Cadogan Stung by Gas Trading Losses

Ukraine-focused Cadogan Petroleum swung to a loss of $2.1mn in 2019, from a $1.2mn profit in 2018, as a result of a collapse in gas trading revenues, it said on May 4.

Gross revenues came to $5.9mn last year, down from $14.7mn in 2018. Driving the decline was a plunge in gas trading revenues to $0.9mn from $9.9mn. It booked a $2mn loss from the segment, versus a $0.7mn profit a year earlier.

"Trading had a complicated year due to a substantial drop in prices on the EU and Ukrainian markets driven by a mild winter, subsequent low demand and excess gas in storage," Cadogan said. These factors led Cadogan to impair its stored gas value to reflect low prices.

Moving forward Cadogan said gas trading would no longer be a major activity, with the company shifting the focus to its oil operations. Revenues from exploration and production rose to $4.9mn from $4.7mn, on the back of a 15% increase in production to 287 barrels of oil equivalent/day. 

The company operates two licences in western Ukraine has also applied for exploration permits in the Po Valley of northern Italy. In December it converted the Monastyretska exploration licence in Ukraine into the Blazhiv 20-year production licence. It also brought on stream the Blazhiv-10 well last year, which was responsible for the bump in output.

 Cadogan had $12.8mn in cash at the end of the year, compared with $35.2mn at the end of 2018.