Caspian Energy Inc.
TSX : CEK
AIM : CEK

March 20, 2008 09:00 ET

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

LONDON, UNITED KINGDOM--(Marketwire - March 20, 2008) -

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES, AUSTRALIA OR JAPAN.

Caspian Energy Inc. (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, has spudded the first exploration well, Baktygaryn #703, in its post-salt drilling program.

Whilst post salt production is established in this part of the basin, only by interpreting the 3D seismic acquired by the Company over the Baktygaryn area was this target identified. The 3D and 2D seismic have also allowed the Company to identify a number of other new prospects over the North Block.

Baktygaryn #703

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 Triassic is interpreted to be a combination of sand truncation on top of the salt wing and faulting created by salt movement. The Upper Permian is interpreted to be trapped below the overhang of the salt wing.

Dask Drilling, a Kazakhstan company has been contracted to perform drilling operations and, whilst the late arrival of the drilling contractor's equipment has resulted in the well being spud later than originally envisaged, Baktygaryn #703 will now be drilled to an estimated total depth of 2,500 meters. This depth is expected to be reached in approximately 28 days.

Commenting on Baktygaryn #703, William Ramsay, CEO of Caspian said:

"Baktygaryn #703 is the first of a number of opportunities we have identified in this area of the North Block. This well is particularly interesting because it is a dual target and therefore offers the opportunity for both Triassic and Upper Permian. Should we be successful in both targets, we believe we have the potential for highly significant recoverable reserves, relative to those we have already."

New Prospects

The relatively shallow post salt targets offer a completely new series of opportunities for the Company. The 3D and 2D seismic data have enabled several new prospects to be identified and the Company is now in the process of selecting additional drilling locations.

Following the release of the rig from well #703 the Company intends to move drilling efforts to the eastern side of Baktygaryn, West Kozdesay, and Aransay areas in the western part of the North Block where it will drill for Triassic and Upper Permian targets ranging from 700 to 1,400 meters. The Company is awaiting the outcome of permitting constraints and current weather conditions before it confirms the precise location of the second well.

Commenting on the programme, Charles Summers, President and COO of Caspian said:

"Analogous production already exists in this region of the Pre-Caspian basin and it has always been our intention to see whether similar opportunities exist for the Company. This is our first chance to pursue this new strategy which we believe offers a more attractive risk profile, and at a fraction of the deep carbonate drilling costs."

Current Production Update

Wells #301 and 213 have continued to produce without interruption for a considerable period now. The average daily production from these wells over the past 3 months has been 608 BOPD and 329 BOPD respectively, a total of 937 BOPD.

The Company has benefited from the rise in international oil prices and this has also been reflected in domestic prices allowing Caspian to enjoy enhanced cashflow over the past 12 months.

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 certified professional geologist and has over 25 years experience in oil and gas exploration and production.

Contact Information

  • Bell Pottinger Corporate and Financial
    Ann-marie Wilkinson/Sarah Williams
    00 44 (0)20 7861 3232