Caspian Sunrise Regulatory News (CASP)

Roxi Petroleum PLC

("Roxi" or the "Company")

Operational Update

Roxi, the Central Asian oil and gas company with a focus on Kazakhstan, is pleased to further update the market with news of progress at its BNG asset, and in particular progress at its Deep Well A5.

Background 

The BNG Contract Area is located in the west of Kazakhstan 40 kilometers southeast of Tengiz on the edge of the Mangistau Oblast, covering an area of 1,561 square kilometers of which 1,376 square kilometers has 3D seismic coverage acquired in 2009 and 2010. 

Roxi has a 58.41 per cent interest in the BNG Contract Area.

Deep Well A5

Background

The well was drilled to a total depth of 4,442 meters. Casing was set to a depth of 4,077 meters and the core sampling revealed the existence of a gross oil-bearing interval of at least 105 meters from 4,332 meters to at least 4,437 meters.

The well is to be tested on an open-hole basis. This is principally because there is a stuck pipe in the interval between 4,322 and 4,401 meters. The stuck pipe is not expected to affect the outcome of the 30-day test and we will seek to remove it following the completion of that test.

Blocked well

In December 2014, its was announced that commencement of the 30-day well test at Deep Well A5 was dependent upon the removal from the sub-surface of fluids used in the drilling of the well, so that the oil may flow to the surface ( "cleaning-up" the well).

The extremely high-pressure in the well (7,000 psi at surface) required the use of drilling fluids with a high density (2.16 g/cm3) and removing this high density drilling fluid has been problematic.

Some of the excess drilling fluids were ejected due to the high well pressures, but it became clear that intervention would be required to complete the operation.

As previously announced it was decided the best way to clean-up the well for testing would be using coil tubing equipment. However, as also previously announced, due to the high pressure in the well, the coil tubing equipment became stuck at a depth of 2,996 meters. The coil tubing was cut at a depth of 30 meters at wellhead. Since December 2014, work has continued to remove both the remaining excess drilling fluid and the coil tubing.

Current position

Roxi is pleased to announce that the major part of coil tubing has now been removed from the well. However 50 meters of coil tubing remains in the well and that core tubing still contains drilling fluids, which are trapped by a metallic object believed dropped during the clean-up works.

Roxi plans, during the remainder of February, to remove these obstruction using conventional fishing techniques with a target that the 30-day well test can start in March 2015.

If necessary part of the casing will be removed towards the bottom of the well at depth of 4,073 meters, to allow the open-hole testing to be conducted at a higher level than previously expected.

Further announcements on the work to remove the obstruction will be made in due course.

Stuck pipe

As previously announced, once the 30-day well test is complete, should we not be able to remove the stuck pipe we would, as a last resort seek to sidetrack the well from a depth of 4,320 meters running a 4.5 inch liner to the bottom of the well and then continue to test on a conventional basis. We expect this would to take up to a further 3 months to complete following the 30-day well test.

Deep Well 801

Deep Well 801, which was spudded on 15 December 2014, is now to be drilled to a total depth of 4,950 meters targeting the Lower Carboniferous. The well is being drilled by Sinopec, the Chinese multinational, at a fixed cost of $11 million.

Deep Well 801 is located approximately 8 kilometers from Deep Well A5 and will be targeting the same structure as Deep Well A5 and in the Lower Carboniferous. Drilling has reached 2,978 meters without incident.

Our plan is to continue to drill to a depth of 3,550 meters before pausing to set casing to that level. We then plan to drill through more difficult intervals comprising first a salt layer of approximately 300 meters starting at approximately 3,540 meters and then an 800 meter section with high pressure in the lower Permian.

The final 310 meters to be drilled to a Total Depth of 4,950 meters is expected to be less difficult to drill. Periodically during the remaining stages of drilling work will pause, to set casing.

We continue to expect the well will reach Total Depth by mid April 2015.

Deep Well A6

Roxi plans to spud Deep Well A6 following the clean up and removal of the stuck pipe at Deep Well A5. The well will use the same rig as for Deep Well A5 and is planned for a Total Depth of 4,700 meters targeting the Lower Carboniferous.

Deep Well A6 will be located some 1,800 meters from Deep Well A5 and will be targeting the same oil-bearing formation revealed in A5 in the Lower Carboniferous.

The contract for drilling the well has yet to be finalised but the recent and sustained fall in the price of oil has significantly reduced the third party contractor costs of drilling and Roxi expects the costs of this and further well be be significantly lower than for Deep Wells A5 and 801.

BNG Shallow

Background

Our shallow wells at BNG are located in the South Yelemes portion of the BNG Contract Area extending over an area of 800 sq. km, a few kilometers from the deep prospects.

We have drilled 12 wells in this area with depths varying between 2,500 and 3,000 meters.

The quality of oil produced from our shallow wells is not as good as from the deeper prospect, as it has higher sulphur content. Over the medium term we plan to blend this oil with the higher quality oil to be produced from the deeper horizon to maximise overall BNG sales proceeds.

We are particularly interested in the Valanginian horizon, which we believe may extend to some 200 square kilometres and our approach has been to drill several wells to prove the size of this area.

Wells 54, 805, 806 and 807 were all drilled to depths between 2,500 and 3,000 meters and have all produced oil from either the Valanginian or Jurassic, and are considered by Roxi to be commercial.

Current position

Aggregate production from these wells is currently 375 bopd (219 bopd net to Roxi).

Testing continues at Well 143 with preparations underway to perforate intervals between 2692 and 2693.5 meters and also between 2,704 and 2,709.5 meters.

Comment:

Clive Carver, Chairman said

"We are pleased with both the pace and results to date of the clean-up work at Deep Well A5. Based on current progress we expect the 30-day well test will now start in March.

We are also pleased with the drilling to date at our second Deep Well 801. The lessons learned at Deep Well A5 should help us greatly now we approach the most difficult phase of the well."

Enquiries:

Roxi Petroleum PLC Clive Carver, Chairman

+7 727 375 0202

WH Ireland Ltd James Joyce / James Bavister

+44 (0) 207 220 1666

Qualified Person

Mr. Nurlybek Ospanov, Roxi's senior geologist who is a member of the Society of Petroleum Engineers ("SPE"), has reviewed and approved the technical disclosures in this announcement.