REG - Caspian Sunrise plc - West Shalva update

Caspian SunriseAnnouncement

21/02/2025 07:00

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RNS Number : 9249X  Caspian Sunrise plc  21 February 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")

 

West Shalva update

 

Introduction

Further to the RNS dated 8 April 2024, the Board of Caspian Sunrise is pleased
to provide the following update in respect of the acquisition of the West
Shalva Contract Area.

 

Background

The acquisition of CS Energy LLP, the Kazakh entity which holds the licence
for the West Shalva Contract Area (the "Acquisition"), was approved by
independent Caspian Sunrise shareholders on 25 April 2024.  Completion of the
Acquisition was then subject inter alia to the receipt of a number of key
Kazakh regulatory approvals.

 

On 5 November 2024 we announced that the change of control consent required
from the Ministry of Energy had been granted by the Kazakh authorities.

 

We are pleased today to announce that the consent required under the Kazakh
Anti-Monopoly legislation has now also been received. This was the final
substantive Kazakh approval required and allows work to commence on 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 and issue the 99,206,349 Ordinary
Shares ("Consideration Shares"), due under the first tranche of the
consideration (see below).

 

The West Shalva Contract Area

The West Shalva contract area is rectangular in shape and extends over
approximately 25 km².

It is located in the oil producing Zhetybay Steppe Area in the Mangyshlak
region of Western Kazakhstan approximately 90 km east of Actau and
approximately 20 km north from the Zhetybay field, where an oil processing
plant is located and oil enters the Actau / Atyrau main pipeline.

 

The West Shalva structure was identified in Soviet times by 2D seismic data.
Subsequently, 3D seismic data was acquired which identified West Shalva as a
faulted anticline. At that time the adjacent Shalva structure was drilled and
found oil from Jurassic sandstones.

 

The West Shalva prospect is partially located in Block XXXVII-12, but
straddles the boundary with adjacent blocks. The source rock for the West
Shalva prospect is considered to be Triassic marine shale as is understood to
be the case in the nearby Shalva and Zhalganoy fields.

 

The West Shalva prospect has potential reservoirs of Jurassic and Triassic
age. The Jurassic - IX and Jurassic - XI and Triassic reservoirs are oil
bearing in the nearby Shalva field and oil has been reported (but not tested)
from core in the Triassic reservoir in the WSH-4 well.

 

Based on interpretation of the available information the main reservoir
targets are Jurassic IX and Jurassic -XI reservoirs, with secondary targets in
the Triassic.

 

Development to date

The West Shalva Contract Area was first identified as a potential oil
producing location in the mid 1970's. In 1977 and based on 2D seismic data,
Well no. 4 (Wsh-4) was drilled to the north and outside the structural closure
of the West Shalva prospect to a depth of 3,500 meters with a prime potential
oil bearing interval detected at a depth of 1,033 meters in the lower
Triassic.

 

In 2008 a 3D seismic survey was undertaken on the contract area, which
identified the West Shalva structure. In June 2022 oil was detected spilling
to the surface.

 

Licence and current work programme

The West Shalva Contract Area exploration licence was renewed in 2023 for a
six year period. The current work programme commitment is for one well to a
depth of 2,660 meters targeting at least two intervals in the Triassic at an
estimated cost of US$3 million and for which the required 3D seismic
information is readily available.

 

Development plans at the West Shalva Contract Area

Now that the substantive Kazakh regulatory approvals have been received work
on the West Shalva Contract Area may begin.

 

In order to assess the potential of the West Shalva Contract Area, the Company
is preparing to drill an initial exploratory well in H1 2025 with a Total
Depth of 2,660 meters from which, if successful, production is expected to
start in H2 2025. This well would fulfil the existing work programme
obligations under the current licence.

 

A G40 rig previously in use at the BNG Contract Area has been identified for
the work and is being transported to the West Shalva Contract area.

 

Acquisition terms

Altynbek Bolatzhan, who is a member of the Concert Party (see below) is the
sole vendor of CS Energy LLP ("Vendor").

 

The acquisition terms approved by independent Caspian Sunrise shareholders
involves the issue of up to 198,412,698 shares partially dependent on the
success of drilling at the West Shalva Contract Area and a potential
additional cash sum of $5 million, as follows:

 

·    On Completion 99,206,349 new ordinary shares will be issued to the
Vendor at 4p per share.

·    On first oil from the West Shalva Contract Area a further 99,206,349
new ordinary shares would be issued to the Vendor at 4p per share

·     Additionally, the first $5 million revenues from oil sales from
the West Shalva Contract Area under the Group's ownership would be paid to the
Vendor.

 

Concert Party Shareholdings following completion of the Acquisition

The Company currently has 2,254,978,483 shares in issue. The existing concert
party currently hold 1,091,189,529  shares representing 48.39% of the
shares currently in issue.

 

The CS Energy LLP vendor is Altynbek Bolatzhan, who is a member of
the Concert Party, and who currently holds 26,851,612 shares representing
1.19% of the shares currently in issue.

 

On Completion his shareholding would increase to 126,057,961 shares
representing 5.35% of the shares then in issue and on first oil from the West
Shalva Contract Area his shareholding would further increase to 225,264,310
shares representing 9.18% of the shares then in issue.

 

On Completion the Concert Party's shareholding would increase to
1,190,395,878 shares representing 50.57% of the shares then in issue and on
first oil from the West Shalva Contract Area under the Group's ownership would
further increase to 1,289,602,227 shares representing 52.56% of the shares
then in issue.

 

Further announcements regarding formal completion of the Acquisition and the
issue of the consideration shares will be made in due course.

 

Other matters

While we have had little to announce in recent months as we progressed the
various corporate transactions underway, we expect in the coming weeks to be
able to update shareholders on a range of developments, including but not
limited to the previously announced proposed $88 million disposal of the MJF /
South Yelemes structures on the BNG Contract Area and the acquisition of the
Block 8 Contract Area.

 

Comment

 

Clive Carver, Chairman said

"We are pleased to have cleared the final substantive regulatory hurdle in the
acquisition of the West Shalva Contract Area.

 

Drilling the first well is set to commence soon and we look forward to
updating shareholders with the outcome in due course"

 

 

 

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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