Caspian Sunrise shares rise on latest progress at BNG area

Caspian Sunrise updated the market on progress at Deep Well A5 on the Airshagyl structure at its flagship BNG contract area on Thursday.

The AIM-traded firm had previously announced that the side-track, from a depth of 3,796 metres, successfully reached a depth of 4,405 metres without incident, which had become the well's new total depth.

Since then, cementing had been successfully completed, the well “extensively” cleaned, and subsequently perforated over a 63 metre interval from 4,331 metres to 4,394 metres.

“We are delighted to report the well has flowed without artificial stimulation for four days, without interruption and with increasing quantities of oil being produced,” the board said in its statement.

“Production has been estimated to have steadily increased to the rate of some 1,500 barrels of oil per day using a 12 mm choke, with further increases expected.”

The board said oil produced from the deep wells at BNG would, for the time being, be sold by reference to domestic prices, which had been around $26 in recent months.

It explained that, while it was still too soon to predict with certainty the level at which A5 could produce on a consistent basis, the current rate of production more than doubled the company's total production from its successful MJF wells.

Work was continuing on the three other deep wells already drilled, the board said, with the intention of bringing them into production in due course.

Caspian Sunrise said it was preparing to begin a formal 90 day flow test, following which it planned to instruct Gaffney Cline to help assess the quantity of reserves associated with the Airshagyl structure.

“This is the result we have been working to achieve for a long time,” said executive chairman Clive Carver.

“While we need to be careful not to get over excited, as it is possible the continuous flows exhibited over the past four days might be interrupted or reduced as happened before, the strength of the flows and the uninterrupted three-day period lead are extremely encouraging.

“They lead the company's management to believe Deep Well A5 will be a mainstay of the production expected over the coming years from the large quantities of deep oil believed to be present on the Airshagyl structure.”

At 1129 GMT, shares in Caspian Sunrise were up 24.36% at 9.7p.