Junior producer Cadogan Petroleum said Tuesday that an increase in tax rates on oil and gas production in Ukraine should "not have a material effect" on its financial position, operations or work program.

Last week, the Ukrainian government passed an emergency budget that increased production taxes for an initial period of between Aug. 1 and Dec. 31. These increases will see tax on oil and gas production from shallow fields increase to 55 percent (from 28 percent) while tax on production from deep-lying fields will increase to 28 percent (from 15 percent).

Cadogan said it will continue to evaluate the impact of the changing fiscal environment and take such measures as may be necessary to protect its interests and those of its shareholders.

The firm added that it expects a delay to the start of drilling of its first well in the Debeslavetaska field, so that this well will be drilled in November rather than September. Cadogan also reported a further increase in stable production in its Monastyretska field to 50 barrels of oil per day.

On Monday, fellow Ukrainian producer JKX Oil & Gas reported that it was carefully evaluating the impact on its ongoing investment program of the emergency budget legislation.

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