Ukraine: Eni Loses Confidence in Cadogan Wells

Italian Eni has advised British independent Cadogan Petroleum that it will not be exercising an option to acquire a 30 per cent stake in Pokroskvoe Petroleum following results from two of Cadogan's wells in Ukraine.

The two wells, the Pokroskvoe 1 and Pokroskvoe 2a wells, following difficulties and disappointing results on the Pokroskvoe 1 well. The Pokroskvoe 2a well faced problems last month during drilling operations when Cadogan attempted to target hydrocarbons in the lower part of the well.

Following the deepening of the well, a running string became stuck in the well while Cadogan pulled out of the well. It has not been recovered and the company is still evaluating ways to remove it.

The company said that it has been advised by Eni following examination of the results from both wells, that it will not exercise its option to increase its stake in the project by 30 per cent.

Eni and Cadogan had previously signed a deal in April 2011. Under this deal, Eni gained a 30 per cent stake in the Pokroskvoe licence as well as a 60 per cent stake in the Zagoryanska licence. Eni had an option to acquire the additional 30 per cent stake in the Pokroskvoe licence at its choosing.