Caspian Holdings Begins New Drilling Campaign in Kazakhstan

Caspian Holdings has commenced drilling its first well, Well 101, of its 2006 drilling campaign.

The first well, well number 101 will be drilled in the productive northern part of the license and will be followed by wells 102 and 103. Well 101 is located near Caspian's successful 111, 112 and 107 wells which have been the most productive Zhengeldy wells to date. The three wells are planned to be drilled and completed over the next three months.

Well location and oil bearing targets have been chosen following extensive reviews and revisions of the geological model over the last four months. Well 101 will be drilled to a target depth of 450m and is expected to intersect with two oil bearing levels.

The capital cost of the three well program is estimated to be US $650,000 and is expected to lift oil production rates and profitability and will be funded from the Company's recent share placement.

Commenting on the commencement of the 2006 drilling campaign, Chairman Michael Masterman said "It's good to be back in the field with the drilling rig. We have a clear program based on the results of the workover program and extensive geological work. We have well defined oil bearing levels which we can drill for around US $200,000 per well, making it highly economic at today's oil price. Our objective is to significantly boost revenues by combining the export of oil, which we have recently started, with an increase in oil production."

On other matters, the Company continues to wait for Kazak Government approval on its Zhengeldy license extension.