17th Jan 2019 14:56
LONDON (Alliance News) - Caspian Sunrise PLC on Thursday said it is making progress in returning deep well A5 at its BNG contract area in Kazakhstan to an operational level.
Deep well A5 was drilled in 2013 to 4,432 metres but was blocked with drilling fluid and debris. Following this, a side-track was drilled and a 5-inch liners was run to the bottom of the well.
In late 2017, the well flowed for 15 days but was then restricted by a partial blockage which substantially reduced its flow rate.
Due to unwanted metal lost in the well, and difficulty removing that metal, Caspian sunrise is now using specialist tools to grind the metal down so that it does not interfere with well operations.
"Caspian Sunrise is pleased to report that milling operations continue to make progress at a current depth of 4,152 meters and expects to be in a position to test the well in the not too distant future," Caspian said.
Caspian also provided updates on its other well projects within the BNG contract area.
At deep well 801 the company is currently waiting for the natural pressure in the well to build, which will be used to stimulate the well before testing.
At deep well A6, Caspian has tried twice before, unsuccessfully, perforate the oil-bearing interval with neither attempt successful. It has appointed new advisors to help get the well to flow.
Deep well A8 was spudded in November 2018 and has a target depth of 5,300 metres. The company expects to reach 4,100 metres in April and commence an initial well test in the third quarter of 2019.
Finally, at the shallow wells within the MJF structure of the contract area, total December oil production was 49,255 barrels - an average of 1,589 barrels of oil per day - and the domestic price sole rise to between USD21 and USD22 per barrel.
Regulations in Kazakhstan have recently altered, with the period in which licence holders can appraise an individual structure dropping to five years from six years.
More positively, in exchange for this, there is no longer a requirement to make social contributions during the appraisal period. This is expected to produce "material savings" over the lifetime of the licence.
The BNG licence in its entirety has been converted to a five-year appraisal period and Caspian has filed to move the MJF structure to a full production basis.
"We continue to expect an early approval after which we would be able to sell the majority of the oil produced from the MJF structure by reference to world rather than domestic prices," Caspian said.
Once a full production licence is granted, Caspian will commence a drill campaign for up to 10 new shallow wells. This would improve production from the MJF structure to 4,000 barrels of oil per day from its current approximately 2,000 barrel per day production.
Shares in Caspian remained flat at 6.90 pence per share on Thursday.
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