Range Energy Takes New Name

- Range Energy Takes New Name

Thursday, September 01, 2011
Range Energy Resources Inc.

Range Energy Resources has changed its name to Hawkstone Energy Corp. and at open of market on Thursday, September 1, 2011, its common shares will commence trading on the Canadian National Stock Exchange (CNSX) under the name Hawkstone Energy Corp. under the new trading symbol "HEC".

The new ISIN for common shares of Hawkstone Energy Corp. is CA 42034P1062.

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North Atlantic Drilling Takes Delivery of Jackup West Elara

- North Atlantic Drilling Takes Delivery of Jackup West Elara

Tuesday, August 09, 2011
Seadrill Ltd.

North Atlantic Drilling Ltd., in which Seadrill has a 75 percent ownership, has taken delivery of the new harsh environment jackup drilling rig, West Elara from Jurong Shipyard in Singapore. The rig is expected to depart Singapore on August 11th and arrive at Westcon Shipyard in Olen, Norway in early October in order to undertake final contract preparation activities. The West Elara is expected to begin operations for Statoil on a five- year contract during late November 2011.

The West Elara is the first of two Gusto MSC CJ70 150A rigs to be constructed for North Atlantic Drilling Ltd. The rig is an advanced, ultra large, harsh environment, high specification drilling unit, specifically built for Norwegian requirements and matching the specifications of the largest jackup drilling units in the world. The unit can operate in water depth up to 150 meters with a higher variable deck load and a higher operating efficiency compared to earlier generation jackups. The size of the unit allows for additional opportunities in terms of logistics, well testing and early production.

Alf C. Thorkildsen, Chief Executive Officer in Seadrill Management AS and Chairman of North Atlantic Drilling Ltd, said, "We are pleased to take delivery of the West Elara, the first of two new ultra large and harsh environment jackups to be added to the North Atlantic Drilling fleet. We look forward to seeing this new and advanced drilling unit operating on the Norwegian Continental Shelf, creating growth for North Atlantic Drilling ahead of its listing on the Oslo Stock Exchange, increasing our presence in this key region and further strengthening our relationship with Statoil, one of our most important customers."

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Commodity Corner: Oil Takes a Wild Ride

- Commodity Corner: Oil Takes a Wild Ride

Friday, August 05, 2011
Rigzone Staff
by Matthew V. Veazey

After settling at its lowest point in six months Thursday, light sweet crude oil for September delivery managed to eke out a small gain for the day.

The WTI settled at $86.88 a barrel, representing a 25-cent day-on-day increase, after a volatile trading session. The benchmark plunged to an intraday low of $82.87 on escalating debt crisis fears within the eurozone.

Italy is the latest EU country to risk defaulting on its massive public debt. Making debt service less manageable is Italy's stagnant economic growth rate. A possible Italian bailout, along with other debt restructuring initiatives elsewhere in the eurozone, has caused the region's currency to lose value; in this situation, dollar-denominated crude oil becomes a less attractive buy for investors holding the euro.

Investor sentiment brightened later Friday, however, amid reports that Italy's government plans to take steps to jump-start economic growth. The economic liberalization program reportedly includes measures such as amending the country's constitution to require a balanced budget, loosening certain employment rules, and accelerating the pace of entitlement reform.

Also giving oil a boost Friday was a U.S. Labor Department report stating that non-farm payrolls increased by 117,000 last month, beating economists' expectations. Also, the agency announced that the official unemployment rate edged downward in July by 0.1 percentage point to 9.1 percent.

The WTI peaked at $86.88 Friday. The September Brent contract price gained $2.12 to end the day at $109.37 a barrel. It fluctuated from $105.69 to $109.90.

Natural gas for September delivery ended the day flat at $3.94 per thousand cubic feet. It traded within a range from $3.90 to $3.98.

September gasoline climbed nearly seven cents to end the day at $2.805 a gallon. The front-month contract peaked at $2.82 and bottomed out at $2.68.

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GDF Suez Takes ExxonMobil's Stake Offshore Norway

- GDF Suez Takes ExxonMobil's Stake Offshore Norway

Thursday, July 28, 2011
GDF Suez

GDF Suez announced an important milestone in the development of its portfolio of exploration & production assets. The operations are located in a mature area in Norway.

The Group acquired an additional 20% share in the offshore Njord field and in Noatun discovery in Norway, from ExxonMobil Exploration & Production Norway AS. GDF Suez E&P Norge AS therefore becomes the first shareholder in this license with a 40% interest, alongside Statoil (20%, operator), E.ON Ruhrgas (30%), Faroe Petroleum (7.5%) and VNG (2.5%).

Jean-Marie Dauger, Executive Vice President of GDF Suez, in charge of the Global Gas & LNG Business Line, explained, "These [...] operations highlight the GDF Suez E&P's strategy and successful implementation: a balanced portfolio with a strong presence in mature areas, such as Njord in Norway."

The Njord area in the Norwegian Sea is very active. The North-West Flank which is part of the Njord license is currently being drilled from Njord whilst the fast track development Hyme (ex Gygrid) recently approved by the Ministry of Petroleum and Energy will be tied back to and processed at the Njord facilities. The start of the Low Pressure Production project on the Njord field in 2013 will increase the recovery rate and extend the life of the field, in production since 1997. Entered in the licence late 2000, GDF Suez intends to speed up development of other discoveries in this area, thus expanding the life time of the Njord platform then used as a hub for the area. The transaction is subject to approval from the Norwegian Authorities.

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Lukoil Takes Stake in Block Offshore Sierra Leone

- Lukoil Takes Stake in Block Offshore Sierra Leone

Wednesday, July 20, 2011
OAO Lukoil Holdings

Lukoil has acquired from the private company Oranto Petroleum Ltd. a 49% stake in the Petroleum Agreement for SL-5-11 Offshore Block in the Republic of Sierra Leone (West Africa).

The mandatory exploration program within the framework of the Agreement provides for the drilling of one exploration well before 2013.

The SL-5-11 offshore block with an area of 4,022 sq. km is located in the territorial waters of the Republic of Sierra Leone on the shelf and continental slope of the Atlantic Ocean. The water depth within the Block territory varies from 100 m to 3.3 km. 2D and 3D seismic surveys have been conducted at the block, revealing several promising structures. The block is part of the Sierra Leone - Liberia geological basin, where a number of major oil fields have been discovered during the last two years, thus proving its potential productivity.

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Eni Takes Risk; Develops Nikaitchuq Field

- Eni Takes Risk; Develops Nikaitchuq Field

Friday, July 08, 2011
Rigzone Staff
by Jaime Kammerzell

Eni began oil production at the Nikaitchuq field in February 2011. The field is located in the Beaufort Sea off the North Slope of Alaska in 3 meters of water. It is also Eni's first operated Arctic project.

Eni owns 100% interest in the Nikaitchuq field, which is a risk for the operator. The Nikaitchuq field is a marginally economic field with cold viscous crude oil. The reservoirs are about 4,000 ft TVD with long step outs. However, Eni also reaps all the benefits of its hard work. The operator estimates recoverable reserves at 180 MMbbl and expects Nikaitchuq to produce for over 30 years with peak production of 28,000 b/d. Total investment will amount to about $1.45 billion.

Field Development

In January 2004, Kerr-McGee drilled the Nikaitchuq No. 1 vertical well, which tested more than 960 b/d of 38 degree API crude oil from the Sag River Formation. Kerr-McGee then drilled the Nikaitchuq No.2 well 9,000 ft southeast of the No.1 well in March 2004 and successfully extended the accumulation down dip.

Kerr-McGee operated the NW Milne Point field with a 70% interest in 2004. Armstrong Alaska, Inc. held the remaining 30% interest.

Nearly a year later, Kerr-McGee tested the Schrader Bluff reservoir at the Nikaitchuq No. 4 horizontal appraisal well. The well tested at rates of up to 1,200 b/d and the oil tested at 16 to 17 degrees API. Kerr-McGee estimated the discovery to hold 100-200 MMboe.

Eni, which previously bought out Armstrong Alaska's 30% interest, bought out Kerr-McGee's operatorship and 70% interest in the Nikaitchuq field in April 2007.

The development plan called for 71 wells, including oil producers, water injectors, and water source/disposal wells. Eni planned to drill one-third of the wells from shore and the remainder from an artificial island to be constructed about 2.8 mi from shore in Phase 2 of the field's development.

Field development started Jan. 25, 2008. Though the operator slowed drilling and development operations in March 2009, all wells should be completed by 2014.

Eni is drilling the Nikaitchuq wells horizontally through thin layers of oil-bearing rocks. They are at 4,000 ft VD and have a horizontal reach of up to 20,000 ft. The produced oil is viscous and thick. So to speed the flow, Eni injects water from the Ivishak formation and produced water. The Ivishak water is about 195 degrees, which when mixed with the crude (about 87 degrees) will help it move through the subsea pipeline to the processing facility quicker.

Eni contracted an offshore rig for the offshore drilling pad in 3Q 2010. The offshore wells require electric submersible pumps, which are housed on the drilling pad.

Eni designed the onshore processing plant at Oliktok Point to handle sand and water as well as crude. Two process modules built in Louisiana weigh about 4,000 tons each. They will work with 22 smaller module units, built in Alaska, to treat up to 40,000 b/d of heavy crude with sand and up to 120,000 b/d of water.

A 3.8-mile-long under seabed pipeline bundle, which is the heaviest bundle ever installed in the Arctic, connects the offshore facility to the onshore facilities. Eni contracted INTECSEA to perform the Pre-FEED, FEED, detail design and construction support on the subsea flowlines. The flow line and utility bundle connect to the onshore facility at Oliktok Point. The pipleline bundle was installed in 2008 and includes an outgoing pipe that takes water to the drilling pad, a diesel line, and cables. Hot water flows out to the drilling pad through a concrete-coated pipe.

Production flowline bundle included:

• 3 phase PIP production flow line 18-inch x 14-inch
• 12-inch water injection Flow line (2-inch insulation/1-inch concrete)
• 6-inch spare Flow line (single wall)
• 4-inch x 2-inch PIP diesel line
• Fiber optic cable with bundle
• Separate fiber optic and power cable bundle

Nikaitchuq Field

Alaskan Future

In 2008, Eni won 18 exploration leases in northern offshore Alaska in Lease Sale 193.

The blocks are in the Chukchi Sea, in 30 to 50 m of water. According to the company, this area possesses a high exploration potential recognized by several oil majors who competed for the blocks. Eni jointly owns 14 of the leases with Statoil-Hydro and wholly owns four of the leases. These leases position Eni as a major player in Alaska.

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Barra Takes Stake in Shell's BM-S-8 Block

- Barra Takes Stake in Shell's BM-S-8 Block

Tuesday, July 05, 2011
Barra Energia

Barra Energia has entered into an agreement to acquire 10% of Block BMS-8 from Shell Brasil Petroleo Ltda, which currently owns a 20% participation in the area. Financial terms of the transaction were not disclosed.

The block is located offshore in the Santos Basin in water depth of approximately 2,100m. Petrobras is the operator of the block with a 66% working interest while Galp holds a 14% working interest.

In accordance with Brazilian regulatory requirements, the transaction and all the applicable assignment documentation will be submitted to ANP for final approval.

"This farm-in is the first major acquisition for Barra Energia as we execute our strategy to build a high quality portfolio of exploration and production assets in Brazil, and we continue to evaluate other opportunities," said Renato Bertani, CEO. "We are striving to create a leading independent Brazilian company committed to technical excellence and ethical business practices."

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Taqa Takes Operatorship Of N. Sea Otter Field from Total

- Taqa Takes Operatorship Of N. Sea Otter Field from Total

Monday, July 04, 201
LONDON
Dow Jones Newswires
by Alexis Flynn

Abu Dhabi National Energy, or Taqa, said Monday its U.K. unit has taken control of the Otter field, the first phase of a transaction agreed last year with French major Total to acquire its 81% stake in two North Sea blocks.

The field is located in blocks P.226 Block 210/15a and P.1021 Block 210/20d, adjacent to Taqa Bratani's existing North Sea interests purchased in 2008. Otter is linked to the Taqa Bratani-operated Eider platform, the firm said Monday.

"Becoming operator of the Otter field underlines Taqa Bratani Ltd.'s long-term commitment to the North Sea," said Leo Koot, managing director of Taqa Bratani.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Seadrill Takes Reins at Asia Offshore Drilling Ltd.

- Seadrill Takes Reins at Asia Offshore Drilling Ltd.

Friday, July 01, 2011
Seadrill Ltd.

Seadrill has participated in a private placement in Asia Offshore Drilling Limited and has been allocated shares for US $54 million which corresponds to a 33.75 percent ownership stake.

Asia Offshore Drilling was established by Mermaid Maritime Public Company Limited in late 2010 when two MOD-V B Class jackup rigs where ordered at Keppel FELS in Singapore. Asia Offshore Drilling had in addition option agreements for construction of two similar units. The proceeds from the private placement will be used to exercise the first of the two options. Mermaid will following the private placement have an ownership share of 33.75 percent in Asia Offshore Drilling.

Furthermore, it has been agreed that Seadrill will be responsible for the construction supervision, project management, and commercial management of all of Asia Offshore Drilling's jackup rigs.

Seadrill has participated in a private placement in Asia Offshore Drilling Limited and has been allocated shares for US $54 million which corresponds to a 33.75 percent ownership stake.

Asia Offshore Drilling was established by Mermaid Maritime Public Company Limited in late 2010 when two MOD-V B Class jackup rigs where ordered at Keppel FELS in Singapore. Asia Offshore Drilling had in addition option agreements for construction of two similar units. The proceeds from the private placement will be used to exercise the first of the two options. Mermaid will following the private placement have an ownership share of 33.75 percent in Asia Offshore Drilling.

Furthermore, it has been agreed that Seadrill will be responsible for the construction supervision, project management, and commercial management of all of Asia Offshore Drilling's jackup rigs.

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Schlumberger Takes Remaining Shares of Frank Engineering

- Schlumberger Takes Remaining Shares of Frank Engineering

Wednesday, June 29, 2011
Schlumberger Ltd.

Schlumberger announced the acquisition of the remaining equity shares from Frank Mohn AS in Framo Engineering AS—a privately owned Norwegian company specialized in the business of developing, manufacturing and selling products and services relating to multiphase pumps and subsea pump-systems, multiphase metering systems, and swivels and marine systems to the oil and gas industry. The closing of the transaction is subject to regulatory approval.

"This transaction is an important step in the development of subsea technologies and solutions to improve hydrocarbon recovery and lower costs in the subsea environment," commented Paal Kibsgaard, Chief Operating Officer, Schlumberger Limited. "The combination of Schlumberger subsea flow assurance and surveillance capabilities with Framo Engineering's extensive subsea multiphase boosting and metering capabilities will help our customers better design their subsea infrastructure, optimize production and increase recovery over the life of the field."

"I believe this to be a great opportunity for Framo Engineering and for all of its employees," commented Ole Steine, Managing Director of Framo Engineering. "We are very pleased to be a Schlumberger company and see a fantastic future together by combining our skills. Our successful 14-year collaboration with Schlumberger for the development of the multiphase metering activity proved a good cultural fit between us that we believe will foster increasing innovation and create further opportunities."

Frederik Mohn, Managing Director of Frank Mohn, minority owner, concluded, "We are proud to have been at the inception of Framo Engineering. The company has gone through an exciting transformation, considerably strengthening its strategic positioning and the depth of its management team. The sale to Schlumberger is an outstanding recognition of the value that has been created over many years. We are confident that being part of Schlumberger will enable Framo Engineering to take on the upcoming large integrated subsea projects worldwide, while clearly recognizing Norwegian skills."

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Deep Sea Takes Delivery of Odfjell Drillship

- Deep Sea Takes Delivery of Odfjell Drillship

Wednesday, June 22, 2011
Odfjell Drilling AS

Deep Sea Metro Ltd. has taken delivery of the drillship Deepsea Metro I from Hyundai Heavy Industries (HHI).

Chairman of Odfjell Offshore Ltd. Simen Lieungh stated, "Delivery has been according to plan. The collaboration with the yard has been excellent and we acknowledge their great effort. With the delivery of this state of the art vessel, we are now looking forward to the operations ahead with BG Group and Woodside Energy."

The vessel is a highly efficient, state-of-the-art 6th generation drillship. It is equipped with the latest technology and with focus on zero discharge and other green rig features.

Deepsea Metro I is the first of two ultra deepwater drillships ordered by Deep Sea Metro Ltd. The second vessel Deepsea Metro II is scheduled for delivery from HHI end of November 2011. Deepsea Metro II has a contract with Petrobras.

The Metrostar Group retains 60 percent ownership in Deepsea Metro I & II and Odfjell Offshore Ltd. has a 40 percent ownership. Odfjell Drilling is responsible for the construction follow-up, management and operation of the vessels.

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Apache Takes Reins at Origin's Block Offshore Kenya

- Apache Takes Reins at Origin's Block Offshore Kenya

Wednesday, June 15, 2011
Origin Energy Ltd.

Origin has completed an agreement with a subsidiary of US independent Apache to divest a 50 percent interest in a Production Sharing Contract (PSC) for petroleum exploration and production, pertaining to Block L8 located in the Lamu Basin, offshore Republic of Kenya.

Under the terms of the agreement Origin has been reimbursed historical costs of US $13.2 million and Apache has become operator. In addition, Apache will meet a component of Origin's costs of an initial exploration well to be drilled in Block L8, on the Mbawa structure. The schedule for exploration activity has yet to be determined

Commenting on this agreement, Origin's Executive General Manager, Geoscience & Exploration New Ventures, Dr. Rob Willink said, "Origin is pleased to have completed this transaction with Apache. The joint venture has agreed to go forward with exploration drilling, with Apache as operator bringing its expertise to that endeavor."

Offshore East Africa at large has become an industry focus for exploration as a result of recent deepwater discoveries offshore Tanzania and Mozambique. Block L8 comprises 5,123 square kilometres with attractive exploration opportunities that include several large objectives. Prospectivity of the block centers on the Mbawa structure, a large but complexly faulted anticline mapped on 3D seismic data with potential for both oil and gas at inferred Cretaceous and Jurassic reservoir levels.

As a result of this transaction the interest holders in PSC Block L8 will become:

• Apache 50%
• Origin Energy Kenya Pty Ltd 25%
• Pancontinental Oil & Gas NL / Afrex Ltd *^ 25%

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Statoil Takes Slice in GOM Kakuna Prospect

- Statoil Takes Slice in GOM Kakuna Prospect

Wednesday, June 08, 2011
Statoil

Statoil has farmed into the Kakuna prospect located approximately 180 miles southwest of New Orleans in deepwater Gulf of Mexico.

"Our agreement is with a subsidiary of Nexen, and the partnership plans on drilling an exploration well on this attractive Miocene structure later this year," said Statoil Exploration North America senior vice president Erik Finnstrom.

A federal exploratory unit for Kakuna has been approved by the Bureau of Ocean Energy Management and Regulatory Enforcement (BOEMRE) in the United States. It encompasses Green Canyon blocks 416 (W ½), 460, 504, 505 (W ½), 548 and 549.

The BOEMRE has determined that the exploration plan for Kakuna is complete and is currently reviewing the application for drilling the well.

Provided all required permits are approved by the BOEMRE, operations on the well will commence in Green Canyon block 504 in the second half of 2011.

Statoil controls 27.5% of the prospect, and Nexen, who controls the remaining 72.5%, is the operator.

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Total Takes CNOOC Stake Offshore Qatar

- Total Takes CNOOC Stake Offshore Qatar

Monday, May 30, 2011
Total S.A.

Total announced that it has signed an agreement with CNOOC Middle East (Qatar) Limited, a wholly-owned subsidiary of CNOOC International Limited, to acquire a 25% interest in Qatar's Block BC (pre-Khuff) exploration license. CNOOC Middle East (Qatar) Limited will continue to be the operator with a 75% interest.

Located 130 kilometers east of the Qatari coast, the offshore block covers an area of 5,649 square kilometers, with water depths ranging from 15 to 35 meters.

The Block BC Exploration and Production Sharing Agreement (EPSA), entered into with the Government of the State of Qatar, stipulates that 2D and 3D seismic surveys will be conducted and that at least three exploration wells will be drilled by 2014.

Commenting on Total's participation in the Block BC EPSA, His Excellency Dr. Mohammed Bin Saleh AI-Sada, Qatar's Minister of Energy and Industry said, "We would like to welcome our long time partner, Total, into the Block BC EPSA, and we wish them and CNOOC all success with the exploration activities, which we believe are always enhanced when quality companies such as Total and CNOOC join efforts."

"CNOOC thanks QP for its professional support during the execution since EPSA endorsement. Block BC is as one of its most important projects with QP, in addition to other cooperation," said Xiang Hua, Country Manager to Qatar. "We also welcome Total to join CNOOC in exploring Block BC in Pre-Khuff formation. We believe the partnership is combining strengths from both and will eventually lead to win-win operation towards commercial discovery."

"The farm-in transaction is another step forward in the partnerships forged with Qatar Petroleum and CNOOC, and reflects Total’s commitment to expanding its exploration and production operations in promising geological basins," stated Christophe de Margerie, Chairman and Chief Executive Officer of Total.

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COSL Takes Delivery of 12-Streamer Seismic Vessel

COSL Takes Delivery of 12-Streamer Seismic Vessel

Friday, April 22, 2011
China Oilfield Services Ltd.

China Oilfield Services Limited (COSL) has successfully delivered 12-Streamer Seismic Vessel COSL 720 in Shanghai Shipyard Co. Ltd. (Shanghai Shipyard), Chongming Island Base. The ceremony saw attendance of the representatives from COSL, Shanghai Shipyard and their parent companies.

COSL 720 is the first large-scale domestic deep-water seismic vessel invested and constructed by COSL. The vessel will be capable of towing 12 streamers each 8000m long to carry out seismic survey operation. The operational indicators have met the international standards with the capability to perform high-density seismic collection for 50-meter-distance streamer. The vessel can withstand the seismic pressure of 3000PSI (regular collection: 2000PSI), with the endurance of 75 days, designed speed of 16 knots and towing speed of 5 knots, which the speed improved by 30% from the Group's existing seismic vessels and will significantly reduce the mobilization and demobilization time and increase operation efficiency.

As the most advanced deep-water seismic survey vessel built in China so far, COSL 720 is designed to be a safe, highly efficient, environmental-friendly and energy-saving vessel with emphasis on its performance, collection capacity, the equipment stability, energy saving and emission reduction. COSL 720 is equipped with a new generation of seismic collection system, integrated navigation system and lateral control system. Meanwhile, the full set of remote operating system will increase operation efficiency and reduce labor intensity. The vessel is equipped with a complete diesel-electric propulsion system which is able to effectively reduce vessel fuel consumption, vibration and noise. The system also contributes to improve the quality of seismic collection and the comfort of working and living environment for the crew.

After delivery, COSL 720 will commence operation in South China Sea upon completing the collection test of geophysical equipment, the working volume of which is expected to reach 100% in 2011.

Mr. Li Yong, CEO and President of COSL, said, "Global crude oil price picked up from the bottom and hit USD100 per barrel. Oil companies are gradually increasing their demand for oil and gas exploration. This offers good opportunity for the recovery and development of oilfield services, particularly geophysical services, while bringing new requirements for high quality geophysical services in terms of performance of equipment, technical level and work efficiency. Meanwhile, with China's progressive advancement of deep-water exploration, COSL will also further embark on its deep-water oilfield service. The successful delivery of COSL 720 enhances COSL's competitiveness and equipment for geophysical services, and also improves the company's capability of deep-water services. COSL will continually improve the relevant chains for this service, laying solid foundation for China's deep-water operation."

Maersk Oil Takes Stake Offshore Norway

Maersk Oil Takes Stake Offshore Norway

Friday, April 15, 2011
Maersk Oil

Maersk Oil has been awarded a 30% non-operated share in License PL597 on the Halten Terrace offshore Norway in the 21st Licensing Round.

The operator of the license is VNG Norge A/S (40%) with Dana Petroleum Plc as partner (30%). Together with Maersk Oil, the partners are committed to carrying out seismic data reprocessing leading to a decision whether to drill an exploration well.

"This license award fits well with Maersk Oil's strategy of building up a strong exploration portfolio in our chosen focus areas in Norway. It adds to our current interests in four other licenses on the Halten Terrace," said Morten Jeppesen, Managing Director of Maersk Oil Norway.

"We are committed to growing our business in Norway through exploration and acquisitions to build a significant portfolio of exploration and producing assets in the coming years," Jeppesen said.

Eni Takes Stake in Cadogan's Ukrainian Licenses

Eni Takes Stake in Cadogan's Ukrainian Licenses

Wednesday, April 13, 2011
Cadogan Petroleum plc

Cadogan has reached agreement with Eni for the acquisition of an interest in the Company's Pokrovskoe and Zagoryanska licenses in the east of Ukraine.

Eni will initially acquire a 30% interest in the Pokrovskoe license, with the option to acquire a further 30% interest in the future. Eni will also acquire a 60% interest in the Zagoryanska license. The initial consideration will comprise 100% funding of a work program of approximately $30 million (excluding VAT), including drilling and seismic re-processing, plus a $38 million payment. Subject to successful results from the above programs and award of production licenses, Eni will pay the Company further amounts of up to $90 million.

The transaction, which is a class one transaction under the UKLA Listing Rules, is subject to Cadogan shareholder and Ukrainian Anti-Monopoly Commission approval. The Company plans to issue a circular to shareholders in May 2011, giving full details of the proposed transaction and convening a general meeting of the Company prior to mid June 2011. Other Conditions Precedent to completion of the deal include satisfactory conclusion of an internal re-structuring within the Company, no material adverse effects between signature of the agreement and completion and all representations and warranties of the Company and Eni being true at completion. It is planned that the transaction will complete on or around June 30, 2011.

The $30 million work program on Pokrovska will be used to fulfill the work obligations on the license and will test the potential of the Upper and Lower Visean intervals which had strong indications of hydrocarbons in wells on the license. The cash proceeds arising from the transaction will be applied to finance any future Zagoryanska work programs and fund development of the Company's other assets. Additional future cash proceeds from successful operational results and the award of production licenses will further strengthen the Company's financial position, enabling it to finance its share of future development activities and to invest in new business opportunities.

Commenting on the proposed transaction Simon Duffy, Chairman, stated, "The announcement of this major transaction signifies a turning point for Cadogan. With Eni as a strategic partner, the Company can more rapidly develop the potential in these licenses and can embark on other significant oil & gas opportunities that are present in Ukraine."

Ian Baron, Chief Executive Officer commented, "The investment by Eni in two of our Ukrainian assets vindicates the Board's view, not only of the value of these particular assets, but also the scale and substance of the opportunity in the country. We strongly believe that Ukraine offers significant opportunity for Cadogan and Eni, which we can develop through combining the expertise of Cadogan's staff with the resources of a major oil company."