Caspian Oil and Gas July Quarterly Update

Caspian Oil and GAs has issued its July 2011 Quarterly reports covering its operations in the Kyrgyz Republic and the West Mailisu wells.

Kyrgyz Republic

 West Mailisu #2 well on Caspian’s 100%-owned West Mailisu licence spudded on 13 June
 Well is adjacent to the Mailisu IV oil and gas field, which has produced 42mmbbls oil to date
 Good shows in Bed II over the interval 1691-1697m
 Intermediate casing point set at 1713m with first primary target sandstone Bed III (1740m) expected to be penetrated in late July
 Charvak Block seismic reprocessed – a total of 241km has been undertaken to date Romania
 Awaiting ministerial signature on Parta Licence Agreement – expected in 4th quarter 2011

September quarter plans

 A follow-up well to West Mailisu #2 will be considered if the results justify it
 Planning for the acquisition of up to 120km of 2D seismic in Kyrgyz licences
 Ongoing search for additional central Asian opportunities

Kyrgyz Republic Projects


Caspian Oil and Gas, through its subsidiaries, holds a number of licences in the Fergana Basin, giving it a significant exploration position in the Kyrgyz Republic in Central Asia.

West Mailisu #2

In June, the Company spudded the West Mailisu #2 well on its 100%-owned West Mailisu licence, which is adjacent to the Mailisu IV oil and gas field. Mailisu IV has produced 42mmbbls of oil to date. The well-site is located at the interpreted structural crest of a four-way dip-closure (see Figure 2).
The Company believes West Mailisu #2 has the potential for oil in Eocene-age sands and carbonates (beds III, V and VII) and gas in the Cretaceous and Jurassic-age sands. Prospective oil resources of up to 9.7mmbbls (mean 4.5mmbbls) had been calculated for the Eocene reservoirs.

Prospective gas resources of 5-10bcf are mapped in the Cretaceous or Jurassic reservoirs, although West Mailisu #2 was planned to test only the upper Cretaceous sands, due to depth limitations of the rig. The targeted feature is defined by a NW-SE trending reverse fault on the northern flank. Seismic sections across the structure indicate a robust closure (see figures 3 and 4). Caspian plans to target oil and gas potential in
the deeper Cretaceous and Jurassic age sands in a follow-up well, should West Mailisu #2 be successful.

West Mailisu #2 spudded on 13 June 2011, using Caspian’s own rig. Surface casing was set at 20m, 9 5/8-inch casing was set at 350m and intermediate 7 inch casing set at 1713m.

By late July the rig was drilling through the primary targets, Beds III, V and VII, on its way to the target depth of 2000m. Good oil shows were recorded over a six metre interval in Bed II (1691-1697m). The commerciality of this unexpected discovery has not been assessed, but the presence of oil in Bed II increases the likelihood of closures occurring in Beds III, V and VII.

Source www.caspainogl.com.au

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