EBRD Shows Support for Cadogan's Plight to Regain Licenses

Cadogan has noted an announcement, copied below, by the European Bank for Reconstruction and Development (“EBRD”), expressing support for the Company over the current issues surrounding its Pirkovskoe and Zagoryanska licenses.

The EBRD is the largest single investor in central and eastern Europe, investing mainly in private enterprises and using its close relationship with governments in the region to promote policies that will bolster the business environment. EBRD is a significant shareholder in Cadogan, holding an interest of 5.03% (11,632,866 shares).

Cadogan Petroleum successfully appeals over licenses cancellation in Ukraine

In February 2007, the European Bank for Reconstruction and Development acquired a stake in Cadogan Petroleum, a public limited company incorporated in the United Kingdom and involved in the exploration and development of a number of gas fields in Poltava region of Ukraine.

On June 17, 2008 the Poltava Region Commercial Court made a ruling that could indirectly lead to the cancellation of Cadogan Petroleum's exploration licenses in the Pirkovskoe and Zagoryanska gas fields.The EBRD as well as other shareholders of the company are very concerned that neither Cadogan nor affiliated parties were informed about the court procedures and received no ruling from any relevant authority.

The European Bank informed the Ukrainian Prime Minister about this situation in its letter dated August 7, 2008.

The European Bank is pleased to note that on August 13, 2008, the Kharkiv Appellate Administrative Court in Ukraine ruled in favor of Cadogan, allowing its application to appeal against the Poltava Region Commercial Court earlier decision and suspending it pending the resolution of the appeal.

The next decision of the Kharkiv Appellate Administrative Court regarding the Zagoryanska license is expected to be taken on August 20, 2008.