Caspian Energy Inc.
TSX : CEK
AIM : CEK

January 22, 2008 09:00 ET

Caspian Energy Inc.: First Well Spud in Post-Salt Drilling Program

TORONTO, ONTARIO--(Marketwire - Jan. 22, 2008) -

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Caspian Energy Inc. ("Caspian" or the "Company") (TSX:CEK)(AIM:CEK), an oil and gas exploration company operating in Kazakhstan, today announces that Aral Petroleum Capital LLP ("Aral"), in which the Company holds a 50% indirect interest, will spud the first exploration well, Baktygaryn #703, in its post-salt drilling program in mid-February.

Post salt production is established in this part of the basin. Existing post salt production occurs within the North Block, but the fields are owned by other companies. The relatively shallow post salt targets offer a completely new series of opportunities for the Company. Only by acquiring and interpreting the new 3D and 2D seismic over this area have these targets been identified.

Baktygaryn #703 and #701

The vertical well, Baktygaryn #703 is designed to test sandstone reservoirs in both the Triassic and Upper Permian in traps created by one of the several Permian Kungurian salt ridges running through the North Block. The well is expected to reach total depth of 2,500 metres in approximately 28 days.

Following release of the rig from well #703 it will move to a location on the eastern side of the salt ridge. This location, Baktygaryn #701, will be drilled to an estimated depth of 800 metres to test an area of seismic anomalies that terminate against a series of faults related to salt withdrawal. Well #701 is expected to reach total depth in approximately 15 days.

Both the #701 and #703 locations were identified from the interpretation of the Company's 3D seismic data acquired in the Baktygaryn area. Dask Drilling, a Kazakhstan company, has been contracted to perform the drilling operations.

Other Prospects

From the 2D seismic data, several prospects have been confirmed or newly identified and from this work additional drilling locations are being chosen. Following the release of the rig from well #701, the Company is making plans for drilling efforts to move to the Itisay, West Kozdesay, and Aransay areas in the western part of the North Block to drill for Triassic and Upper Permian targets ranging from 800 to 1400 meters. Large salt ridges running through these areas have created multiple opportunities for traps against the salt and represent a completely new series of prospects for the Company.

Charles Summers, President and COO of Caspian Energy, Inc. commented:

"This program offers a variety of targets, the successful drilling of which will add meaningful reserves. Once begun, the program provides for a series of quick to drill wells, which are relatively inexpensive, Therefore, the Company expects to make a series of important announcements over the coming several months."

Background Information

The nearest known post-salt production is from the Kenkiyak field which is located within the boundaries of the North Block but is not part of the North Block contract. The 1995 State Balance report indicated there was approximately eight production horizons in the shallow Cretaceous, Jurassic and Triassic formations, and five production horizons in the Upper Permian. Independent research consultant, Wood Mackenzie has reported recoverable reserves in the post-salt section of Kenkiyak field at 126 million barrels of oil and 89 billion cubic feet of gas with a current field daily production rate of 15,000 barrels.

Also located within the boundaries of the North Block but not part of the North Block contract are the Kokzhide and Kumsay oil fields. The 1995 State Balance report assigned oil reserves to the Jurassic and Triassic formations of the Kokzhide field and indicated there was one Jurassic producing horizon in the Kumsay field. Reported oil reserves are 13.8 million barrels for the Kokzhide field and 39 million barrels for the Kumsay field.

The Saigak field, operated by Maersk Oil Kazakhstan, currently produces from Triassic and Upper Permian at rates of approximately 4,200 barrels per day. Wood Mackenzie assigned initial reserves of approximately 20 million barrels. This field is located approximately 35 kilometres to the north-west of the North Block's western boundary.

CAUTIONARY NOTE

Some of the statements and information contained in this news release may include certain estimates, assumptions and other forward-looking information. The actual performance, developments and/or results of the Company may differ materially from any or all of the forward-looking statements, which include current expectations, estimates and projections, in all or in part attributable to general economic conditions, and other risks, uncertainties and circumstances partly or totally outside the control of the Company, including oil prices, imprecision of reserve estimates, drilling risks, future production of gas and oil, rates of inflation, changes in future costs and expenses related to the activities involving the exploration, development, production and transportation of oil, hedging, financing availability and other risks related to financial activities, and environmental and geopolitical risks. Further information which may cause results to differ materially from those projected in the forward-looking statements is contained in the Company's filings with Canadian securities regulatory authorities. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws.

The information in this release has been reviewed by Kenneth Hopkins, AAPG, who is a qualified person for the purposes of the AIM Guidance Note for Mining, Oil and Gas Companies. Mr. Hopkins is Director of Exploration for Aral and a consultant for Caspian Energy Inc., is a qualified geologist and has over 25 years experience in oil and gas exploration and production.

Contact Information

  • Bell Pottinger Corporate & Financial
    Ann-marie Wilkinson/Sarah Williams
    00 44 (0) 20 7861 3232
    or
    Jefferies International Ltd
    Toby Hayward/Oliver Griffiths
    00 44 (0) 20 7029 8000