Caspian Sunrise Regulatory News (CASP)

Caspian Sunrise PLC

("Caspian Sunrise" or the "Company")

BNG operational update

The Board of Caspian Sunrise are pleased to provide the following operational update at its flagship BNG asset.

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.

Current position

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.

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. 

Recently, the Company's approach with this well has been to allow the build-up of pressure inside and outside the tubing to reach its natural maximum. Caspian Sunrise plans at the appropriate time to divert this natural pressure back into the well to stimulate oil flow.

The pressure outside the tube built to some 610 ATM in December 2018, with pressure in the well reaching 380 ATM (ATM is the standard unit of pressure where one ATM is equivalent to 1.01325 bar). The well was opened before Christmas for several days to relieve the pressure outside the tube, which fell to around 100 ATM.

Current position

The pressure outside the tube is currently 490 ATM with the pressure in the tubing 300 ATM. Caspian Sunrise is now waiting for the natural pressure in the well to build further before looking to use that pressure to further stimulate the well ahead of testing.

Deep Well A6

Background

Deep Well A6 was drilled on the Airshagyl structure in 2015. The well was drilled to a depth of 4,516 meters but given the experience gained in drilling the earlier deep wells, the drilling phase proved easier although issues were encountered when drilling through the salt layer.

Caspian Sunrise has twice attempted without success to perforate up to a 60-meter section of the 100-meter oil bearing interval, using different contractors on each occasion. After further investigation it appeared that both attempts to perforate the well failed with little or no penetration of the casing to allow oil to flow.

Current position

We have appointed new advisers experienced with getting deep high-pressure wells to flow. In January 2019, a new well intervention plan will be finalised, after which the required personnel and equipment will be mobilised to commence the workover.

Deep Well A8

Background

Deep Well A8, was spudded on Nov. 23, 2018 with a planned Total depth of 5,300 meters. The well will target the same pre-salt carbonates that were successfully identified in the Deep Well A5. We also plan to evaluate deeper carbonate targets of Devonian to Mississippian ages.

Based on our interpretation of the 3D seismic data we expect to encounter the top of the salt layer at a depth of about 3,900 meters.

The well is being drilled in two parts. The first 4,100 meters, to the expected base of the salt layer, will be drilled by Sinopec, with a separate contract issued to drill the final stages of the well.

Current position

The 17 ½ inch hole was drilled according to plan to 2,000m (Lower Cretaceous) with casing was set and cemented. The next drilling stage with diameter of 12 ¼ inches has begun and reached a depth of 2,127 meters without incident. We expect to reach 4,100 meters in April 2019 with completion, and an initial well test in Q3 2019.

Shallow Wells - MJF structure

Production levels

Total oil production in December 2018 from the 5 wells operational in the MJF structure and the 4 wells in the South Elemes structure was 49,255 barrels, (average of 1,589 bopd), with the domestic price at which the oil was sold rising to some $21-22 per barrel.

Completed workovers

The remedial work at Well 146 has been completed with the well being re-perforated pending testing. If successful the Company would have 6 wells producing on the MJF structure.

MJF Licence upgrade

A recent change in the Kazakh regulations has reduced the period during which licence holders generally can appraise individual structures from 6 years to 5 years. In return there is no longer the requirement to make social contributions during the reduced 5-year appraisal period. This change is expected to result in material savings to the Company over the lifetime of the licence.

The entire BNG licence has now been converted to a 5-year appraisal period and the submission to move the MJF structure to a full production basis has been filed with the relevant Kazakh authorities. We continue to expect an early approval after which we would be able to sell the majority of the oil produced from the MJF structure by reference to world rather than domestic prices.

Following receipt of the full production licence for the MJF structure we plan to embark on an in-fill drilling campaign for up to 10 new shallow wells, which we expect would increase the productive capabilities of the MJF structure from its current approximately 2,000 bopd to an enlarged approximately 4,000 bopd.

Ends

Qualified Person

Mr. Nurlybek Ospanov, Caspian Sunrise PLC's Chief Geologist / Technical Director who is a member of the Society of Petroleum Engineers ("SPE"), has reviewed and approved the technical disclosures in this announcement.

This announcement has been posted to:

www.caspiansunrise.com/investors

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.