary

Matrix                                                  [phone]
Robin Henshall
James Pope

Bankside Consultants                                    [phone]
Simon Rothschild