(Alliance News) - Caspian Sunrise PLC announced on Thursday that it has entered into a farm out agreement which will see a local partner complete outstanding work in return for a 15% stake in the 3A Best contract area in Kazakhstan.
The agreement mainly consists of the drilling of a 2,250 meter well at a cost of around USD2.5 million.
The partner has also been granted an option to acquire the remaining 85% of 3A Best at a price to be determined by an independent expert.
"Cash constraints, in part following the impact of Covid, have severely limited what we have been able to achieve at the 3A Best Contract area, which was acquired in 2019," said Non-Executive Chair Clive Carver.
"The contribution from the first charter for the Caspian Explorer under our ownership will cover its operating costs for the year and demonstrates its potential contribution when new wells are drilled in the oil rich northern Caspian Sea."
In a separate announcement oil & gas firm Caspian announced the first charter for the Caspian Explorer, a shallow water drilling vessel acquired in 2020 and specialising in operations in the shallow northern Caspian Sea.
The charter, which will be undertaken this year, is safety related rather than for new drilling. The work demonstrates the continuing activity in the region, Caspian said, and could likely lead to longer and more rewarding contracts in the future.
Shares were up 6.5% to 2.45 pence in London on Thursday afternoon.
By Will Paige; willpaige@alliancenews.com
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Caspian Sunrise (CASP)