REG - Caspian Sunrise plc - 50% Sale of Caspian Explorer & Operational Update

Caspian SunriseAnnouncement

12/06/2023 07:00

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RNS Number : 3123C  Caspian Sunrise plc  12 June 2023

 

 

Caspian Sunrise PLC

 

("Caspian Sunrise", or the "Company")

 

Sale of 50% of Caspian Explorer & Operational Update

 

Introduction

The Board of Caspian Sunrise is pleased to update the market with news of the
conditional sale of 50% of the Caspian Explorer for $22.5 million together
with a general operational update.

 

Background

The Caspian Explorer is a drilling vessel designed specifically for use in the
shallow northern Caspian Sea where traditional deep water rigs cannot be used.

 

Caspian Sunrise acquired it for approximately $3.7 million in 2020, since then
it has undertaken a safety related contract for the North Caspian Operating
Company .

 

In March 2023, the Company announced its first drilling contract, which is
scheduled to be drilled in the summer of 2024 with a well to be drilled to a
planned depth of 2,500 meters for the Isatay Operating Company LLP ,a Kazakh
registered explorer, in which Italy's ENI is a leading participant.

 

Disposal of 50%

The Company has conditionally agreed to sell 50% of the shares in the UAE
registered Prosperity Petroleum FZE, the holding company of the Kazakh
registered KC Caspian Explorer LLP, which in turn owns the Caspian Explorer
drilling vessel, for a cash consideration of $22.5 million. The purchaser is
Stepping Stone Investments Limited, a company registered in the Seychelles.

 

The sale is conditional inter alia upon payment being received by the Company
and the re registration of the sale shares in the UAE.

 

The carrying value in the Group's 2021 financial statements of 100% of the
Caspian Explorer was $3.6 million. The disposal would therefore be expected to
result in a gross accounting profit of approximately $20 million.

 

In the year ended 31 December 2022 the Caspian Explorer had no revenue and
costs of approximately $850,000.

 

The proceeds from the sale would be used in the further development of the
Group's assets.

 

Operational update

In recent months the focus of the Company's work at its flagship BNG Contract
Area has been at the shallow wells and in particular Well 142.

 

Work at Deep Well 802 on the Yelemes Deep structure was suspended awaiting
additional equipment, which due to the sanctions on Russia, now needs to be
sourced via China with much longer lead times.  Accordingly, the crew at Deep
Well 802 was moved to work on Shallow Well 142, historically one of BNG's best
performing shallow wells, at which the Company is drilling a horizontal side
track.

 

The Company is yet to bring Well 142 back into production but is now ready to
resume work at Deep Well 802 to which the crew has returned. The Directors
estimate it will be up to a further two months before the Company is able to
complete our work at Deep Well 802.

 

Recent production volumes at BNG have been approximately 2,000 bopd.

 

As previously reported, the high levels of discount for oil transported
through the Russian pipeline network, even though Kazakh produced oil is not
subject to sanctions, together with tax still being assessed based on
international rather than actual prices, means the Company is not using the
international markets to sell its oil.

 

However, the recent fall in the international oil price means that the net
price achieved from sales to mini refineries is now broadly equivalent to the
net price the Company would expect from international sales without the Urals
oil discount.

 

Preparatory work has begun at Deep Well 803 which is to be drilled on the
Yelemes Deep structure. The Company plans to spud the well in Q3 and complete
it before the end of the year in accordance with this year's work programme
commitments.

 

Annual General Meeting

This year's AGM will be held on 30 June 2023.

 

2022 audited financial statements

Work continues in the preparation of the 2022 financial statements, which are
not now expected to be published until towards the end of June 2023.

 

Clive Carver, Chairman said

"We are naturally pleased that our faith in the Caspian Explorer will result
in a significant influx of funding to further develop the Group's assets
without any dilution to shareholders."

 

Caspian Sunrise PLC

 

Clive Carver,
Chairman
+7 727 375 0202

 

WH Ireland, Nominated Adviser & Broker

 

James
Joyce
+44 (0) 207 220 1666

James Bavister

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 (http://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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