ASX listed Cossack Energy Join San Leon Energy in the Bieszczady Project South East Poland, with Well Nieb‐1 set for testing

Highlights:

• Cossack has proceeded to Settlement on the Bieszczady Project in Poland.
  
• Cossack has now diversified its portfolio into two significant projects located in the Carpathian
  foothills region and is now focused on the development on the most immediate prospects located in
  Poland.
  
• Anticipates a near term flow testing program on the Nieb‐1 discovery well to prove up existing
  Contingent Gas Resources to Reserves, followed by a fast track program to production.
  
  
  Acquisition of Polish Project Completed
  Cossack Energy Limited (“Cossack” or “the Company”), the oil and gas explorer with assets in the world class North Carpathian oil and gas province stretching across the borders of Poland and Ukraine, is pleased to announce that it has executed a Share Purchase Agreement (“SPA”) with Iskander Energy Corporation to finalise the purchase the Bieszczady Project in Poland.
  
  Bieszczady Project Acquisition
  As announced at the end of May, Cossack executed a Binding Heads of Agreement (“HoA”) with Iskander Energy (“Iskander”) to acquire their complete 24% working interest in the Bieszczady Project (“Project”) located in south‐east Poland. As contemplated in the HoA, the Company paid a non‐refundable deposit of US$200,000 to Iskander in early June and moved into an extended period of exclusivity which afforded the Company further time to conduct more in‐depth due diligence on the Project up until early July 2014.
  In early July Cossack confirm that it had, with the exception of a couple of minor items, completed its in‐ depth due diligence within the period of exclusivity and elected to proceed with the acquisition, and delivered to Iskander a Notice to Proceed with the transaction at that time.
  Cossack can now further confirm that it has finalised its in‐depth due diligence and has completed the necessary formalities, including execution of the SPA, and has proceeded with the acquisition with immediate effect.
  These formalities contemplated by the HoA were the negotiation of a formal SPA which was executed with Iskander on 30th July after which the Company moved immediately to settlement of the transaction (“Settlement”) which was via the acquisition of a Polish holding Company called EuroGas Polska Sp. z o.o., the owner of the 24% working interest in the Joint Operating Agreement (“JOA”) for the Project. 
  
  
  
  Settlement was concluded as contemplated by the HoA with the payment of US$500,000 (plus working capital adjustments).
  The remaining obligations under the HoA subsequent to Settlement encompass the requirement for Cossack to pay the final instalment of the US$1 million purchase price being US$300,000 payable to Iskander (less any adjustments) by 31 December 2014.
  Bieszczady Project Description
  Cossack has now acquired a 24% working interest in the Bieszczady Project which is made up of eight (8) contiguous licences covering an extensive area of 3,546 km2 in the far south‐east of Poland bordering on Ukraine and Slovakia in the foothills of the Carpathian Mountains.
  Polskie Górnictwo Naftowe i Gazownictwo (“PGNiG”), who is the largest oil & gas exploration and production company in Poland, is the 51% JV owner and Operator of the Project with LSE AIM listed San Leon Energy plc as the other 25% JV Partner.
  Immediate Well Test to prove up Contingent Resources
  The program of works for 2014 proposed by the Operator (PGNiG) is concentrated on a wide perforation and production test of the Niebieszczady‐1 (“Nieb‐1”) discovery well located in the Tarnawa Central prospect containing the contingent resources which was drilled and tested in 2011.
  Final timing of the proposed program will be determined at a meeting of the Joint Venture Committee, proposed for the end of July 2014 in Warsaw. It is expected that the program will be initiated in the second half of the 2014 calendar year.
  Development scenarios are highly advanced and would be via a dedicated processing facility and a 17km lateral pipeline to interconnect into an existing metering facility located on the high pressure pipeline system.
  Please also see ASX Announcement and associated presentation released on 5th June for more background information on the Bieszczady Project.
  Bieszczady Project Contingent & Prospective Resources
  Tarnawa Central, one of five prospective fields identified in the Project area, has been initially flow tested by means of the Nieb‐1 discovery well and will be the subject of an extended production test in the upcoming half year with the intention of converting the Contingent Resources into Reserves and is estimated by RPS Canada in their Report with an Evaluation Date of 15 November 2012 to contain the following Contingent Resources:‐