LONDON (ShareCast) - (ShareCast News) - Kazakhstan-focussed oil and gas company Caspian Sunrise updated the market with news of Shallow Well 808 and Deep Well A6 from its BNG Contract Area and of the Baverstock merger on Monday.
The AIM-traded firm holds a 58.41% interest in the BNG Contract Area, which is located in the west of Kazakhstan 40 kilometers southeast of Tengiz on the edge of the Mangistau Oblast, covering an area of 1,702 square kilometres.

It said the block has both shallow and deep structures of interest, and following completion of the Baverstock merger, the company's interest in BNG would be 99%.

As it had previously announced, Caspian Sunrise has identified from the analysis of available seismic data a potential new structure at BNG, which was currently being evaluated at an estimated cost of $2.5m by well 808, a shallow well.

Well 808 has been drilled a total depth of 3,200 meters targeting Cretaceous, Jurassic and possibly Triassic horizons, the board reported.

Six horizons were identified for further analysis, with the lower ones at depths between 3038-3030 and 3014-3008 meters containing shows of oil films, but tested water with gas and were not considered worth pursuing.

The remaining intervals between 2714 and 2716 meters, 2646 and 2648 meters, 2557 and 2559 meters, and 2356 and 2363 meters were planned for perforation and testing.

In the event the results of testing the remaining intervals at Well 808 indicated the presence of a significant quantity of oil, a further two wells were planned for later in 2017.

At deep well A6 - the third deep well drilled - a gross interval of in excess of 100 meters was identified from mud and wire-line logs as being potentially hydrocarbon bearing.

In January 2017, as previously announced, the lower 46 meters were poorly perforated although the limited recoveries tested with oil films, water and gas.

The top 60 meters of the 100-meter plus interval were subsequently successfully perforated using a different leading international contractor.

To date, limited recoveries from the well had been possible and the well was being prepared for a chemical wash to stimulate the flows, the board explained.

"The aggregate production from the BNG shallow wells is around 1,190 bopd, which under the terms of the current exploration and appraisal licence has to be sold at domestic prices, currently around $16 per barrel," Caspian's board said in its statement.

Looking at the Baverstock merger, on 24 March, independent shareholders approved the merger between Roxi Petroleum and Baverstock, to form Caspian Sunrise.

Under the terms of the merger 651,436,544 new Caspian Sunrise shares, representing 41.59% of the then enlarged share capital, would be issued fully paid to the Baverstock quotaholders on completion.

Additionally, on 24 March, independent shareholders also approved the capitalisation of the $10.1m Vertom International loan.

That would result, on completion, in the issue of a further 80,804,200 new Caspian Sunrise shares to Vertom, a company controlled by Caspian Sunrise CEO Kuat Oraziman.

As it had previously announced, the only outstanding material condition to closing both the merger and the capitalisation of the Vertom loan was the receipt of the formal approval from the relevant Kazakh authorities.

Based on enquiries to the agencies concerned, the company's management expected such approval should be received by the end of the second quarter.

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