Caspian Sunrise Regulatory News (CASP)

Caspian Sunrise PLC

("Caspian Sunrise" or the "Company")

BNG operational update and May 2019 production report

Introduction

The Company is pleased to provide an operational update at its flagship BNG asset.

Deep Wells

Deep Well A5

After further evaluation of the remedial options open to us we have concluded that a side-track from below the salt layer is preferable, at this stage, to a side-track commencing above the salt layer.

Accordingly, we now plan to use laser cutting equipment to cut the liner and drill pipes at a depth of 4,005 meters and then remove a 30 meter section of liner and drill pipe, before commencing a new 500 meter side-track from a depth of 4,035 meters.

A contractor has been identified and the specialist equipment is being sourced with the target that the side tracking itself can commence in Q3 2019. 

Deep Well A6

Following extensive analysis using the input of international consultants we have decided to focus on the lower of the two intervals of interest where we believe the potential is greater, and which is correlated with intervals already identified at Deep Wells A5 and A8. It is also the interval of interest where any damage caused by previous attempts to perforate the well is minimal.

After re completing the bottom of the well to prevent water ingress we now plan to perforate the lower of the two intervals of interest.

We will return to the upper interval of interest at a later time.

Deep Well A8

Drilling at this well has reached a depth of 4,440 meters. The mudlogs indicate that we are still in the interval identified as oil bearing and starting at a depth of 4,346 meters. We plan to take a further core sample, of 18 meters, starting at 4,440 meters to confirm the presence of oil.

Once we have established the bottom of the oil bearing interval, we plan to drill for a further 30 meters and then conduct a wireline analysis of the entire horizon, after which we will case the well to a depth of 4,500 meters.

Deep Well 801

We continue to wait on contractors and equipment to conduct a high-pressure acid treatment and we expect work will commence in June 2019, taking approximately two months to complete.

We have continued to regularly open the well to relieve pressure build-ups. The last such opening resulted in oil and gas coming to the surface with minimal water. However, the limited quantities recovered confirm the presence of significant amounts of obstructive, hardened, high-density drilling fluids in the well.

Shallow wells

MJF structure

The May production figures as set out below confirm our belief that in prioritising cash to fund the group, while waiting on the much-delayed receipt of the MJF licence upgrade, the productive capacity of the better producing wells is declining at a rate faster than necessary, as periodic routine maintenance work has been deferred to allow cash to be generated.

No significant workovers on these better producing wells have been conducted since they first came on stream in 2016 and 2017, and until we are able to do so we will continue to expect further declines in the daily rates of production.

We believe that following workovers each of the 3 best producing wells at the MJF structure should significantly increase their daily rates of production. Additionally, on receipt of the MJF licence upgrade, we will start a campaign to drill a further 10 infill wells on the structure with a view to significantly increasing aggregate daily production capability.

Potential New shallow structure

As previously reported, we believe that the initial results from shallow well 808, drilled on a potential new structure possibly equivalent to the MJF structure, were unreliable. 

Plans to re-perforate the well have been delayed for operational reasons.

MJF licence upgrade

We continue to have regular contact with the various regulatory agencies concerned with the issuance of the now very overdue MJF licence upgrade. Based on these discussions we remain confident that we will be able to sell oil by reference to international prices in Q3 2019.

May production numbers

Production from our shallow wells for May 2019, was in aggregate 42,434 or 1,396 bopd (April 2019, 44,115 barrels or 1,471 bopd), with oil sold at an average price of $19.00 per barrel (April $19.00 per barrel).

Compared to April 2019, average daily production fell as the production from overworked wells declined at a faster rate than previously experienced.

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.