Caspian Energy Inc.

August 11, 2009 16:30 ET

Caspian Energy Inc. Announces Second Quarter 2009 Financial Results

TORONTO, ONTARIO--(Marketwire - Aug. 11, 2009) -


Caspian Energy Inc. (the "Company" or "CEK")(TSX:CEK) announced today its financial results for the three and six months ending June 30, 2009. Its interim unaudited financial statements for the period and related management's discussion and analysis have been filed with Canadian securities regulatory authorities and are available for viewing at

For the three months ending June 30, 2009, CEK's net income and comprehensive income was $1,346,971 and for the three months ending June 30, 2008, CEK's net loss and comprehensive loss was $1,219,004. $166,470 (prior period - $907,123) relating to stock-based compensation charges and $4,524,233 (prior period a loss of $335,280) pertaining to foreign exchange gains/losses were components of these results. Caspian recorded charges of $602,985 (2Q 2008 - $491,648) pertaining to interest and $97,706 (2Q 2008 - $75,015) pertaining to accretion of the discount on its convertible debentures. Depletion, depreciation and accretion expenses were $1,370,424 and $364,983, respectively.

CEK's operations used $1,254,441 in cash during the three month period and provided $662,735 for the comparative quarter of 2008. At the close of 2Q 2009, Caspian had working capital of $668,470.

Oil revenues before transportation costs during 2Q 2009 were $1,037,551 and for 2Q 2008 were $3,363,412. The Company sold an average 210 Bopd (2Q 2008 – 329 Bopd) at a price of $54.30 (2Q 2008 - $112.27), per barrel, net of ROK takes, during the quarter ended June 30, 2009.

For the quarter ended June 30, 2009 operating costs were $793,785 and for the 2008 comparative quarter, operating costs were $739,329 while transportation expenses were $480,816 and $728,223, respectively. Administrative expenses for the same periods were $707,864 and $975,358, respectively.

The Company's existing sources of financing and expected cash flow from operating activities are not sufficient to meet: (i) the repayment of the Loan payable of $3,442,625, which has no specified repayment terms; and (ii) the Convertible Debentures plus accrued interest, totalling $23,748,524 on June 30, 2009, which mature on March 2, 2011.

Aral Petroleum Capital LLP, of which Caspian is a 50% stakeholder, has a contractual commitment to expend USD 38.9 million during calendar 2009 to discharge its exploration obligations pursuant to its exploration license with the ROK. To fund its proportionate obligation, the Company is pursuing a farmout or sale of the North Block, which will result in an up-front cash payment plus an undertaking of the exploration and development obligations to earn a portion of the Company's interest. Several parties have indicated interest and discussions are taking place, but the outcome of these discussions cannot be determined with certainty. The Company is concurrently seeking loan funds, via Aral, in Europe, to satisfy the exploration commitment. Updates to this circumstance will be press released as they are solidified.

The Company's ability to continue as a going concern is in substantial doubt and is dependent upon a successful outcome to the negotiations taking place with the debentures holders and a positive conclusion to either its farmout or loan-seeking activities.

CEK today filed on SEDAR interim unaudited financial statements and MD&A with respect to its June 30, 2009 second fiscal quarter.

The Company is an oil exploration and development corporation operating in the Republic of Kazakhstan.


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.

Contact Information

  • Caspian Energy Inc.
    William Ramsay
    President and Chief Executive Officer
    020 7861 3232