Drilling Preparations Underway at Cadogan's Ukraine Well

Cadogan reported that rig acceptance and preparations for drilling of the Pokrovskoe 1 well on the Pokrosvskoe license in eastern Ukraine commenced on July 24, 2011. As previously advised the well had been suspended in December 2010 at 5450 meters pending the sourcing of a suitable alternative all weather drilling rig. The Company recently awarded a drilling services contract to Saipem. Target depth is 5800 meters and the Company expects the drilling and preliminary testing of the well to take approximately 60 days.

Operations have also commenced on the work-over of the Zagoryanska 1 well on the Zagoryanska license also in eastern Ukraine. A work-over drilling unit will be mobilized to the location during the first week of August 2011 to undertake perforation and testing operations, which are expected to be completed by end of 3Q 2011.