Caspian Sunrise Regulatory News (CASP)

Caspian Sunrise PLC

("Caspian Sunrise" or the "Company")

BNG operational update, 3A Best acquisition update & Director/PDMR Shareholding

The Board of Caspian Sunrise is pleased to report the completion of the previously announced acquisition of 3A Best Group JSC ("3A Best") ("the Acquisition"), most recently announced on 13th November 2018.

Background

3A Best owns a Contract Area of 1,347 sq km located close to the Caspian port city of Aktau in the Mangystau Province of Kazakhstan. The Contract Area is adjacent to and runs under the commercially successful Dunga field, which was discovered in 1966 and developed by Maersk Oil.

Based on an assessment of the geology Caspian Sunrise's technical team believe some of the geological characteristics of the Dunga Contract Area are also present at 3A Best. Additionally, they believe the area 2,500 meters below the Dunga Contract area, which forms part of the 3A Best Contract Area, also indicates the likely presence of oil.

490 sq km of 3D seismic has been shot. 1,327 linear km of 2D has been digitised and reprocessed. C2 reserves, using the Soviet system of classification, of 3.67 million tonnes (approximately 26.8 mbbls) have been assigned to the 3A Best Contract Area.

Two wells have been drilled on the Contract Area in recent years, both encountering water and signs of oil & gas, although neither was commercially successful.

For the year ended 31 December 2016 the loss after tax was $1.4 million.

Caspian Sunrise, by completing the acquisition of 3A Best, becomes responsible for the outstanding work programme commitment represented by the drilling of one well to a depth of 3,000 meters at an estimated cost of up to approximately $2 million.

Revision of terms

The consideration set out in the sale and purchase agreement ("the Agreement") as announced on 29 May 2018, extended as announced on 13 November 2018 and approved by the independent directors, was for the issue 149,253,732 new Caspian Sunrise shares ("the Consideration Shares") at a notional issue price of 12p per share. This valued 3A Best at a theoretical valuation of approximately $24 million.

In recognition that the price at the close of business on 18 January 2019 was 6.9 pence per share, all the parties to Agreement have agreed that the same number of Consideration Shares be issued but at 7.0 p closing price, ("the Revision"), thereby bringing the theoretical valuation in line with the actual valuation of some $13.5 million.

Related Party Transaction

As a result of the shareholdings in 3A Best of the family of Kuat Oraziman, the Chief Executive Officer of Caspian that holds one third of 3A Best and of Kairat Satylganov, its former Finance Director who holds one third of 3A Best and resigned as a director of the Company in February 2018, the Acquisition is considered a related party transaction under the AIM Rules. The independent directors of the Company in respect of AIM Rule 13, being Clive Carver and Edmund Limerick, consider, having consulted with WH Ireland, that the terms of the Acquisition, including the Revision noted above, are fair and reasonable insofar as shareholders of Caspian Sunrise are concerned. 

All of the outstanding conditions, including the issuance of a new licence, have now been satisfied. Accordingly, Caspian Sunrise will issue and seek listing for the Consideration Shares.

Option Shares

The Company is also pleased to announce that Kuat Orazaiman, CEO, has exercised all his 4p options over 4,200,000 Caspian Sunrise shares ("Option Shares"). Accordingly, Caspian Sunrise will issue and seek listing for the Option Shares.

Shares in issue

Application will made for the Consideration Shares and Option Shares to be admitted to trading on AIM (the "Admission"), and dealings in the new ordinary shares are expected to commence on or around 28th January 2019. Following Admission the total number of ordinary shares in issue will be 1,824,327,552, of which the family of Kuat Oraziman, will hold 799,657,858 shares representing 43.83%, of which Kuat Oraziman will directly hold 41,485,330 shares representing 2.27%.

Kairat Satylganov, formerly CFO, will hold 225,433,941 shares representing 12.36%

Shares not in public hands will be 30.6%.

The Notification of Dealing Form, under the Market Abuse Regulation, for Kuat Orazaiman can be found below. 

NOTIFICATION AND PUBLIC DISCLOSURE OF TRANSACTIONS BY PERSONS DISCHARGING MANAGERIAL RESPONSIBILITIES AND PERSONS CLOSELY ASSOCIATED WITH THEM

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