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12 Oct 2020 07:47
Caspian Sunrise PLC
("Caspian Sunrise" or the "Company")
Operational update &
Response to shareholder questions
Introduction
The Board is pleased to update the market with news of progress at its flagship BNG Contract Area and of the acquisition of the Caspian Explorer.
The Board is also pleased to announce that responses to shareholder questions received following the publication of the Group's interim results will later today be uploaded to the Group's website www.caspiansunrise.com/investors
Shallow Wells
MJF structure
For the majority of September 2020, average production volumes at the MJF structure were approximately 1,620 bopd although due principally to planned maintenance work at the loading station the average for the month was approximately 1,340 bopd.
The workover at Well 141 has been completed and the well is expected to resume commercial production in the next few days. Well 144 is the next to be worked over.
At New Well 151 work is underway to install a pump to increase the productivity of the well, which is expected to increase production to approximately 300 bopd. With Wells 151, 141 & 144 contributing the expectation is that MJF productive capacity would increase to between 2,200 - 2,500 bopd.
Our appeal against the historic costs assessed on the MJF structure, due to be repaid quarterly over a 10 year period, has yet to be heard following Covid-19 related court delays. The basis of the appeal is that the $32 million assessment for the whole BNG Contract Area has been allocated entirely against the MJF structure. As the MJF structure represents only 1% of the total BNG surface area, we are advised a pro rata charge is more appropriate. Until the court agrees we are required to meet the quarterly payments for the full assessment.
South Yelemes Structure
The Kazakh regulatory authorities continue to evaluate historic reserve information as part of the process of vetting our application to move the structure onto an export licence, under which a portion of the oil produced would be sold by reference to international rather than domestic prices.
On the award of the licence production from the South Yelemes structure is expected to re-commence at a rate of 300 bopd.
Deep Wells
Airshagyl Structure
A5
Following a conventional acid treatment the tubing is being removed from Deep Well A5 to allow the perforated interval to be further cleared by the use of the drillbit. We do not believe any further acid treatments will be required at this well.
A6 & A8
The planned acid treatments have been completed at both Deep Wells A6 and A8. Coil tubing will be used to continue the work to clear the well before an assessment can be made of the outcome of the acid treatments conducted.
Yelemes Deep Structure
801 & 802
In the event the acid treatments at A6 & A8 are successful the intention is to repeat the exercise at the already drilled Deep Well 801.
We have applied for a deferral to the existing 2020 work programme commitment to drill a further deep well, 802 on the Yelemes Deep structure. The application is now with the Kazakh regulatory authorities.
Caspian Explorer
We expect soon to complete on the acquisition of the Caspian Explorer on the terms approved by shareholders in February 2020. No contracts are in place for the future use of the drilling vessel. The Company is however aware of potential interest in developing fields in the northern Caspian Sea previously drilled using the Caspian Explorer.
Contacts:
Caspian Sunrise PLC
Clive Carver
Chairman +7 727 375 0202
WH Ireland, Nominated Adviser & Broker
James Joyce +44 (0) 207 220 1666
James Sinclair-Ford
Qualified person
Mr. Asslybek Umbetov, a member of the Caspian Sunrise technical team 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.
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