Cadogan Petroleum PLC provides the following update with respect to the licence challenge regarding Pirkovskoe and the latest status on key operations in Ukraine.

• The Higher Administrative Court of Ukraine (the "Court") found in favour of Poltavanaftogazgeologiya (PNGG) in the appeal hearing in relation to the transfer of the Pirkovskoe licence to Nadra Ukryainy (Nadra) in June 2007 (the "Decision") • Notwithstanding this decision, Cadogan's licence to operate the Pirkovskoe field remains valid and there has to date been no direct legal challenge to Cadogan's interest in this licence • Cadogan has been advised that new legal proceedings would need to be brought against Cadogan and would need to succeed before Cadogan's interests in its licences would be affected • The Ministry of Environmental Protection of Ukraine, has written a letter in support of Cadogan's position to the Court. • Cadogan is still awaiting the written text of the judgement relating to the Decision which is expected during March • Cadogan has yet to receive a date for the PNGG initiated appeal hearing with respect to the Zagoryanska licence

As noted above, Cadogan's licences remain valid and effective despite the Decision. The Board remains firmly of the view that the challenge to the antecedent licence is wholly unwarranted and, were it to succeed, would pose an unacceptable risk to Cadogan. Accordingly, the Board believes that it is in shareholders' interests to take all necessary steps to defend the Company's title to its licences all of which were acquired in accordance with all applicable regulations. Following extensive consultation with its legal advisers, the Board expects to lodge an appeal against the Decision at the Supreme Court of Ukraine. The Supreme Court of the Ukraine represents the highest judicial body in Ukraine.

Mark Tolley, Chief Executive said,"It is unacceptable that the ongoing legal dispute initiated by PNGG continues to cast a shadow over our Pirkovskoe and Zagoryanska licences. We continue to take steps to prevent any direct challenge to our interests in these licences.

"Significant resources have been expended to date to commercialise our asset base. All our assets are within weeks of providing critical operational newsflow which will help determine their potential value and enable the Board to decide on the appropriate future strategy to realise it."

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