RE: The Game is on6 Apr 2024 12:17
BM,
FYI
21p WHI Fair Value Estimate
Having reported 2021 production of 1,462 barrels of oil per day, investors can expect significant production growth from Caspian Sunrise’s shallow oilfields, namely, the MJF and South Yelemes oilfields. Already, the company reported recent production (22 December 2022) of 2,300 barrels of oil per day – all from its shallow MJF field – after bringing its first two horizontal wells onstream. The company continues to advance well completion methodologies that are intended to unlock the world-class potential of its deep assets, namely, the Airshagyl and Deep Yelemes oilfields. Having emerged from a context of distress into a position of strength with a positive outlook, we ascribe a fair value estimate of 21p to Caspian Sunrise (see Table 1), from “Under Review”, of which 7.9p relates to the company’s shallow assets with the remainder relating to its deep assets. We estimate that the full success case value of the company’s assets amounts to 102p. We include 100% of the value of the company’s shallow assets and 10% of the value of the company’s deep assets in our fair value estimate.
MJF Structure: Caspian Sunrise completed its first horizontal well, Well 154, on 26 April 2021 – drilled into the MJF structure. On production, the well produced at a stable rate of 600 barrels of oil per day with higher peak production on short-term tests. The well essentially transformed the productive potential of the MJF structure by showing that horizontal wells can achieve production rates that are multiples higher than the production rates of standard, vertical wells. On 13 October 2021, the company completed its second horizontal well, Well 153, which produced at a commercial, stable rate of circa 830 barrels of oil per day. Both of the company’s horizontal wells continue to produce at stable rates near levels of 600 barrels of oil per day. We believe that horizontal wells have transformed Caspian Sunrise’s growth potential and financial outlook.
Airshagyl: Based on our volumetric assessment, we estimate that the company’s deep Airshagyl field would recover 305 million barrels of oil under a success-case. The field is both deep and significantly overpressured, which creates drilling challenges pursuant to which the field has yet to establish long-term stable oil flow – effectively the field has been produced at highly significant short-term rates from one deep well (2,000 barrels of oil per day). Like at the super-giant Tengiz field (9 billion barrels of recoverable oil) that is circa 40km away, the appraisal/testing period has been challenging. The company is hopeful that it will improve its well drilling/completion methodologies to allow the reservoir to produce at its full potential at stable rates. The company announced on 25 January 2022 that the recently drilled Deep Well A8 produced at a stable rate of 120 barrels of oil per day (from only one of three productive intervals) fo
Sign In
Follow the stocks
