SOURCE: CARDINAL RESOURCES PLC

October 27, 2005 08:04 ET

Cardinal Resources plc Completes Acquisition of Rudis Drilling Company

Mr. Misbah Al Droubi Elected to the Board of Directors

LONDON -- (MARKET WIRE) -- October 27, 2005 -- Cardinal Resources plc (AIM: CDL), an independent oil and gas exploration and production company, today announces that it has completed the acquisition of Rudis Drilling Company from Hares Group Limited. The acquisition adds 9.1 MMBOE, or an increase of approximately 50%, to Cardinal's existing reserves of 18.4 MMBOE and increases net daily production by 75% from an average of 631 barrels of oil equivalent per day (boepd) in the first six months of the year to over 1,100 boepd.

With this acquisition, Cardinal will now own and operate three oil and gas licences - Dubrivska (DB), Bilousivsko-Chornukhinska (BC) and North Yablunivska (NY) - and a 50% working interest in a Joint Activity Agreement (JAA) with Ukrgazvydobuvannya, a subsidiary of Naftogaz Ukraine. All licence areas are located approximately 40 kilometres from the Rudivsko-Chernovozavodske Field in Eastern Ukraine where Cardinal holds interests in its existing JAA wells with Ukrnafta.

With the Rudis assets transaction, the Company plans to drill five development wells, complete four workovers and expand the gathering systems in the three licence areas for approximately $20 million. Currently, one exploration well is drilling in the DB licence area, the BC #13 workover is in progress and work is underway to construct two pipelines in the Kulickykhin field to tie in existing wells, with scheduled completion and sales in the first quarter of 2006. Drilling of the NY #4 well is scheduled to commence in first quarter of 2006.

In accordance with the terms of the agreement, Hares Group has the right to appoint a non-executive member to Cardinal's Board of Directors and the Hares Group has selected Mr. Misbah Al Droubi to fill this seat. Mr. Al Droubi, aged 46, has served as the Chief Executive Officer of Hares Group Limited since 2002. Mr. Al Droubi was formerly a Director of "L'atelier d'amenagement de l'espace SARL" in Syria and the "International Company for Medical Rehabilitation S.A." in Cairo. He is currently a Director of "AWBC Steel Traders GmbH" in Austria. Mr. Al Droubi's Board membership at Cardinal is for a three-year term, subject to re-election on an annual basis at the Company's AGM. Mr. Al Droubi has elected to waive cash compensation for his appointment in exchange for the grant of share options subject to Board approval. There are no other matters concerning Mr. Al Droubi that must be disclosed under Schedule 2(g) of the AIM Rules for Companies.

"I'm very pleased to welcome Misbah to the Cardinal Board of Directors," said Robert J. Bensh, Cardinal's Chairman and Chief Executive Officer. "His significant international experience and deep knowledge of Ukraine business and politics adds another valuable member to the Cardinal team."

As a result of the transaction, a number of key Rudis employees will join Cardinal in Ukraine. They bring with them considerable technical experience and familiarity with the domestic operations that will further strengthen the incumbent Cardinal team and broaden and deepen the knowledge base.

Following the closure of the Rudis transaction, Cardinal has 114,554,109 Ordinary Shares outstanding, of which 21,949,364 shares, or 19.2%, is held by the Hares Group.

Cardinal Resources plc

Cardinal Resources plc is an independent oil and gas exploration and production company with assets in Ukraine. Cardinal is an experienced operator in the country focused on expanding its existing operations through the farm-in or acquisition of additional upstream oil and gas assets that can be further developed through the application of modern technology and expertise.

This release may contain certain forward-looking statements. These statements relate to future events or future performance and reflect management's expectations regarding Cardinal's growth, results of operations, performance and business prospects and opportunities. Such forward-looking statements reflect management's current beliefs, are based on information currently available to management and are based on reasonable assumptions as of this date. No assurance, however, can be given that the expectations will be achieved. A number of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release. While Cardinal makes these forward-looking statements in good faith, neither Cardinal, nor its directors and management, can guarantee that the anticipated future results will be achieved.

                 This information is provided by RNS
         The company news service from the London Stock Exchange

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