TIDMCASP
RNS Number : 6953H
Caspian Sunrise plc
07 April 2022
Caspian Sunrise PLC
("Caspian Sunrise" or the "Company")
Review of Q1 2022
Introduction
The Board of Caspian Sunrise is pleased to present a review of
the first quarter of 2022.
Civil unrest
The year began with the first significant instance of civil
unrest for several years. In early January we were forced to
suspend all operational activity for a brief period. While this had
only a small impact on the quantity of oil produced it had a bigger
impact at Well 142, which was at a crucial point and will now need
a further side-track before being brought back into production.
Russian sanctions
Our oil reaches the international market through the Russian oil
pipeline network. While we have not experienced any issues in
transporting our oil there has been an impact on the price at which
the oil is sold, as all oil emerging from the Russian pipeline
network is termed Urals Oil and is now subject to a $25 - $35 per
barrel discount to Brent.
In the event the Russian pipeline network becomes unavailable to
us or if the discount for Urals Oil widens further we would look
for alternative distribution routes.
Debt conversion
On 9 March 2022, independent shareholders approved the
conversion of approximately $6.2 million of debt provided by the
Oraziman family into new shares. This together with much improved
operational cashflows has paved the way for the Company's long held
ambition of paying dividends.
Dividends
On 5 April 2022, we posted a circular to shareholders to convene
a meeting to consider resolutions required to be passed to allow
dividends to start. If the resolutions are carried at the general
meeting scheduled for 22 April 2022, and subsequently confirmed by
the High Court, we would look to declare the Company's first
dividend in July 2022, as part of an ongoing quarterly dividend
programme.
Operations
BNG shallow structures
Production at the MJF structure continues to grow with
production at the end of March 2022 being approximately 2,142
bopd.
During the first quarter we worked on Well 142 and prepared for
the drilling of a horizontal well on the South Yelemes structure
targeting oil in the Sandstone, at a depth of approximately 2,430
meters.
BNG Deep structures
During Q1 2022, no significant work was undertaken at Deep Wells
A5, A6, or 801.
At Deep Well A8, two intervals were perforated and while oil
flowed following both perforations it was not at commercial levels.
We have therefore stopped work at A8 and are moving the rig to
drill the horizontal well planned for the shallow South Yelemes
structure.
Deep Well A7 was spudded in December 2022 with a planned total
depth of 5,300 meters targeting oil in the Carboniferous and
Devonian. By late March drilling had reached a depth of 2,150
meters without incident. Drilling was then paused, and the rig
moved to drill new wells on the shallow MJF structure, which we
believe will have a faster impact on production levels and
cashflows. We plan to resume drilling at A7 at a later date.
In H2 2022 the final deep well required under the BNG work
programme, Well 802, will be spudded. This well will also have a
planned total depth of 5,300 meters and be targeting oil in the
Carboniferous and Devonian.
Priorities at BNG
With oil prices high we are prioritising shallow well production
over further deep well drilling. Our target is to increase
production from the current 2,300 bopd level to nearer 3,500 bopd
and beyond as soon as possible.
The MJF structure has proved itself to be a reliable oil
producer and now we can again produce from the shallow structure
South Yelemes we have adopted this lower risk approach to making
the most of the current situation.
We will continue to work to bring the existing deep wells into
production, with our focus now moving to Deep Well A5 at which we
plan a further side-track later in the year. However, once all the
6 deep wells required under the BNG work programme have been
drilled we do not expect to any drill further deep wells on the BNG
structure without first bringing one or more those already drilled
into commercial production.
3A Best
We continue to work with the Kazakh authorities to renew the
licence at 3A-Best.
Caspian Explorer
The Caspian Explorer has been the subject of serious interest
from parties looking to charter it in 2023 and in buying it
outright. At the date of this report however, that interest has not
translated into any binding agreements.
Caspian Sunrise PLC
Clive Carver
Executive Chairman +7 727 375 0202
WH Ireland, Nominated Adviser & Broker
James Joyce +44 (0) 207 220 1666
Andrew de Andrade
Qualified person
Mr. Assylbek Umbetov, a member Association of Petroleum
Engineers, 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 to
constitute inside information as stipulated under the retained EU
law version of the Market Abuse Regulation (EU) No. 596/2014 (the
"UK MAR") which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018. The information is disclosed in accordance
with the Company's obligations under Article 17 of the UK MAR. Upon
the publication of this announcement, this inside information is
now considered to be in the public domain.
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END
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April 07, 2022 10:17 ET (14:17 GMT)
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