Tuesday, 17 January 2017

                                 Cadogan Petroleum plc                             

                             ("Cadogan" or "the Company")                          

                                  Operational update                               

    Cadogan Petroleum plc announces an update of its operational activities at its
    oil and gas fields in Western Ukraine.  Net production for 2016 averaged 116
    boepd, which is 6% higher than the average for 2015 notwithstanding the
    maturity of the producing assets; while production increased by 6%, emissions
    to the atmosphere, measured in ton CO2/boe, were further reduced by 10 % over
    2015 levels.

     The impact of this increased production on the Company's income statement is
    expected to be compounded this year by a reduction in the royalty rate for oil
    wells from 45% to 29%, which is effective as from January 1st, 2017, and by the
    expected oil production from the re-entry of two old, suspended wells in the
    Monastyretska licence. These re-entries, which are part of Cadogan's strategy
    to sustain production while minimizing capital expenditures, are planned for
    the first quarter of this year.

    Cadogan is also pleased to announce that its fully owned Dutch subsidiary has
    entered into a Sale and Purchase Agreement and a Shareholders Agreement with
    the owners of Exploenergy Srl ("Exploenergy") for the purchase of 90% of the
    company's shares. Exploenergy is an Italian company which has
    filed applications for two exploration licences located in the Po Valley, in
    close proximity to fields discovered by the former operator; two leads have
    been identified in these licences with
    combined, un-risked prospective resources estimated to be in excess of 60 BCF.
    Both applications are in an advanced stage of their approval process.
    Exploenergy has also filed an application for a third licence which is not part
    of this transaction and will be returned to the sellers once they have
    established a company vehicle.

    Upon the award of each licence the sellers will receive a lump sum payment,
    notionally corresponding to past costs adjusted for debt, receivables and
    payables, and will be carried for their 10 % holding until first commercial
    gas.

    Guido Michelotti, Cadogan Petroleum CEO, commented "This transaction gives
    Cadogan an opportunity to apply, outside of Ukraine, our successful business
    model of being an efficient operator of marginal fields. We will work closely
    with the former management of Exploenergy and the Italian stakeholders at large
    to complete the application process expeditiously".

    The transaction represents the first step of Cadogan's strategy of reloading
    and geographically diversifying its portfolio of licences. The shares of
    Exploenergy will be transferred to Cadogan once the transaction has been
    registered at Milan Chamber of Commerce, which is expected to occur in the next
    couple of weeks.

    The information contained within this announcement may contain inside
    information stipulated under the Market Abuse Regulation (EU) No. 596/2014. 

    ENDS

    For further information, please contact:

    Cadogan Petroleum Plc                                +380 (44) 594 5870

    Guido Michelotti
    Chief Executive Officer

    Marta Halabala
    Company Secretary       

    Cantor Fitzgerald Europe             +44 (0) 20 7894 7000
    David Porter