Caspian Boosts Oil Shipments by 100%

Caspian Holdings, an oil and gas production and exploration company with operations in in Kazakhstan, said that its quarterly oil shipment increased by 100% from 9,274 barrels in the March Quarter 2006 to 18,718 barrels in the June Quarter 2006.

The company said the increase reflects the results of the workover program and this year's drilling program. It has drilled and tested 13 wells in all, and 12 are productive—a 92% success rate. Presently, 11 wells are in production at a rate of approximately 300 barrels a day.

Positive drilling results from Wells 105 and 104 follow:

Well 105 was drilled to a depth of 578 meters on the edge of the Zhengeldy license area some 500 meters from the main cluster of wells. The well has been successfully perforated and tested and is currently producing approximately 35 barrels a day of clean oil with 5% water from the 226-228 meters Jurassic level. Production rates are expected to increase over the current September quarter.

Well 104 is the latest step-out well to be drilled and reached a target depth of 710 meters in early July. Evaluation of electronic log results indicated oil stringers at Triassic depth of 600 meters and a good, shallower oil pay zone of 4 meters at 175 meters. This shallow zone has been perforated, and testing is underway. Production test rates will be updated in September following production testing. Well 104 was the first well to be drilled in the unexplored Block 1--both the Triassic and Shallower oil leads will be actively pursued.

Results of 2006 Drilling Program

 Well  Depth  Drilling   Oil      Net Pay        Oil      Porosity  Tested rate
       meters   Days    Zones     meters    Saturation %     %         bopd
 101    455       22     2++          8         65%         30%           45
 102    400       16     2         10.8         90%         30%      Under test
 103    302       13     2           14         90%         30%          120
 105    575       20     2            7         80%         30%           35
 104    710       30     1            4         80%         30%      Under test

The drilling program will now move back to the salt lake to drill Well 109 to the west of the successful Well 103. Well 109 will explore the deeper levels of the field as well as seeking to add oil production levels between 100 and 400 meters.

“The new wells 104 and 105 were step-out wells and confirm oil reserves and potential production in a significantly larger area than we have drilled to date,” said Michael Masterman, CEO of Caspian. “We will now move back into the center of the license to drill Well 109 on the salt lake and expect to follow this with another two infill production wells to boost oil production.”