Caspian Spuds First Well in Post-Salt Drilling Program

Caspian Energy Inc. reported that Aral Petroleum Capital LLP ("Aral"), in which the Company holds a 50% indirect interest, will spud the first exploration well, Baktygaryn #703, in its post-salt drilling program in mid-February.

Post salt production is established in this part of the basin. Existing post salt production occurs within the North Block, but the fields are owned by other companies. The relatively shallow post salt targets offer a completely new series of opportunities for the Company. Only by acquiring and interpreting the new 3D and 2D seismic over this area have these targets been identified.

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 well is expected to reach total depth of 2,500 metres in approximately 28 days.

Following release of the rig from well #703 it will move to a location on the eastern side of the salt ridge. This location, Baktygaryn #701, will be drilled to an estimated depth of 800 metres to test an area of seismic anomalies that terminate against a series of faults related to salt withdrawal. Well #701 is expected to reach total depth in approximately 15 days.

Both the #701 and #703 locations were identified from the interpretation of the Company's 3D seismic data acquired in the Baktygaryn area. Dask Drilling, a Kazakhstan company, has been contracted to perform the drilling operations.

From the 2D seismic data, several prospects have been confirmed or newly identified and from this work additional drilling locations are being chosen. Following the release of the rig from well #701, the Company is making plans for drilling efforts to move to the Itisay, West Kozdesay, and Aransay areas in the western part of the North Block to drill for Triassic and Upper Permian targets ranging from 800 to 1400 meters. Large salt ridges running through these areas have created multiple opportunities for traps against the salt and represent a completely new series of prospects for the Company.

Charles Summers, President and COO of Caspian Energy, Inc. commented, "This program offers a variety of targets, the successful drilling of which will add meaningful reserves. Once begun, the program provides for a series of quick to drill wells, which are relatively inexpensive, Therefore, the Company expects to make a series of important announcements over the coming several months."