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Definitely a new level of interest in the share in recent weeks, more so than for a long time. Many new shareholders have picked up on Caspian so momentum could well be building to see this continue to increase northwards as the market finally begins to understand the potential of the BNG asset.

Sheps, they will need to get it onto test production for a uninterrupted period before they will attract any interest from one of the big players. They have been in this position in the past, so next few weeks will be the acid test for the deeper horizons and potential that exists there. Sit tight.

The "special dividend" scenario will occur for one of three reasons, under their current policy of paying a monthly dividend equal to the higher of £1 million or 35-40% of available free cashflows, with £1 million being the guaranteed minimum that will be paid every month.

The most likely reason we will get a special dividend is if they sell the floating vessel, the proceeds of which would mean that 35-40% of the possible proceeds would be paid out as a one off dividend, with possible higher dividend being paid out in subsequent months until 35-40% of the free cashflows available in the company are less than £1m. So if the vessel is sold for £50-60m then we would get a huge payout, compared to the £1 million currently paid to all shareholders. The continued rental of the vessel could create the extra free cash to pay out a special dividend. If the Company gets production upto 5000 bopd, then this could trigger the scenario that 35-40% of available cash is greater than £1m, therefore resulting in higher regular monthly dividend payments.

You could run a financial model with various assumptions to try to calculate what their ongoing fixed costs and revenues are to try to calculate the free cashflows being generated by the business under each of these scenarios, however, I think we will just have to rely on the company's internal financial monitoring to let us know when they think the special higher dividend payments can be justified. It will most probably happen, just a question of time, as long as they maintain their existing dividend payout policy.

Jimmy, a lot of the production at Tengiz, the major producer nearby to the BNG field has sulphur as a by product from all production from that field. BNG production is without sulphur content.

All looking good with todays update on 802, an extra 700+ bopd, before we hear from the results from well 142 and well 153, if they can get them back up and running. Should be an operational update due in the coming weeks to give us progress from these wells and a further update on 802.

Next announcement will most probably be the fourth dividend announcement next week, all being well. If the contract for the hire of the vessel has been signed with ENI and deposit paid and we are able to hold production at 3,000 bopd, there must be a significant jump in free cashflows with oil prices up from previous months and revenues increasing all of the time.

Should see this flowing through and impacting the dividend rate either this month or next month, if they stick to their policy of a minimum of £1 million or 35% of free cashflows if higher. Only time will tell, but difficult to see this doing anything but increasing, both in terms of share price and dividend payment, in the coming months.

CC, very good summary of the reality of drilling down a narrow shaft to that depth. In terms of reaching TD, they have in the past not always reached their TD as part of the drilling process involves taking cores out of the well and evaluating what they find by examining the core that they extract from depths as they drill down. If they find large intervals of oil saturated cores coming from depts at 4550 to 4650 metres or other depths and the pressure and difficulty in drilling beyond these depths or that they find oil levels that begin to flow through its natural pressure, then they will try to control the flow, to get the casing set at those levels and decide then whether the oil shows and intervals are sufficient to try attempt test production, without drilling to greater depths.

All wells are drilled to establish the extent of the oil reservoir that exists within the structure, so the only reason they like to achieve test depth as it gives them maximum information about the potential size, depth and thickness of the reservoir they drill into. But equally if the oil starts to flow naturally, they will stop drilling further, case it, test production flows and then if successful put that well into commercial production and then decide to drill other wells to deeper horizons.

OJ, not sure this is publicly available information, as was probably privately owned before Caspian bought into it. The cost of investment in 3A Best has been fully written off in the books, as not sure it is a priority or strategic to Caspian's short term goals at the moment. BNG offers a lot of immediate development opportunities, so doubt any money will be diverted into 3A Best in the near term. Any particular reason you want to know this ?

RD, a few things have happened in past few years which is making a difference to Caspian's performance:

1. Both MJF and South Yelemes no on full production 25 year licenses, enabling them to export oil internationally, when they decide the time is right
2. The successful application of the horizontal drilling technique, which has increased production significantly on MJF wells. To be now rolled out to South Yelemes wells and other MJF wells.
3. No dilution of interest in license. Still own 99% of licence. This is extraordinary, given they are now in production and have managed to finance all exploration without dilution.
4. No external debt. Except remaining Historic license cost obligation payable quarterly.
5. Have eliminated sale of oil through selling agents by establishing their own trading entity, effectively increasing gross margins from sales
6. Possibility to sell to mini refineries, improving net back on domestic sales
7. Now potential for generating rental income from the Floating vessel for $10-20m+ per annum
8. Monthly dividends now paid from the higher of £1million or 35-40% of free cashflows
9. Current 2400 bopd production sufficient to generate sufficient income to pay for ongoing operating costs and afford a monthly dividend out of excess cashflows
10. Incremental production from additional wells likely to increase dividend rate as more free cashflows will be generated over ongoing fixed costs
11. Cost of drilling new wells significantly decreased due to now owning a number of drilling rigs

Just to name a few of the main advantages that the Company has achieved in the last 2-3 years, making the future very bright and full of potential. This ignores possible success with any of its deep wells. Still can achieve success just by developing the MJF and SY structures through horizontal drilling technique and building infrastructure/storage to cope with increased production levels from hereon.

" Deep Well 801

Background

Deep Well 801 was originally drilled to a depth of 5,050 meters reaching Total Depth in July 2015. As with the other deep wells drilled at BNG the well was blocked by a combination of excess drilling fluids and rocks from the potential reservoir.

For an extended period, the Company sought to remove the blockage with the use of chemicals and by periodically opening and closing the well as pressures grew. During that time oil flowed to the surface under its own pressure.

In May 2018 the Company announced it successfully completed a 350 meter side-track from a depth of 4,501 meters by-passing the blocked pipe. A 5-inch liner was run to the new bottom of the borehole at a total depth of 4,852 meters.

During the drilling of the side-track we encountered four potentially oil-bearing intervals. The first of 6 meters between 4,535 and 4,541 meters; the second is of 20 meters between 4,554 and 4,574 meters; the third is of 59 meters between 4,635 and 4,694 and the fourth is of 36 meters between 4,812 and 4,848 meters. Subsequently we perforated 75 meters of the intervals identified. "

Total of 125 metres of interval identified at these depths, if 802 show similar intervals then this will give an indication of the potential extent of oil reservoirs on this structure.

" Deep Well A5

Background

The well was drilled in 2013 to a depth of 4,432 meters. High pressure resulted in the well becoming blocked with excess drilling fluid and debris from the reservoir.

Subsequently a side-track at an angle of 15 degrees from a depth of 4,082 meters was successfully completed and a 5-inch liner run to the new bottom of the well.

Potential oil-bearing intervals of 105 meters have been identified.

For 15 days between 23 October 2017 and 27 November 2017 the well flowed at the rate of approximately 3,800 bopd before being restricted by a partial blockage, resulting in the flow rate falling to some 1,000 bopd.

Recent attempts to clear the well have been hampered by unwanted metal being lost in the well. Attempts to pull the metal from the well were not successful and the Company decided to remove the unwanted metal by using specialist milling tools to grind it down to a level where it should not interfere with the operation of the well.

Caspian Sunrise is pleased to report that milling operations continue to make progress at a current depth of 4,152 meters and expects to be in a position to test the well in the not too distant future. "

Arrowtown, I don't think you realise how close to the mark you are, the same is true for well 142, whether the trigger point is the payment of dividends or the restrictions on selling their production through sanctioned international transport routes, we will never know however, these delays in production maybe a well timed postponement of taking profits until the circumstances are right for the company and shareholders to maximise the value of production.

Only time will tell.

Snudge, the short answer would be to go back and look at all the RNS announcements for each well to get the best understanding of what happened to each well or go to the annual financials as the status of most wells are summarised within the Chairman's and Directors reports, each year.

However, Caspian has found oil bearing intervals in all of the deeps that they have drilled and even produced significant quantities from A5 for short periods, but all of them experienced difficulties with the high heat and pressure that exists at depths below the salt layer. They have tried many different ways to try to control the oil flow, whilst getting the wells ready for test production, using heavy mud to try to suppress the pressure in the well, while they case it and prepare it for production. The mud is so heavy that it gets stuck and then they experience difficulties trying to unblock it, not to mention dropping drill bits and equipment down the wells.

All of the wells have been drilled at strategic positions over the two main structures, Airshagyl and Yelemes Deep to try to determine the possible extent of the oil down there. They reckon the Airshagyl structure could be 58 square kilometres equivalent to surface area and some of the oil columns and intervals detected are very thick, so the potential is massive.

Well A5 on the Airshagyl structure, flowed at 3,800 bopd when they first drilled into the oil column, which after experiencing difficulties with controlling it and reducing the choke size it then flowed at 1,000 bopd for another short period before they once again had to shut it in to try to get control with the pressure. This well has had many attempts to re-open it, all so far unsuccessful.

The point is the oil is down there in massive quantities, they just have not been able to prove it up and get any of the wells into commercial production.

Well 802 is the current deep well being drilled on Yelemes and then they will have another go at Well A5 to try the horizontal drilling technique to see if this gets it flowing in a controlled way in Q2 or Q3 of 2023.

In the meantime they just sell production locally from the MJF structure from shallower wells, which provides sufficient cashflows to pay for all operations and the current dividends being paid out to shareholders.

The last CPR was dome some years ago just after oil flowed from the South Yelemes shallow wells, at that time A5 was being drilled on the Aryshgyl structured MJF drilling had just begun. Anyway the reserve report was issued by Gafffney Cline the results of which are disclosed in all subsequent Annual reports. Essentially small proved reserves but massive potential (contingent reserves) from other structures, still yet to be proved. The Company could have undertaken an updated reserve report to disclose the proved reserves from the MJF structure, however, has always delayed this process for whatever reason, probably because they want to get it done when they can quantify the reserves from the success at one of the deeps. Eitherway, the next CPR report, when completed will already significantly enhance the reserve picture for Caspian, even with just the success seen at the MJF structure alone. The process probably takes 4-6 months to complete, once commissioned as reserve engineers would most probably have to visit Almaty to meet with the geologists there and go through all of the data in Almaty.

Rav, if you have time, to get an indication of how the share price reacts to operational updates on deep well drilling results, go back and review past updates and share price movements pre and post news. Typically the price rises on anticipation of news and then may re-trace as usually the news relays issues and delays with completion of work and complications that can arise. Well 802 has already given indications of oil shows, on the way down to current depths, so there will be further work to do to complete testing at these intervals, however, the big question is whether oil shows exists at the deeper levels, similar to those found in well 801. Always difficult to predict what will happen from here, but long term this is a good hold, as revenues from the MJF structure alone will sustain current dividend levels, irrespective of what happens with 802.

All going well with the added bonus of establishing the market rate for hiring out the drilling vessel. So far the majority of wells drilled in the Caspian Sea basin have been undertaken by the consortium KCO, exploring the Kashagan offshore field. This is a multi billion dollar (in excess of $100+ billion invested so far) project exploring and developing this huge discovery offshore in the Caspian basin. Wells drilled so far have been by constructing berms, building small islands in the middle of the Caspian sea before drilling down through the berm. Hugely costly and expensive.

So this new project led by ENI on their IOC project (ENI/AGIP are also major investors in KCO), who have decided to use the boat to drill one of their exploratory wells to 2,500 meters, will have a huge impact on Caspian's profitability going forward. The Istay operating company (IOC) will have been awarded an offshore license with the usual work commitment of several exploratory wells, no doubt, that they have to fulfil within a given timeframe. So this maybe one of many that they have to drill as part of their work program. Not many alternatives if they do not plan on building berms, so this is not just a standalone $9million income to Caspian, but a whole potential revenue stream going forward, if successful.

Still think that cashflows will be the main driver of the share price from hereon, as the dividend income and associated income stream that this provides the investor will be the main determinant of market valuation going forward, whilst this policy of guaranteeing monthly dividends is in place. I suspect bringing further MJF wells back on line will be the next step jump in income and 802 will be a longer term project as results of testing the various intervals will not immediately result in productions and revenue streams until all possible intervals have been evaluated. Ultimately it will have to go onto a 90 day test before it can go into long term production, so the timescale for this will be stretched over a longer timeframe, as we have seen in the past with other deeps. Obviously 802 has the potential to transform production levels if successful.

So much potential now in play for Caspian. Lots of upside.

KK, off that handicap in that year and at that Club you must have known Mr Donaldson ?

KK, festive greetings to you !

Agree with the logic, however, I am assuming that there has to be a limited amount of financial information that has to be gathered from the accounting team back in Almaty where all the financial records are kept in the local currency to be able to calculate the free cashflow and basic monthly management accounts/information data that the Board needs and should at least review before declaring the dividend. This should be the minimum procedure they look at before making their monthly declaration of dividends. So as all office/admin staff will probably not be working between 1st Jan and 10th Jan, this financial data will not have been prepared yet for the dividend announcement to be made. We all know how long it normally takes for them to close the books and records ! I suspect we are just going to have to wait for this particular monthly dividend announcement, all other months should come out as usual.

Other listed companies will only declare dividends when financial information is available to them, so am assuming the same procedure will be true for Caspian.

It is quite normal in Kazakhstan for staff to take a couple of weeks off work during New Year and their Orthodox christmas which is 7th January, so typically the working day starts on 10th January each year, both in Russia and Kazakhstan and the other Central Asian countries. Clive could obviously get the communications prepared, however, it will involve the Kazakh Directors to sign it off and you can be sure they will be celebrating their Xmas eve today and xmas day tomorrow and are probably only just recovering from their New Year celebrations, so don't expect much before next Tuesday 10th, possibly Monday.

Oops yes......, quite right on both fronts, started today as I mean to continue with a glass of bubbly. Could be wishful thinking but yes, once a month. Should also delete the word "indirect" as well we want to get all corrections in. Enjoy tonight all, lots to celebrate for the New Year and beyond.

Caspian Sunrise (formerly Roxi Petroleum) was listed on AIM back in 2007, comprising an amalgamation of various exploration licenses around Kazakhstan. Over the years the company has sold off those license areas that showed least potential to focus on BNG. It has completed a 3D seismic survey covering the majority of the 1300 square kilometres of the acreage and drilled numerous exploration wells into various promising structures: Airshagyl, Yelemes and MJF. Oil was discovered in all structures, but only production has occurred from the South Yelemes and MJF structures to date. Discoveries have been made at various horizons including some of the deep wells that have been drilled upto 5000 meters, although none of these have been brought into commercial production yet due to the difficulties in test flowing the deep wells due to the high pressure that exists at those depths. The shallower structures (upto 2500 meters) have been producing now for some years and the company currently has production of approx 2400 bopd from the MJF structure. The Company still owns 99% of the BNG licence area, has no external debts and is completely self financing from its current operations and existing production from the MJF structure. A further 300 bopd can be produced from South Yelemes shallows once the wells are re-opened. It is currently paying dividends and has committed to pay a monthly dividend of £1m per day or upto 35% of free cashflows, if higher, going forward. The company has 25 year production licenses in place for the MJF and South Yelemes fields which enables it to export it production to the international market, subject to fulfilling a small percentage of sales to the domestic marketplace. Even with this ability, the company has decided to currently sell 100% of its production to the domestic market (mini refineries) until current sanctions and restrictions over the russian pipelines network have been lifted. Other indirect interests held include Block 8 and a multi purpose drilling vessel that can be hired out, however, these are not part of their core activities and although will bring some upside to the business in the future, it is not that important to the business model at this stage. Current focus: bring more MJF wells into production using the newly discovered horizontal drilling technique, bring South Yelemes back into production and completing Yelemes deep well 802 and working over Airshagyl deep well A5 thereafter. From this work production is expected to increase further in 2023 to 4000 to 5000 bopd and beyond as further wells are completed. A very bright future and only patience is needed now for the development of this little jewel to flourish into a fully developed production company.