Operations Update

CADOGAN PETROLEUM PLC                             

                               Operations Update

Deb 15 well located in the Debeslavetska Exploration licence spudded-in on 28th
November 2014 and drilling down to 404m was completed on 26th December 2014.
The main targets in this unexplored area were initially the productive levels
in the Badenian sequence (levels from B1 to B4) and possible sandy levels in
the Cretaceous. The trapping mechanism in the Badenian is mainly stratigraphic,
potentially in combination with structural pinching out forms, where sand
levels are encompassed in a shale sequence.

Analysis continues but so far the results suggest that the level B1, where the
biggest DHI and AVO anomaly was highlighted, was not encountered due to the
sub-optimal well surface location (driven by logistics due to temporary
moratorium on industrial uses of agricultural areas), while B2 was found
reduced and truncated against the erosional channel surface running in the
northern part of the field, probably just in opposition to the Cretaceous
limestone. The B3, B4 and B5 intervals were found to be overlapping with
water-bearing Cretaceous limestone, encountered earlier than forecast.

The target levels of B2 and B3 were found to be water saturated due to the
missing seal of the truncated levels against the water-bearing Cretaceous
formation. However our analysis suggests that a new partially gas saturated
interval, detected by logs and encompassed in levels B4 and B5, could be
prospective in the upper structural position. Results logged during drilling
showed a reasonable gas saturation with a reasonably large interval of gas
shows. However, in spite of the positive evidence of hydrocarbons, the test
result was water. Further investigation and a detailed interpretation of this
channel 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 water
saturation computation. Bearing these results in mind, the Company has
therefore decided to plug and abandon the Deb 15 well.

Despite the disappointing results, the Company's positive view of the Deb
exploration area potential remains unchanged. Additional information however is
required for refined planning of future drilling in the Debeslavetska License.

The Company also notes that the Ukrainian government has passed an amendment to
the Tax Code of Ukraine that, among other things, has extended certain changes
in the production tax rates for hydrocarbons that were originally implemented
to apply from 1st August to 31st December 2014 as a temporary measure. Wells
producing from horizons at depths of 5,000 metres or shallower were, and will
now continue to be, subject to production tax rate of 55% and 45% on natural
gas and oil/liquids respectively. Wells producing from horizons deeper than
5,000 metres were, and will now continue to be, subject to rates of 28% on gas
and 21% on oil/liquids.

The original amendment to production tax rates also included a coefficient of
0.55 to be applied against the production tax rate for wells put on stream
after 1st August 2014, for the first two years of production. The latest
amendment to the Tax Code of Ukraine does not include this coefficient and the
Company awaits clarification as to whether the coefficient continues to apply.


Enquiries:

Cadogan Petroleum Plc                                    [phone]
Bertrand des Pallieres    Chief Executive Officer
Laurence Sudwarts         Company Secretary

Cantor Fitzgerald Europe                                 [phone]
David Porter
Richard Redmayne