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Cadogan Petroleum (CAD)

Cadogan is a relatively unknown oil and gas explorer. Headquartered in Kiev, their activities are located exclusively in Ukraine. The Ukraine may not be the first country you think of when it comes to oil and gas exploration, but there are a number of reasons why its fast becoming a prime location: Ukraine has increasingly high demand for energy, in particular natural gas. The country has significant reserves, many of which are yet to be exploited. Domestic production makes up less than half of the Ukraine's energy needs, the remainder is imported from Russia and Turkmenistan. The price at which Russian gas is sold to Ukraine has tripled since 2005. As such the Ukrainian Government is very keen to increase domestic production in order to reduce the country's dependence on imports. Cadogan have a unique knowledge of the Ukrainian oil and gas market. Theyve spent many years building a portfolio of assets. Through a series of acquisitions the company now has a total of 14 oil and gas fields. These fields are located in two of the Ukraines largest hydrocarbon (oil and gas) basins, the Dnieper-Donets and Carpathian basins. The Dnieper-Donets basin is the major gas producing region of Ukraine and the
Galvan Research and Trading, CMA House, Newham Road, Truro, Cornwall, TR1 2SU Risk Warning Notice: Galvan Research And Trading Ltd is authorised and regulated by the Financial Services Authority (FSA). Whilst every attempt is made to ensure the accuracy of the information provided, no responsibility can be accepted for any inaccuracy. The information provided cannot be relied upon as constituting a recommendation, nor construed as any offer to sell, or any solicitation of any offer to buy investments. No liability is accepted for any loss whether direct or indirect, incidental or consequential, arising out of any of the information being untrue and / or inaccurate, except to the extent caused by the wilful default or gross negligence of Galvan Research And Trading, its employees, or which arises under the Financial Services And Markets Act 2000.

5th September 2011

Thomas Light, Equity Analyst Carpathian basin is one of the largest petroleum provinces in Europe. Cadogans strategy is to sell-off stakes in the mature section of its portfolio and reinvest the cash in further exploration whilst reducing the risk on its existing assets. This strategy has been underlined by its latest deal with Italian energy giant Eni S.p.a. to sell 60% of its East Ukrainian operations. The companys management clearly share our bullish view. Chief executive Ian Baron and finance boss Gordon Stein have been upping their stakes. In May, Baron snapped up 150,000 shares and Stein bought another 68,000 shares. Cadagon have had five full years of uninterrupted revenue growth and a solid balance sheet. The shares are trading 20% below their June highs and 60% below the 1 marker reached in 2009. In short, Cadagon look a promising play in a promising region. 3 year chart:

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HaiKe Chemical (HAIK)

HaiKe Chemical is a petrochemical specialist helping to feed Chinas ever growing appetite for energy and chemicals. Petrochemicals are chemical products derived from oil and HaiKes largest business is oil refining. They produce a wide range of petrochemicals including light fuels, gasoline and diesel as well as petroleum coke and liquefied gas. Petrochemicals are a hot sector, especially in high growth emerging markets. Many industrial sectors, including manufacturing, transport and agriculture, use some form of petrochemicals. And the relentless industrialisation of the developing world means that demand for petrochemicals is surging. China based HaiKe are reaping the benefits. In June, HaiKe announced that sales from petrochemical products jumped over 150%. These stellar sales helped HaiKe swing to a profit of $1.8m for the year. Not only that, theyve just paid a maiden dividend to investors. The refinery side of the business is also set to benefit from changes to Chinese government regulations that affect the price of refined petrol. This should significantly improve their profit margins. As well as refining petrol, HaiKe also has a fast growing, high margin business, which produces speciality

5th September 2011

chemicals and biochemicals. These are widely used across many different markets. Whats more, this business is less dependent on the fluctuating oil price. So what does the future hold for HaiKe? They plan to continue growing their refinery business and focus on developing new specialty biochemical products to take advantage of increasing demand. The companys long-term strategy is to move from low margin refining to the high margin downstream chemical sector. It has just bought a further 29% of Shengli Electrochemical which produce caustic soda and chlorine-based chemical products, taking its stake to over 90%. With sales surging and a strong foothold into China, HaiKe looks set for much bigger things. 3 year chart:

Galvan Research and Trading, CMA House, Newham Road, Truro, Cornwall, TR1 2SU Risk Warning Notice: Galvan Research And Trading Ltd is authorised and regulated by the Financial Services Authority (FSA). Whilst every attempt is made to ensure the accuracy of the information provided, no responsibility can be accepted for any inaccuracy. The information provided cannot be relied upon as constituting a recommendation, nor construed as any offer to sell, or any solicitation of any offer to buy investments. No liability is accepted for any loss whether direct or indirect, incidental or consequential, arising out of any of the information being untrue and / or inaccurate, except to the extent caused by the wilful default or gross negligence of Galvan Research And Trading, its employees, or which arises under the Financial Services And Markets Act 2000.

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Lansdowne Oil (LOGP)

Lansdowne is a Dublin based oil and gas explorer. The company is focused on the North Celtic Sea Basin (NCSB) located just off the south coast of Ireland. The NCSB is a very promising region. It already has the infrastructure and systems in place for both oil and gas production but remains relatively underexplored. Lansdowne hold the rights to four Standard Exploration Licences and two Licensing Options in this area. The company owns a balanced portfolio of low-risk gas prospects near the existing infrastructure and higher risk oil prospects with big upside potential. Lansdowne are currently at a critical stage in the development of several oil and gas prospects. The company has just completed a 3D seismic scan of three key development sites: Amergin, Rosscarbery and Midleton. Together, they cover a vast area of over 1,000 square kilometres. Data from the state-of-the art 3D scan is being processed right now and the final results will be released in two months time. The results will be central to the companys planned exploratory drilling in 2012. Management expect the data to substantially reduce the risks normally associated with the

5th September 2011

drilling of exploration wells, making each plot much more valuable. Lansdowne will use the data to mount a farm-out campaign with a view to attracting industry partners to drill wells on each site. The company has financed its exploration the right way. In March this year they raised 5m through a share placing, while its two largest shareholders converted 1.9m of loans into equity, raising the cash balance and reducing its debt. Clearly, with the results of its 3D scan yet to be announced, Lansdowne is not without risks. But with higher risk comes higher potential reward. If the results are positive, these shares could really take off.

3 year chart:

Galvan Research and Trading, CMA House, Newham Road, Truro, Cornwall, TR1 2SU Risk Warning Notice: Galvan Research And Trading Ltd is authorised and regulated by the Financial Services Authority (FSA). Whilst every attempt is made to ensure the accuracy of the information provided, no responsibility can be accepted for any inaccuracy. The information provided cannot be relied upon as constituting a recommendation, nor construed as any offer to sell, or any solicitation of any offer to buy investments. No liability is accepted for any loss whether direct or indirect, incidental or consequential, arising out of any of the information being untrue and / or inaccurate, except to the extent caused by the wilful default or gross negligence of Galvan Research And Trading, its employees, or which arises under the Financial Services And Markets Act 2000.

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