Caspian Sunrise PLC
("Caspian Sunrise" or the "Company")
BNG operational update
Third Deep Well on the Airshagyl structure to contain oil
The Board of Caspian Sunrise is pleased to update shareholders with developments at its flagship BNG Contract Area.
Deep Well A8 was spudded on November 2018 with a target Total Depth of 5,300 meters.
Drilling has now reached a depth of 4,391 meters, which is beyond the salt and clay layers and well into the first of the expected oil-bearing zones.
We are pleased to report that oil bearing rock has been recovered, indicating the presence of an oil-bearing interval. A third-party specialist company has been engaged to collect core samples covering the full extent of the interval.
This find, together with the finds at Deep Wells A5 and A6, marks the third of the three deep wells drilled on the Airsghagyl structure to have shown the presence of oil. The Company believes the structure may extend across the full 58 km2 of the Airshagyl structure
The second reservoir target is of Devonian age anticipated at a depth of approximately 5,200 meters.
Based on progress to date we continue to expect to reach total depth in Quarter 3 2019.
Despite on occasion being very close to removing the remaining metal obstruction from the well we have decided to suspend further work on the current side-track and plan to drill a new side-track from a depth of 3,850 meters to a depth of 4,450 meters.
Discussions with potential contractors have commenced and we expect to complete the new side-track approximately two months after work commences.
A technical review by leading international consultants confirmed our plan to conduct a pressurised acid treatment of the well as the best way forward.
The tendering process is ongoing with work is expected to commence in May.
Advice has been received from an international consultancy with expertise in high pressure / high temperature wells and a new internal work programme agreed upon.
We intend first to re-cement the bottom of the well in order to isolate the lower portion of the well preventing water encroachment from below. After cementing, the deeper most prospective portion of the reservoir; 4479m- 4489m, will be reperforated. Depending upon results we may also reperforate the upper prospective reservoir interval.
In the last few days the well was opened to relieve pressure and oil from behind the casing came to the surface under its own pressure. The well has now been closed in anticipation of the planned works.
We expect to complete of the reperforating work in May.
In April 2017, we drilled Well 808 to a depth of 3,070 meters to assess whether a new structure similar to the MJF structure existed. The results of limited testing were inconclusive indicating oil bearing intervals with high water saturation.
Recent re-evaluation of the wireline and mudlog data suggests additional untested potential within two intervals shallower in the well.
Since our last update we have re-completed the bottom of the well to isolate the water and are set to reperforate the well at intervals between 2,033.5 meters to 2,035.5 meters and between 2,250 meters and 2,253 meters.
Production from our shallow wells for April 2019, was in aggregate 44,115 or 1,471 bopd (March 2019 45,600 barrels or 1,471 bopd), with oil sold at an average price of $19.00 per barrel (March $18.00 per barrel).
Compared to March 2019, average daily production was flat while total monthly oil production decreased by 1,485 barrels as the result of one less day in April compared to March.
Clive Carver, Executive Chairman said
"We are naturally delighted that all three of the deep wells drilled on the Airshagyl structure have demonstrated the existence of oil-bearing intervals at a common depth, which we believe may extend over the full 58 km2 size of the Airshagyl structure.
Three producing deep wells on the Airshagyl structure would make a compelling commercial case to seek to move this structure onto an international based licence with the majority of oil produced from the Airshagyl structure then being sold by reference to worlds rather than domestic prices.
We look forward to updating the market with the results of the core samples and to provide an indication of the size of the interval discovered.
The decision taken at A5 to drill a new side-track extends the date by when we hope to get the well onto test production by a few months and at some additional cost but we believe increases the overall likelihood of success as we start with a clean slate with the planned side-track"
Caspian Sunrise PLC
+7 727 375 0202
WH Ireland, Nominated Adviser & Broker
+44 (0) 207 220 1666
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+44 (0) 203 735 8825
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.
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