Future opp13 Nov 2023 10:15
Back from a nice break in Cyprus.
As I see it, our Casper is in the doldrums currently but won't take much to get the wind back in those sails.
Reading the last news update was interesting. Our Clive has committed to provide detailed communications and in a more timely manner and I believe that was one of the better operational updates for detail.
He started the update with the negatives ie supply chain issues and the inability to reap the benefits from gross crude prices but the update was generally positive.
If you take oil production and prices as a starter. At 2000 bopd Caspian are producing much more oil now than they were producing prior to 2019, c 50% more and you only have to go back a year where they were producing 3400bopd until the demise of 141/142. Historically they were producing c1300 bopd and still managing to facilitate the drilling required to meet licence requirements and the oil prices were lower. If you look back at the oil price over the last 16 years, you'll see an average price of $72. Currently we are achieving c$33 from MR/Domestic sales which is far more profitable than they've achieved historically, even when they were exporting. They've stated that they need crude prices of $100+ to make it worthwhile so you can see how well they're doing from current net prices on the domestic market. This is further improved by trading their own oil and they've stated that this is important revenue going forward. In summary, they're in a far better financial position today than they've been since incorporation in 2007, I take that as a huge positive.
The key priority now is to build production and as we know, we're waiting for news on 3 wells imminently that could build production considerably. 142 news is now due as are B8 wells. A 142 success could add 50%+ to current volumes which obviously makes a huge difference financially and B8 wells are significant as they will be Caspian’s first deep well successes with unknown reserves to be assessed. We won’t get payment for the oil until usual regulatory approvals attained but success on these 2 wells will be transformational for all shareholder.
They’ve made the statement on BNG ie finalise licence commitments by drilling 803 and A7 whilst focussing on the remedial work on all the deeps drilled to date ie A5,A6, 801,802. I’m glad to se that there’s no more new deeps to be drilled, firstly as it’s costly and secondly, they now can focus on 6 wells that could transform all our fortunes. I’m also happy to see that they’re planning to work with a partner on 802 on a profit share basis, if this works, I hope they do the same with all the deeps. Drilling competence is the issue and this has to change. The oil has been discovered but pointless continuing to throw good money after bad with continued remedial work if nothing changes so hopefully we see partnership projects continuing if 802 is successful.
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