Introduction

Caspian Sunrise the Central Asian oil and gas company, with a focus on Kazakhstan, is pleased to update the market with news at the BNG Contract Area of progress at its Deep Wells A5, 801, A6 & A8 and at the Shallow Well 146 on the MJF structure.

Deep Wells

Deep Well A5

For 15 days before the formal start of the 90-day flow test the well flowed at the rate of approximately 3,800 bopd using a 10 mm choke.  Following a decline in pressure, believed  to be caused by drilling fluid in the well, the 10mm choke was replaced with a 4mm choke the production rate fell to approximately 1,000 bopd.

This reduced flow rate is materially less than would otherwise be the case without the drilling fluid in the well. If we continued with the formal 90-day flow test without clearing the well and the choke it would unnecessarily restrict the reserves attributable to the well and the income from sales of oil.

Accordingly, Caspian Sunrise announces a pause to the independent 90-day flow test at Deep Well A5 to allow further drilling fluid to be cleared from the well and from the choke, with a view to materially improving the final result.

We plan to clear the well, possibly with the use of coil tubing equipment, which is on the way to the site. The delay is not expected to be significant and we expect to resume the formal 90-day flow test before the end of the year.

Deep Well 801

As previously announced  Deep Well 801 has 90 meters of stuck pipe at a depth of some 4,752 - 4,842 meters.

Work to allow a 200 meter side-track to be drilled from a depth of approximately 4,700 meters is now almost complete and the side-track drilling is expected to commence in the next 10 days, with an expected drilling phase of 30 days.

This is the same operation that allowed Deep Well A5 to flow but at 801 the operation is expected to be easier and quicker as the distances to drill are shorter.

Deep Well A6

Once the drilling pipes to be used at Deep Well 801 become free we plan to recomplete the bottom of Deep Well A6, making the floor of the well watertight and then re-perforate up to 100 meters of potential oil using more powerful explosive charges than before. This work is now expected to commence in January 2018.

Deep Well A8

The equipment required to spud Deep Well A8 is on site and spudding of this, the fourth deep well at BNG, remains on course for before the end of the year.

Shallow Wells

Well 146

Caspian Sunrise also announces that Well 146, our sixth well on the shallow MJF structure, which was spudded in September 2017, has tested at the rate of 70 bopd using a 3 mm choke.

This makes well 146 the sixth commercial well drilled on the MJF structure, which in aggregate now has a production capacity of approximately 4,000 bopd.

However, our expectations based on the core samples taken from this well and the performance of other wells on the MJF structure - in particular well 142, is for a significantly higher rate of production from this well.  We believe the issue to be connected to the perforation of this well and accordingly plan to re-perforate and re test the well before the end of the year.

Clive Carver, Executive Chairman, Caspian Sunrise comments:

"The initial results from Well A5 are very encouraging.

The incidence of drilling fluid in the well is not entirely unexpected given the well's history.

By briefly pausing the formal 90-day flow test now to clean out the well we avoid reporting unnecessarily low reserve numbers and preserve our ability to sell the higher quantities of oil expected when the well and the choke are clear of the hard-set drilling fluids

The early results of the test demonstrate the steady production volumes and the maintenance of a strong pressure in the well."