Caspian Sunrise is a Kazakhstan based oil and gas exploration and production company established in October 2006 and listed on the Alternative Investment Market of the London Stock Exchange in May 2007
Caspian Sunrise’s current principal interest is in the BNG Conract Area in the Pre Caspian basin in Western Kazakhstan. Additionally, Caspian has interest in the Munaily and Beibars Contract Areas.
This section of the website contains information on Caspian’s financial and operational performance, providing up-to-date information of value to an analyst, shareholder or potential investor.
Oil and gas exploration and production is a long-term activity requiring effective environmental stewardship. We have operated in Kazakhstan now for more than 15 years and have only been able to do so by complying with applicable environmental standards.
Question & answers for the Shareholder General Meeting on 31 July 2023
The issue at Deep Well 802 was the issue encountered at most of the deep wells drilled to date at the BNG Contract Area, in that the high temperature and pressure prevented the well being completed as planned. Additionally, a pipe became stuck at the bottom of the well.
The initial well encountered significant oil shows at depths higher than expected, necessitating the drilling of a side track starting above the salt layer and running to the depth at which the oil shows were encountered. The drilling fluids (mud) used to control the well during drilling have set in the well and need to be cleared.
The plan is now to use coil tubing equipment to clean the tubing. Once the tubing is cleared we then plan to pull out the stuck pipe before completing the well ready for well testing.
Coil tubing equipment is on-site and operational. The planned coil tubing work programme is underway and is planned to be complete by the end of September.
Yes.
The decision to first drill Deep Well 803 is led by the requirements of this year’s work programme.
Set out below is the planned work at the BNG Contract Area for the remainder of the year:
Deep Well 802The coil tubing work programme at Deep Well 802 is underway and is planned to be complete by end September 2023.
Shallow Well 142The well workover is planned to start at the end of August 2023.
Shallow Well 155This new shallow well is planned to spud in mid-September 2023.
Deep Well A5We expect a rig to become available in September with which we plan to drill a new 400-meter side-track from a depth of approximately 4,500 meters.
Deep Well A6A workover to perforate a 6-meter interval at a depth of 4,300 meters is planned to commence in mid-August. This may however be delayed to allow the shallow horizontal well planned to be drilled on the South Yelemes structure to be drilled first using the rig and crew currently intended for Deep Well A6.
Deep Well 803Deep Well 803 is planned to spud in mid-October 2023.
Deep Well A5A 300 meter side-track is planned to commence in October 2023.
Shallow Well 141The new side-track is planned to commence in November 2023.
Deep Well A7Timing of the work to continue drilling at Deep Well A7 depends on the results from Deep Well A5.
The above is based on rig and crew availability and operational considerations and is accordingly subject to change and re-ordering without notice.
Other work planned for 2024 includes:
Shallow Well 153Workover
Well 141 flowed successfully from 2016 to 2019 without any pause for a material workover.
As the result of an increasing water cut a rod pump was installed in 2020 with production continuing.
Following the success with horizontal drilling at wells 153 and 154, a horizontal side-track was drilled with the intention of boosting production to around 350 bopd.
During the horizontal side-track drilling we experienced a stuck pipe. The majority of which has now been retrieved but the final 27 meters remain in the side-track.
Our plan is now to drill a further side-track from a slightly higher level with the work planned towards the end of the year.
Well 142
Similarly, at Well 142 after a lengthy period of conventional production in 2022 a horizontal side-track was drilled. This initially resulted in production from the well increasing to approximately 950 bopd.
However, we encountered an issue with increasing water levels, which lead to an exercise to remove the well’s liner. The first 250 meters were successfully removed but the remaining 150 meters were lost in the well.
The plan is now to drill a new horizontal side track with work due to commence in Q3 2023.
Well 145
Well 145 is not currently producing. The issue is increasing water levels. Work is underway with external consultants to decide how best to isolate the water and return the well to production.
Yes there is a problem. The deadline for payment has passed and despite repeated assurances no payment has been received.
We have therefore begun discussions with alternative purchasers, who are more likely to be interested in 100% of the Caspian Explorer and would therefore be expected to offer more than the $22.5 million previously agreed for 50% of the Caspian Explorer.
For the year ended 31 December 2022 we produced 792,284 barrels of oil (48% more than in the previous year). In the period up to around the end of April 2022, when it was still economic to sell on the international markets, 237,144 barrels were sold on the international market.
Since we stopped selling on the international market the approximate split between sales to the domestic market and to domestic mini refineries has been 53% domestic and 47% domestic mini refineries.
Yes. We have started sales trading and estimate the benefit to be approximately an additional $2-3 per barrel.
We are achieving net prices of approximately $25 per barrel for domestic sales and approximately $38 per barrel for sales to domestic mini refineries.
To make international sales worthwhile, bearing in mind the additional storage, transportation and tax involved and the additional 1-2 months to get paid, the net price for international sales would need to be better.
Our estimate of a breakeven point for international sales (i.e. before any “Urals” discount) is in the region of $95-100 per barrel.
In the event we do return to selling our oil on the international market tax would be levied based on the Brent price rather than the price achieved.
Although we can see no logic in this we are not aware of any intention by the authorities to change. However, should there be a change to base tax on the amount actually received, the level at which sales to international buyers would be economic should be significantly lower than the $95-$100 indicated above.
We are waiting on proposals from expert international drilling consultants before deciding exactly how to drill the well. The start date for drilling depends on rig and crew availability and is currently not expected to commence this year. However, there is the possibility of drilling this well ahead of the planned workover of Deep Well A6.
We believe we have a competitive advantage in identifying and evaluating natural resource projects in Kazakhstan, which is not limited solely to oil & gas projects.
More than a decade ago, we considered a wind farm project and in the 2021 financial statements we noted that we may again look at such projects, provided we believe them to be commercial. However, we have not yet made any significant progress on this and do not have any specific wind farm projects under consideration.
Similarly, we are aware of potentially attractive and earnings-enhancing mineral projects, which we may look to develop. There are projects under consideration although no final decision has been taken on whether to progress any.
Any such development would be undertaken in the first instance by the Company. In the event any such project developed into a self-supporting stand-alone business we would consider spinning the entity off into a separate corporate vehicle.
Paying dividends continues to be a priority provided the company has the funds to do so without detracting from progressing the development of BNG, and also Block 8 in the event as expected that is acquired.
Exactly when dividends resume and the level of dividends and whether there might be a special dividend will depend on the financial position at the time and the then near-term financial outlook.
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