REG - Caspian Sunrise plc - Corporate & Operational update

Caspian SunriseAnnouncement

03/03/2025 07:15

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RNS Number : 0557Z  Caspian Sunrise plc  03 March 2025

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.

 

 

Caspian Sunrise PLC

("Caspian Sunrise" or the "Company" and together with its subsidiaries, the
"Group")

 

Corporate  & Operational update

 

The Board of Caspian Sunrise is pleased to update shareholders with progress
regarding the sale of the shallow MJF and South Yelemes structures on the BNG
Contract Area, the status of the other corporate transactions underway, and a
general update on licences & operations.

 

Corporate Transactions

 

Sale of the MJF & South Yelemes structures

In September 2024 Caspian Sunrise shareholders overwhelmingly approved the
sale of the BNG Contract Area's shallow structures for a headline cash
consideration of $88 million, of which the first $14 million has been
received.

 

Work to split the shallow structures from the rest of the assets owned by BNG
Ltd LLP has reached an advanced stage with the required paperwork now
submitted to the Kazakh regulatory authorities.

 

In recognition of the progress made the the long stop date under the Agreement
has been extended to 31 March 2025.

 

BNG Deep Structures

On 26 February 2025 we announced that the Group had entered into a conditional
and non-binding agreement with a prominent middle east financial institution
to invest $72.5 million following the completion of the sale of the BNG
shallow structures for a 50% stake in BNG Ltd LLP, to further develop the BNG
deep structures.

 

Acquisition of the Block 8 Contract Area

The Block 8 acquisition, which was first announced on 26 September 2022,
remains dependent on the receipt of a new licence for the third structure at
the Block 8 Contract Area.  Appeals to the Kazakh courts to accelerate the
process have to date not resulted in the required licence renewal.

 

Acquisition of the West Shalva Contract Area

On 21 February 2025 we announced the receipt of the final substantive
regulatory consent for the acquisition of the West Shalva Contract Area. We
are now proceeding with the re-registration of CS Energy LLP, which is
expected to take up to a further two months to finalise and following which we
could formally complete the acquisition.

 

We plan to drill a well to a depth of 2,660 meters in H1 2025, which if
successful should commence production in H2 2025.

 

Potential oilfield acquisition

The Group has signed an exclusivity agreement with the vendors of an
established oilfield believed to have significant proven reserves and
extensive seismic data coverage.

 

The oilfield was first identified in the Soviet era and is located near to and
is believed to be similar to the Group's former asset at Galaz, on which the
Group discovered oil in 2010 and which was successfully sold in 2015 for
approximately $100 million.

 

Licencing & Operational update

 

Licence upgrades

Applications to upgrade the previous joint appraisal licence for the Airshagyl
and Yelemes Deep structures to two separate 25 year full production licences
were submitted in Q3 2024 and we continue to work with the Kazakh authorities
to secure the award of both licences.

 

Operational activity

Under Kazakh regulations new development work is not permitted on structures
under licence upgrade applications or awaiting change of control consents
where the underlying licences have expired and are the subject of renewal
applications. Accordingly, no development work at the BNG deep structures or
at the Block 8 or West Shalva Contract Areas has been permitted.

 

Additionally, as we expect soon to complete on the disposal of the shallow
structures at the BNG Contract Area, we also ceased new drilling operations
there following the completion of Well 815.

 

Two of the Group's four principal rigs are now in storage. A third rig has
been identified to work on Deep Well A5 upon receipt of the full production
licence at the Airshagyl structure on the BNG Contract Area and the forth rig
is being prepared to drill the 2,660 meter well planned on the West Shalva
contract area referred to above.

 

2024 Production volumes

Production in 2024 was 623,312 barrels (2023: 665,114 barrels) at the rate of
1,707 bopd (2023: 1,822 bopd).

 

Under the terms of the agreement to sell the MJF and South Yelemes shallow
structures BNG's shallow structure production is now capped at 1,700 bopd,
with current production now approximately 1,485 bopd.

 

Caspian Explorer

The Caspian Explorer's first commercial charter under the Group's ownership
was successfully completed during the summer months for a consortium led by
Italy's ENI. However, with ENI subsequently exiting its Kazakh operations we
do not now expect to drill the additional option well under the original
contract.

 

While there have been early stage discussions for additional 2025 Caspian
Explorer charters, nothing has yet been confirmed.

 

Oil trading

On completion of the disposal of the BNG shallow structures our oil trading
activities will then be dependent on production from the BNG deep structures,
Block 8 and West Shalva.

 

Comment

 

Clive Carver, Chairman said

 

"Oil & gas is a highly regulated industry both in terms of day to day
operations and corporate transactions, which helps to underpin the value of
licences once acquired and renewed.

 

In recent months new drilling has largely been on hold pending the receipt of
the required regulatory consents on our various corporate transactions. We are
now however closing in on completing the $88 million sale of the BNG Contract
Area's shallow structures and have a route to substantial third party funding
for the further development of the BNG deep structures.

 

We have been cleared to drill at West Shalva and continue to work with the
regulatory authorities to reach the same position at Block 8.

 

The Caspian Explorer remains a valuable asset and one of the few options to
those seeking to explore the hugely prospective shallow northern Caspian Sea."

 

  Contacts:

 

    Zeus            +44 (0) 203 829 5000

    James Joyce

   James Bavister

   Andrew de Andrade

 

 Qualified person

Mr. Assylbek Umbetov, a member of the 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 person responsible for arranging the release of this announcement on
behalf of the Company is Clive Carver, Chairman of the Company.

 

This announcement has been posted to:

www.caspiansunrise.com/investors (http://www.caspiansunrise.com/investors)

 

 

 

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