Cadogan Petroleum on Wednesday won a court case that brings the small oil and gas company one step closer to being able to exploit two key Ukrainian gas fields. The company’s shares, listed on Aim, jumped 14 per cent on the news that Ukraine’s Administrative Court had repealed the cancellation of Cadogan’s licences to explore for gas in the Pirkovskoe and Zagoryanskoe fields in the country’s Poltava region.
But Cadogan’s legal battle is not yet over. Wednesday’s ruling merely allows it to go back to the local Ukrainian commercial court and appeal against its June decision to suspend the licences.
It is nevertheless important because more than 80 per cent of the company’s proven reserves lie in the disputed areas and Cadogan had already invested more than $30m in the past 10 months on the Pirkovskoe licence. It plans to invest a further $270m across its Ukrainian licences over the next two years.
Cadogan gained access to the licences last year after teaming up with Ukraine’s Nadra. But the move was contested by Poltavanaftogazgeologyto (PNG), a subsidiary of Nada, which had held the licences from 2002 to 2007.
Cadogan had an influential ally in the form of the European Bank for Reconstruction and Development, which holds a 5 percent stake in Cadogan, and was said to have played an important role in securing Wednesday’s ruling.