Caspian Holdings Increases Production at Zhengeldy Field

Caspian Holdings reports a 35% increase of production rates as the Zhengeldy workover program begins to show results.

As a result of the initiation of the workover program carried out in December 2005, the results are starting to flow through and oil flow rates can be expected to increase further during Q1 of March 2006 Monthly production increased 35% from 2,400 barrels in December to 3,240 barrels in January – a month of exceptionally cold weather that shut down many nearby fields. Total production from wells 111, 112, 107, 106, and 113 is currently running a total of approximately 120 barrels a day (with wells 115 and 114 temporarily offline for further oil flow rate enhancement).

The second stage of the workover program is anticipated to be completed by the end of February during which an additional 5 meters of perforation will be shot in Well 112 to exploit the larger net pay identified in that well. New perforations will also be shot in Wells 115, 116 and 123 to which are expected to boost production rates.

Commenting on the initial results, Chairman Michael Masterman said, "The oil production base has begun to build steadily. By March we have the potential to show monthly production figures for all of the 9 new wells drilled in 2005. We can then build on this production level through the 2006 drilling program. "