Last checked at 30 Mar 2020 07:00
Caspian Sunrise PLC
("Caspian Sunrise" or the "Company)
BNG Operational update &
Significant increase in production
Introduction
The Board of Caspian Sunrise is pleased to announce the successful perforation of New Well 150, the first of the planned infill wells on the MJF structure, and that the well is flowing at the rate of approximately 500 bopd using a 7 mm choke.
The Board is also pleased to provide a general operational update from its flagship BNG asset.
Background
New Well 150 was spudded in December 2019, and on 18 March 2020, we announced it had been completed and was being readied for perforation. On Friday 27 March 2020, following the earlier perforation of the first of three identified intervals, at a depth between 2,334.5 and 2,338.5 meters, the well has started to produce oil at the rate of 500 bopd day, using a 7 mm choke.
This production, together with the production from five existing operational wells on the MJF structure and the four wells on the shallow South Yelemes structure increases total production to approximately 1,800 bopd.
New Well 153
The Board is also pleased to report that New Well 153, the second of the infill wells at the MJF structure, has reached a depth of 1,956 meters without incident.
Well 153 has the same 2,500 meter Total Depth as New Well 150, and is expected to produce similar quantities of oil.
Our expectation is that the well should be completed in the first half of April and, provided there are no complications, enter production before the end of April.
MJF infill drilling programme
As previously announced after New Well 153, the infill drilling programme at the MJF structure will be suspended.
Deep Wells
Further to the announcement of 18 March 2020, the Company confirms that as a result of the impact of the Covid-19 virus it has temporarily switched its operational focus away from Deep Well A5 to Deep Wells A6, 801 & A8.
The BNG oilfield like many others works on the basis of two crews each working 14 days on and 14 days off. The usual crew changeover was deemed unsafe in the context of the Covid-19 virus. We therefore agreed with the crew in the field that they would stay longer but for the time being they would not be replaced once they leave.
To maximise the output of the crew currently working we decided that they should move away from Deep Well A5, which will require a routine rig movement to replace a broken pipe, to focus on Deep Wells A6, 801 & A8, which have planned acid treatments that do not require rig movements. In this way we have the greatest chance of getting up to three of the four deep wells to flow before the crew currently in the field needs to withdraw.
The coil tubing equipment to clear out these wells is on site and is operational. Agreement has been reached with the specialist acid supplier for delivery to the field and we now expect the treatments to be completed by the end of April.
As regards Deep Well A5, we will reconsider recommencing operations once work planned at the other deep wells has been completed, subject to any restrictions related to the Covid-19 virus.
We remain confident in the ultimate outcome for Deep Well A5 and continue to expect production of 1,500 bopd from that well once operational.
Other matters
Caspian Sunrise is and remains a low cost operator, well used to dealing with low oil prices. Until August 2019, all oil sales were at domestic prices typically in the range $18-19 per barrel.
As a result of the actions taken to date and with the benefit of a further devaluation in the Kazakh Tenge against the US$, the day to day cost base of the Group is now better aligned with expected revenues.
The Group has no debts to external financial institutions.
Ends
Clive Carver, executive Chairman said:
"Although expected the success of the first of the infill wells drilled on the MJF structure is very welcome. It confirms the merits of our dual approach of drilling low risk wells where income comes quickly and at a relatively low cost together with continuing to attempt to bring as many of the four existing deeps wells into production, where the risks are higher but the impact of success would be much greater.
We look forward to updating the market in due course with news of New Well 153 and progress at Deep Wells A6, 801 & A8.
Contacts:
Caspian Sunrise PLC
Clive Carver
Executive Chairman +7 727 375 0202
WH Ireland, Nominated Adviser & Broker
James Joyce +44 (0) 207 220 1666
James Sinclair-Ford
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.