I have considered investing in an unknown oil minnow that is operational in the Ukraine and potentially of the same calibre as JKX Oil and Gas.

Does anyone know about this company or have any thoughts?

Gerry

Silvermede, I havn't got a view on these at the moment.

Aldwickk, understand and as always I will DMOR

I found this tip when I was clearing out my mailbox, it's from about a month ago.
-------------------------------

The recent news from Ukraine seemed unfavourable as far as oil and gas companies are concerned, dealing as it did with the so-called gas price war with Russia.

But the share price of the London AIM-listed Cardinal Resources has seen a strong rise in recent days and there could be more to come. This could have something to do with a couple of broker's reports which suggest in terms of European gas supply Ukraine could find itself well placed over time. More likely it is the latest operational and financing update from Cardinal itself that has provided the lift.

Cardinal has interests in the Rudivsko-Chernovozavodske (RC) and Bytkiv-Babchenske (Bytkiv) fields, which it operates in partnership with NYSE-listed JSC Ukrnafta, the largest oil producer in Ukraine. In addition, in October last year Cardinal acquired the Rudis Drilling Company. This meant three new licence areas and a Joint Activity Agreement (JAA) with Ukrgazvydobuvannya (Ukrgaz), a subsidiary of Naftogaz Ukraine, came into the Cardinal fold.

All this has meant Cardinal now has 20 wells in production, with two makeovers in the last six months and a further four workovers expected to be completed during the first quarter of 2006. The company's net reserves are now put at 27.5 million barrels of oil equivalent - 50 per cent higher than four months ago - and production has doubled to a daily average of 1,172 boepd. Most of the output came from the Bytkiv field which is an oilfield located in the Carpathian fold belt, 45 km southwest of Ivano Frankivsk in the Nadvirna Oblast. Twelve wells are producing in the field.



Robert Bensh, Chairman and Chief Executive Officer of Cardinal, says a priority for 2006 is to restore its position in the RC field. The RC field is a large underdeveloped gas field (1.54 trillion cubic feet of gas in place) located in the Dnieper-Donets basin, 200 km east of Kiev in the Poltava Oblast.

Cardinal formerly traded as Carpatsky Petroleum on Toronto's Venture Exchange before being delisted in June 2003 for failing to file financial statements and pay the Exchange's annual fees. This in turn meant its stake in the RC field was cut back to 14 per cent when it was unable to fund its share of the work programme.

Following a financing by Silverpoint Finance in December 2005 when US$38 million was raised, Cardinal is negotiating to reinstate its net profit interest in the RC field from 14.9 per cent to 45 per cent. This will provide a considerable boost to reserves and production and significantly increase Cardinal's footprint in Ukraine.

As for the prices received for gas Bensh says: "I maintain my view, based on the trends we have experienced so far, that domestic gas prices will continue to increase with positive implications for Cardinal. Since the IPO [on London's AIM] in April 2005 we have already experienced a rise in the average sales price of our gas.

He continues: "In light of the recent disruption in gas supplies from Russia and the increase in imported gas prices there is an even more pressing need for Ukraine to attract Western technology and increase foreign direct investment in the energy sector to increase domestic production."

At 28p, Cardinal Resources is a buy.

Key Data

EPIC: CDL
Price: 27.5 - 28.5p
Market : AIM

By - Stewart Dalby

well found Andy
its always good tos ee a positive press article

good news out! any holders?

I'm still in and expecting some very significant rowth over next couple of years
I have no specific reasons other than the whole thing looks so similar to JKX but with luck will avoid the stumbles made back in the late 90's by them

the whole Ukraine thing is in my view an extremely good investment as they really do seem determined to move towards the West
if they fail then its 'all bets off'

but I dont think they will

All,

Cardinal resources are presenting at Oilbarrel soon, so there may be an uplift afterwards if peeps like what they hear.



anotherxiii

Sorry, I don't agree, I see the Ukraine as a good place to do business regardless of the government, or their political stance towards Moscow.

JKX were doing business there under the old pro Moscow regime, and continued under the new pro west regime.

IMO Ukraine need the energy, and export revenues, as well as taxes of course, and will therefore encourage companies to invest there in order to produce the energy they require.

It could be argued that the pro west stance has led to the recent price increases, and so have benefited domestic gas producers such as Cardinal and JKX.

Amities / ...Bonne matins / Slt ..... A small point; but may give a clue as to the relative futures of both JKX and CDL. Directors and institutional supporters in JKX have been busily selling whilst thier counterparts in CDL are buying . l think you have to measure each company on thier individual merits as opposed to the general geopolitical background that constitutes the Ukraine .Furthermore. although, in reality West and East Ukraine are like different countrys in all but name with the former looking to Moscow and the latter to the Europeon union l agree strongly with Andy that whether Yushchenko or Yanukovych wins the forecoming elections it will be strictly business as usual . And for the very same reasons he mentions . Also Shell have farmed into a 10 NAK licenses { CDLS strategic partner } in the Dniepr Donets with a worth of $100 million. Malcom Brinded, Shells executive director for exploration and production clarified " This is a significant move as part of our stratagy to add more integrated gas to our porfolio . .All in all i would venture to say all looks well in the garden of CDL ...,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, . One variable for sure is that CDL revenues/ receipts for gas have risen 34% in the last half of year. l can only assume the story will be much the same at JKX. . But whereas l currently feel every drip of good news is factored into the JKX s/p , CDL is only juste hitting attracting the interests /radars of the bigger players . ..{ juste for the record i own a substantial amount of both JKX and CDL .} Bonne chance / a'bientot ...@+ J ..

TFC,

I am going to attend oilbarrel, so will post my thoughts after the presentation.

There is another Ukranian oil and gas play presenting, due to list on AIM soon too.

Three days to go before the Ukranian Elections. Any ideas what difference this makes to the CDL negotiations to buy back into their JV partners to regain their 45% interest? I'm hoping for good news and awaiting for the shares to climb nearer to their true potential.

Can anyone shed any light on what's happening in the Ukraine? JKX price has jumped recently - was that on good news about the election?

JKX, bid rumour also oil price.

austing2253,

According to the weekend press, JKX' jump on Friday was due to "vague takeover rumours", so I would exect the price may retrace somewhat, unless it's true (which I doubt) of course.

Some of the rise would be down to the renewed bullishness in the oil and gas sector, and the higher prices they are receiving for their oil and gas, so I expect all producers such as JKX to move up anyway.

The latest news may not be so good, as the lady that wants to re-nationalise everything seems to be returning to power!

The news article is HERE

Thanks for that Andy. And what would happen to JKX & CDL shares if she were to renationalise them? Would I be paid for them or loose the lot?

Andy, you were going to post your thoughts after the Oil Barrel conference. Earlier thread on 12th March. Do you think it wise to cut my losses and sell these shares while I'm ahead?

austing2253,

JKX were operating in the Ukraine under the old socialist regime, so I am not selling mine as I think the western governemnts would not allow her simply to take out our companies without compensation.

She also wants to tear up the gas agreement with Russia, agreed in January by the guy that has just employed her! Again, unlikely to happen IMO.

With regard to theOilbarrel conference, I thought the Cardinal presentation was very positive, and once they have repurchased the share of the field they lost a couple of years ago, I will probably invest, subject to having some funds.

The CEO made the obvious comparison with JKX, and on a strict fundemental comparison basis, Cardinal look cheap.

What he didn't take into account was the potential of JKX, with it's various projects, such as the Georgian offshore block.

Cardinal looks a solid enough company to me, and IMO should do well in the future, given that oil and gas prices look set to remain high, and are more likely to rise than fall in the near future if Iran turns nasty.

Austing2253,

I have to confess I cannot find my notes, I may have left them in London.

Here is the write up from the conference.



CFO Charles Green updates Cardinal's activities in Ukraine

Green believes that as these reforms bed down and gas prices converge with those in Europe Ukraine will become as increasingly attractive investment proposition for E&P companies. Cardinal plans to be part of that proposition and intends to build a reserve base of 100-200 million boe within the next three to five years.

We think we have a consolidation period of about 18 months to two years before theres more attention paid to this marketplace, said Green. We plan to create a footprint investment in the region and present it as a sale or merger opportunity for a larger E&P.

Thanks for that Andy, very informative as always. I think I will hang in with CDL & JKX. Best wishes with yours. Gerry

Gerry,

You were too quick!

CLICK HERE to link to their Oilbarrel presentation.l

Has anyone any news at all about CDL? All seems to have gone very quiet?