Kazakhstan

Caspian Energy Inc., Calgary, disclosed agreements that will enable it and a new partner to expand production in East Zhagabulak oil field in Kazakhstan’s Aktobe oblast.

Nov. 8, 2010

2 min read

By OGJ editors
HOUSTON, Nov. 8 -- Caspian Energy Inc., Calgary, disclosed agreements that will enable it and a new partner to expand production in East Zhagabulak oil field in Kazakhstan’s Aktobe oblast.

The agreements will lead to immediate workovers on production wells and lead to financing that will enable further development and exploratory drilling. Aral Petroleum Capital LLP, field operator, is owned 60% by Asia Sixth Energy Resources Ltd. and 40% by Caspian Energy.

Partners plan to drill a series of development wells in East Zhagabulak, beginning with one well in the first quarter of 2011. If successful, this will be the third production well on the field, with a further three wells to be drilled sequentially. The company believes that production thereafter will reach about 7,000 b/d of oil.

Aral will also use new funds to reprocess 3D seismic lines to confirm drilling locations for the new year. Bonus payments will also be made pertinent to the recent execution of the 25-year production contract.

Asia Sixth Energy will seek $80 million in debt financing to develop East Zhagabulak,
sustain exploratory drilling in prospective North block areas such as Greater Zhagabulak, Baktygaryn, and Urikhtau areas, allow Aral to drill an offset to the promising Sakramabas block, and ensure that Caspian will not have to provide further funding for its share of activities in the North block before full utilization of the $80 million or the third anniversary of the closing of this transaction, whichever is earlier.