14 Jun 2010 16:25
Caspian Holdings Plc
("Caspian" or the "Company")
14 June 2010
Operational Update
Caspian Holdings (AIM:CSH), the oil and gas development company provides the following operational update
United States Assets
Over the last year Caspian, through its 50% share of Black Gold Inc, has embarked on a programme of purchasing neglected assets in partially depleted US oil fields. Typically these are fields that have produced large quantities of oil with significant remaining in-situ resources and with existing well infrastructure in place but which yield very low quantities of oil in the region of 1-10 barrels of oil per well per day. The first such project is leases in the Irvine field in Kentucky. Black Gold is accumulating leases across the Irvine field. These wells are generally over 20-40 years old and in need of work-over to improve their operating efficiency. While of little interest to oil Majors, Caspian Holdings believes that these wells offer good potential for cash flow and margins at oil prices of over $50 per barrel. The properties are also likely to benefit from a low risk profile and excellent access to market with existing embedded infrastructure.
Black Gold currently has several wells in production on the Barnet lease of the Irvine field producing in the region of 90-100 barrels of oil per month and providing a modest positive contribution to cash flows. The group expects the expansion of operations to provide further more meaningful cash flows. Black Gold has recently installed a central gun barrel separator with large oil water separation capacity and should benefit from increased overhead recovery when additional wells are added.
The Group has identified and is actively pursuing other similar opportunities for lease expansion.
Kazakhstan
As it was announced by the Company on 9 April 2010 the Supervisory Board in the Civil and Administrative Cases of Kazakhstan's Supreme Court has confirmed the judgment of the Appeal Court to revoke Taraz LLP's rights to the field.
Caspian continues to seek routes to reinstate investors' value. The assets are completely written off in the Company balance sheet so any remedy should be positive for investors. However, it is impossible to say what level, if any, remedy can be achieved.
The Company will continue to update the market as required under the AIM Rules.
Enquiries:
| Caspian Holdings Plc | Grant Thornton Corporate Finance | HB Markets |
| Michael Masterman | Gerry Beaney | John Millers |
| T: +44 (0) 7791 288381 | T: +44 (0) 20 7383 5100 | T: +44 (0) 20 7382 8300 |
| www.caspianoil.co.uk |
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