LONDON, UK: The Board of Caspian Sunrise, an oil and gas exploration company, is pleased to announce the conditional sale of 50% of the Caspian Explorer, a specialized drilling vessel, for a cash consideration of $22.5 million.

The purchaser, Stepping Stone Investments Limited, is a company registered in the Seychelles. The sale is subject to certain conditions, including the receipt of payment and the re-registration of the sale shares in the United Arab Emirates (UAE).

The Caspian Explorer was acquired by Caspian Sunrise in 2020 for approximately $3.7 million and has since been engaged in safety-related contracts for the North Caspian Operating Company. In March 2023, the company announced its first drilling contract, scheduled for the summer of 2024, with a planned depth of 2,500 meters for the Isatay Operating Company LLP, in which Italy’s ENI is a leading participant.

The sale of the 50% stake in Prosperity Petroleum FZE, the UAE registered holding company of Kazakh registered KC Caspian Explorer LLP, is expected to result in a gross accounting profit of approximately $20 million. The carrying value of 100% of the Caspian Explorer in the Group’s 2021 financial statements was $3.6 million.

In terms of operational updates, Caspian Sunrise has been focusing on its flagship BNG Contract Area, particularly on Well 142 in recent months. Work at Deep Well 802 on the Yelemes Deep structure was temporarily suspended due to the need for additional equipment, which, due to sanctions on Russia, had to be sourced through China with longer lead times. As a result, the crew at Deep Well 802 was redeployed to work on Shallow Well 142, a historically high-performing well, where the company is drilling a horizontal side track.

While Well 142 is yet to be brought back into production, the company is now ready to resume work at Deep Well 802 with the crew returning to the site. The directors estimate that it may take up to an additional two months to complete the work at Deep Well 802.

Production volumes at the BNG Contract Area have recently averaged around 2,000 barrels of oil per day (bopd). Caspian Sunrise has been selling its oil to mini refineries due to the high levels of discount for oil transported through the Russian pipeline network. However, the recent decline in international oil prices has made the net price achieved from sales to mini refineries comparable to the net price expected from international sales without the Urals oil discount.

The company has initiated preparatory work at Deep Well 803, located on the Yelemes Deep structure, with plans to begin drilling in the third quarter of this year and complete it before the end of the year, in line with the current work program commitments.