The Board of Caspian Sunrise is pleased to provide the following operational update.
3A Best
The Board is pleased to announce that Eragon Petroleum FZE, its 100% subsidiary, has entered into a farm out agreement with a local partner under which that partner has agreed to complete the outstanding work programme commitments in return for a 15% interest in the 3A Best Contract Area.
The work in question is principally the drilling of a 2,250 meter well at an expected approximate cost of $2.5 million.
The local partner has also been granted an option, exercisable after the completion of the current work programme commitments, to acquire the remaining 85% of the 3A Best Contract Area at a price to be determined by an independent expert to be appointed by the parties should the option be exercised by the local partner.
Caspian Explorer
The Board is also pleased to announce the first charter for the Caspian Explorer, the shallow water drilling vessel acquired in 2020 and specialising in operations in the shallow northern Caspian Sea.
Importantly, the charter is with North Caspian Operating Company (“NCOC”) the principal operator in the region, comprising the Republic of Kazakhstan working through KazMunaiGas (KMG), and international oil companies including Shell, ExxonMobil, Eni, Total and CNPC, the consortium operating the Kashagan field.
The charter, which will be undertaken this year, is safety related rather than new drilling. Accordingly the period of the charter is shorter than for a new drill and the fee much lower. It does however, demonstrate both the continuing activity in the region and that the leading operator has certified the Caspian Explorer suitable for use. We therefore look forward to longer and more rewarding contracts in the coming years.
Comment
Clive Carver, non-executive chairman commented:
“Both the farm out at 3A Best and the first Charter for the Caspian Explorer are very welcome.
Cash constraints, in part following the impact of Covid, have severely limited what we have been able to achieve at the 3A Best Contract area, which was acquired in 2019. In the event the drilling is successful it should be recognised in any independent valuation of our remaining 85% interest.
The contribution from the first charter for the Caspian Explorer under our ownership will cover its operating costs for the year and demonstrates its potential contribution when new wells are drilled in the oil rich northern Caspian Sea.”
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