VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 11/13/15 -- Caspian Energy Inc. (NEX: CKZ.H) ("Caspian") announces today that its wholly-owned subsidiary, Aral Petroleum Capital LLP ("Aral"), has produced positive results after completing a period of test production on two existing wells at its East Zhagabulak field in Aktobe Oblast, Kazakhstan. After approximately 10 months of inactivity, Aral operating staff performed basic geological and mechanical tests that involved re-opening the wells, removing paraffin, and testing oil pressure. The tests demonstrated a capability to resume production. An aggregate of approximately 3,750 barrels of oil were produced by Aral during the tests. Prior to such tests, production had been temporarily suspended in the first quarter of 2015 because of the dramatic downturn in world oil prices.
After recent positive developments with regard to Aral's current outstanding trade payables, the board of directors of Caspian (the "Board") has approved the resumption of limited production of about 750 barrels of oil per day by Aral. As noted in a news release dated November 9th, 2015, Aral has applied for protection from its trade creditors under the Law of the Republic of Kazakhstan On Rehabilitation and Bankruptcy through implementation of rehabilitation procedures (the "Rehabilitation Procedures"). The application for Rehabilitation Procedures resulted in an automatic moratorium of up to two months on claims by creditors, meaning Aral's bank accounts are currently protected from being embargoed and sales proceeds can flow as intended during the period of the moratorium.
"Oil production by Aral will produce marginal but still positive operational cash flows," said Michael Nobbs, Chairman of the Board. "Although higher crude oil prices are required to result in meaningful contributions to Aral's fixed costs and future capital expenditures, it is important for Aral to get back to production to secure its licences and maintain positive relations with the Kazakh government and the local community. The net sales proceeds will make a contribution to overhead, and we will also be well positioned to ramp up production in the future if a sustained increase in the price for our crude oil materialises."
Caspian is an oil and gas exploration and development company, operating in Kazakhstan through Aral, which has a number of targets in the highly prospective Aktobe Oblast of Western Kazakhstan. Caspian indirectly holds, through its interest in Aral, an exclusive licence pursuant to an exploration contract, which entitles it to explore and develop certain oil and gas properties known as the "North Block," an area of 1,467 square km, and a production contract for the area known as "East Zhagabulak".
This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation which we refer to herein, collectively, as "forward-looking information". Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved" and include statements relating to the Rehabilitation Procedures and planned production activities of Aral. Caspian's actual performance, developments and/or results may differ materially from any or all of the forward-looking statements. Further information which may cause results to differ materially from those projected in the forward-looking statements is contained in Caspian's filings with Canadian securities regulatory authorities. All material assumptions used in making forward-looking information are based on management's knowledge of current business conditions and expectations of future business conditions and trends. Although Caspian believes the assumptions used to make such statements are reasonable at this time and has attempted to identify in its continuous disclosure documents important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Caspian does not undertake to update any forward-looking information, except in accordance with applicable securities laws.
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Caspian Energy Inc.
Chairman of the Board of Directors
Caspian Energy Inc.
Chief Executive Officer