Caspian Sunrise Share Discussion Threads

[togglebrush] 03/8/2023 07:53

History of Caspian Explorer
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Caspian Explorer when built in 20120/13 cost between $170 to $200 million and had a probable lile of 20/25 years, Replacement cost $300 million
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This was a well negotiated DEAL
CASP Financed the deal with placing in 2021 with 36,363,629 new ordinary shares issued price of 2.75 pence per share ("Placing Price"), representing approximately 16.2% discount to closing mid-price on 4 August 2020. or 1 Million GBP. A good deal.
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First option
For Half share of asset offered of some U$22.5m in 2023 (for a 50%share in the asset)
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Second option for sale of Explorer
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Current issued 2,250,501,559 shares the cash value of oprion for was 1 cent US per share for half Caspian Explorer and all issured shares
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In wild numbers if whole asset was sold at pro rata cash rate that is a capital value of 2 cents per share or in GBP near current share price per share.IMHO this is not a fire sale and better deals should be possible especaily with a works contract signed, Numbers to bear in mind.

[bluemango] 02/8/2023 22:41

Penrith

You're trying a little too hard mate, you need to cool off a bit or you'll blow a fuse.

No, you won't actually find many willing to take a break even price, investors are not in this just for peanuts but with an eye on the endgame.

[xclusive2] 02/8/2023 18:51

To add. They've stated that they need $95 to achieve the similar net-backs they're achieving now. Yes they're revenue is down but their profitability isn't. Achieving $38 is a real coup and domestic prices have increased to $28. If you look back pre Ukraine war, when we're Brent prices above $95 gross ? The domestic/MR sales offer far shorter payment terms which is great and providing the MJF girls continues to produce, they'll continue, the only issue being the pace of progress, a barge sale would obviously help matters.

[xclusive2] 02/8/2023 18:14

I take it you've read the accounts and as an accountancy requirement to include the 'going concern' commentary. They have $16m of liabilities, the largest bring the BNG licence debt currently being paid at $3.2m pa. They have listed the risks that would require additional funding ie oil prices, loss of sales to MRs, Oil Trader facility withdrawn, social development and annual BNG licence liabilities that could be called in. They've countered that with bank credit line of $5m available, oil trader line of $3m. They also have KO loan opportunity and can obviously reduce costs, stop Block 8 transaction and have the CE as an asset they can sell.If you look back to Covid when Domestic prices were sub $6 and international sub $20, they managed to survive. Also if you look at previous years, turnover of less than $15 most years, not profitable, prod at an average of 1300bopd, they are in a far stronger position now. Do yo answer your questions, it's a no to all and going Private, I've answered that many times. To add, if they took it Private, they'd lose everything especially with their liabilities and as with Total and 3AB, there would be KMG and other predators very happy to step in and takeover licences for zippo.KO and co are all in and they need this to succeed .Tic, tic.

[penrith] 02/8/2023 15:25

My attention at serious debate resulting from the current unknown financial health of the company was to propose three likely scenarios.1) A raise2) A fire sale.3) Go bust.Nobody responded to those suggestions including resident rampers .I would have said as a 4th option that they would take it private but they don't now have the money for that now.These boards (particularly the rampers) don't want to sensibly discuss the downsides...only the ups. Should I finish with Tic... Nah it's childish really.

[xclusive2] 02/8/2023 12:00

Penrith,Is that your effort @ serious debate ? Yes it won't take much to move it north and the only possible short term news could be a barge sale, every other news item is in the Sept bucket and probably month end. share price retraced 65% since recent high and bad news has now been communicated. I don't believe they'll be announcing any more deals until proof of funds agreed and no more school boy errors . As Konil stated, monthly turnover is c $1.65m pm and that is their current netback before costs. They have limited funds to go gung ho at any project and that's why funds should ONLY be spent on projects driving short term revenue whilst they continue to negotiate barge sale. They've allegedly got $15m in the bag for 2024 with the likelihood of more and that's more net cash than their turning over today. As you say, tick, tock :)

[penrith] 02/8/2023 11:19

'Won’t take much success to turn this around'
Tick Tock...lol

Trust/confidence is what is lacking.
If they released an RNS tomorrow stating the boat sale is now in its final stages and signatures are imminent...who would believe them?

[maxim1999] 01/8/2023 15:21

Is CC not part of the problem? Either he is a decision maker and decides the strategy in which case he has made poor decisions (see share price). Or he is not heavily involved and it's all done out of Kaz. Either way for what he is paid not great value. There have been a number of catastrophic errors. But the most easy to avoid I would suggest was paying a dividend without setting aside enough cash to know you could sustain it for at least 12 months

[bsg] 01/8/2023 11:41

x2 this is a working oil E&P company. A lot of the things are just day to day running issues. Which may seem large to some of us but probably run of the mill for them. So that's probably why they don't communicate all the minutiae with us, unless asked specifically.

[xclusive2] 01/8/2023 09:47

K,As you know, investors shouldn't have to flush out the true operational position but sadly it was needed due the lack of open and honest communication from HQ. I could've asked many more questions but I'd have wanted to do that f2f at the EGM but alas couldn't get there. Some investors gave feedback at the AGM that comms have to improve immediately so hopefully we get transparency from future RNS updates !You're right re current financial position and ability to meet their operational timeline. There's no way they can meet those commitments currently and they need to sell the CE and focus on the quick wins ie shallows. Sort 141/2/5 and drill the first SY well. Complete 802 and 803 to meet licence commitments but stop there until they have CE cash or have had shallow success. Until they do this, they will be running on fumes again and progress will be slow at best. If they don't stop the water ingress at MJF, their income will reduce and obviously damage the operational effort. Time for sone good leadership and decision making but not sure that this mob are up to it. Paying Divis was an absolute disaster at a time that they were obviously not financially strong enough to do so, absolute madness ! If it was my firm, there'd be a new leadership team and a fresh perspective as to what's required but sadly it'll never happen with current team.There's still huge upside here but if they don't prioritise the more immediate income generating projects, this will continue to be a huge disappointment. Our Mr Shin needs to get with the program and quickly !!

[konil] 31/7/2023 18:29

today's rns and the q&a on the website was awful even by casp standards...but awful not because it was unclear (although there were one or two ambiguities), but rather for the absolute dogs dinner they have made of the assets operationally. shin needs to be fired unless his hands were tied by ko, in which case ko is a total incompetent, which i doubt, so probably shin needs to go.

the good bit is that the comms today seems to be more straightforward and giving us both barrels - unfortunately its bad news rather than good news - but best to have it straight. yes, they could have explained some stuff better but overall a much better output than the bs we were getting hitherto. for this, thanks to smarty who has been making the bod aware of the importance of proper comms to 'outside' shareholders i.e. predominantlty the pi's.

let's hope they keep this up and even improve on it, rather than slip back to their old ways.



with the numbers provided today, casp are grossing c.$1.6m/month. this appears far too low to accomplish the rather unrealistic list of operational items slated for rest of 2023, there will undoubtably be lots of slippage in that list.

but if they make a success of the first 2 items this year, 802 and 141, production could recover to the 2200 to 2500 region, that's almost a 50% uplift at the top end and should avoid the need for crazy financial antics further down the road.

ce deal failure - not sure that is a bad thing as i always thought it was going too cheap. if a new deal improves on the net $15m casp were getting for 50% then that will be a good outcome. i'd rather they cut their cloth to suit their means for now, i.e. budget expenditure prudently and not sell the ce at all. the 2024 ce contract sounds promising and there could be more to come.

much as i liked having the divis, sod the divis for now and go carefully with the cash and concentrate on ops. clearly they over-reached their position in instituting divis so early - we were not to know that and i was glad to see the divis and assumed they would have ensured sufficient buffer, but hell no! this is casp! they should have been aware of potential slippage and not done it if things were as tight as has come to light.



so where now? my guess is there may be more short term pain for the sp, but either way, if they have been up front and all the bad news is out, then its likely that the share price will recover as they work through the list - assuming they deliver at least some success!

here's hoping
1. they have brought out all the skeletons now.
2. they get a coo who knows how to run a small e&p which includes standing up to management pressure for divis if it is not the right time for it.

[togglebrush] 31/7/2023 13:12

Question & answers for the Shareholder General Meeting on 31 July 2023

1. What is the current operational position at 802? You advised that the well was flowing at 700-900bopd and that you were stabilising the well. You also stated that total production exceeded 3000bopd so many investors assumed that the well was in production and not just for 3 days as communicated in FY accounts. We are now waiting for a part so please can you advise what that part is, what the issues are and what the exact plan is going forward including timeline.

The issue at Deep Well 802 was the issue encountered at most of the deep wells drilled to date at the BNG Contract Area, in that the high temperature and pressure prevented the well being completed as planned. Additionally, a pipe became stuck at the bottom of the well.

The initial well encountered significant oil shows at depths higher than expected, necessitating the drilling of a side track starting above the salt layer and running to the depth at which the oil shows were encountered. The drilling fluids (mud) used to control the well during drilling have set in the well and need to be cleared.

The plan is now to use coil tubing equipment to clean the tubing. Once the tubing is cleared we then plan to pull out the stuck pipe before completing the well ready for well testing.

Coil tubing equipment is on-site and operational. The planned coil tubing work programme is underway and is planned to be complete by the end of September.

2. Are you planning to drill onto the original TD on 802 after the completion of current work on the shallower zone?

Yes.

3. Why are you drilling 803 ahead of the A5 side-track and the A7 well? You state it was planned but that has never been communicated to investors.

The decision to first drill Deep Well 803 is led by the requirements of this year’s work programme.

Set out below is the planned work at the BNG Contract Area for the remainder of the year:

Deep Well 802
The coil tubing work programme at Deep Well 802 is underway and is planned to be complete by end September 2023.

Shallow Well 142
The well workover is planned to start at the end of August 2023.

Shallow Well 155
This new shallow well is planned to spud in mid-September 2023.

Deep Well A5
We expect a rig to become available in September with which we plan to drill a new 400-meter side-track from a depth of approximately 4,500 meters.

Deep Well A6
A workover to perforate a 6-meter interval at a depth of 4,300 meters is planned to commence in mid-August. This may however be delayed to allow the shallow horizontal well planned to be drilled on the South Yelemes structure to be drilled first using the rig and crew currently intended for Deep Well A6.

Deep Well 803
Deep Well 803 is planned to spud in mid-October 2023.

Deep Well A5
A 300 meter side-track is planned to commence in October 2023.

Shallow Well 141
The new side-track is planned to commence in November 2023.

Deep Well A7
Timing of the work to continue drilling at Deep Well A7 depends on the results from Deep Well A5.

The above is based on rig and crew availability and operational considerations and is accordingly subject to change and re-ordering without notice.

Other work planned for 2024 includes:

Shallow Well 153
Workover

4. What is the exact position at 141/142 and 145? Investors are in the dark as to what the true position is. We understand that there’s water ingress but it’s been almost a year since remedial work commenced and no progress. What is the current position and the next steps including timeline?

Well 141
Well 141 flowed successfully from 2016 to 2019 without any pause for a material workover.

As the result of an increasing water cut a rod pump was installed in 2020 with production continuing.

Following the success with horizontal drilling at wells 153 and 154, a horizontal side-track was drilled with the intention of boosting production to around 350 bopd.

During the horizontal side-track drilling we experienced a stuck pipe. The majority of which has now been retrieved but the final 27 meters remain in the side-track.

Our plan is now to drill a further side-track from a slightly higher level with the work planned towards the end of the year.

Well 142

Similarly, at Well 142 after a lengthy period of conventional production in 2022 a horizontal side-track was drilled. This initially resulted in production from the well increasing to approximately 950 bopd.

However, we encountered an issue with increasing water levels, which lead to an exercise to remove the well’s liner. The first 250 meters were successfully removed but the remaining 150 meters were lost in the well.

The plan is now to drill a new horizontal side track with work due to commence in Q3 2023.

Well 145

Well 145 is not currently producing. The issue is increasing water levels. Work is underway with external consultants to decide how best to isolate the water and return the well to production.

5. The conditional sale of the Caspian Explorer has been agreed in June and you were expecting to see the cash. Is there a problem, has the deal fallen through? If so, are there other parties you’re talking to that are interested in buying the CE?

Yes there is a problem. The deadline for payment has passed and despite repeated assurances no payment has been received.

We have therefore begun discussions with alternative purchasers, who are more likely to be interested in 100% of the Caspian Explorer and would therefore be expected to offer more than the $22.5 million previously agreed for 50% of the Caspian Explorer.

6. There was no mention of the oil sales split between domestic and mini refineries. It was 50:50, is that still the case?

For the year ended 31 December 2022 we produced 792,284 barrels of oil (48% more than in the previous year). In the period up to around the end of April 2022, when it was still economic to sell on the international markets, 237,144 barrels were sold on the international market.

Since we stopped selling on the international market the approximate split between sales to the domestic market and to domestic mini refineries has been 53% domestic and 47% domestic mini refineries.

7. You stated that you were going to improve oil sales income by doing the trading yourselves, is that the case?

#Yes. We have started sales trading and estimate the benefit to be approximately an additional $2-3 per barrel.

8. Discounted Urals price has increased to c $62 recently. What price does it need to be before you can consider exports again? You stated that taxes were based on the Brent price, is that still the case and is that likely to change going forward?

We are achieving net prices of approximately $25 per barrel for domestic sales and approximately $38 per barrel for sales to domestic mini refineries.

To make international sales worthwhile, bearing in mind the additional storage, transportation and tax involved and the additional 1-2 months to get paid, the net price for international sales would need to be better.

Our estimate of a breakeven point for international sales (i.e. before any “Urals” discount) is in the region of $95-100 per barrel.

In the event we do return to selling our oil on the international market tax would be levied based on the Brent price rather than the price achieved.

Although we can see no logic in this we are not aware of any intention by the authorities to change. However, should there be a change to base tax on the amount actually received, the level at which sales to international buyers would be economic should be significantly lower than the $95-$100 indicated above.

9. You state that you believe there’s untapped resources in the shallower horizons at SY that can be explored via horizontal drilling. When are you planning to drill the first well?

We are waiting on proposals from expert international drilling consultants before deciding exactly how to drill the well. The start date for drilling depends on rig and crew availability and is currently not expected to commence this year. However, there is the possibility of drilling this well ahead of the planned workover of Deep Well A6.

10. In the 21 FY accounts, you mentioned an interest in Wind Farms. In the 22 accounts it’s now minerals, can you supply more information on this possible venture inc any timings? Is the recent Midiel Engineering shareholding as a result of future mineral projects ie would they be involved?

We believe we have a competitive advantage in identifying and evaluating natural resource projects in Kazakhstan, which is not limited solely to oil & gas projects.

More than a decade ago, we considered a wind farm project and in the 2021 financial statements we noted that we may again look at such projects, provided we believe them to be commercial. However, we have not yet made any significant progress on this and do not have any specific wind farm projects under consideration.

Similarly, we are aware of potentially attractive and earnings-enhancing mineral projects, which we may look to develop. There are projects under consideration although no final decision has been taken on whether to progress any.

Any such development would be undertaken in the first instance by the Company. In the event any such project developed into a self-supporting stand-alone business we would consider spinning the entity off into a separate corporate vehicle.

11. The dividend has been suspended until you increase production from shallows/ deeps or receive the proceeds from the 50% sale of CE. If the production increases from 141/142 or 802, will you resume quarterly dividends and the likely quantum on reintroduction? If you receive the CE cash, what is the plan there? to pay a special dividend or to continue quarterly dividends and likely quantum or both.

Paying dividends continues to be a priority provided the company has the funds to do so without detracting from progressing the development of BNG, and also Block 8 in the event as expected that is acquired.

Exactly when dividends resume and the level of dividends and whether there might be a special dividend will depend on the financial position at the time and the then near-term financial outlook.




End of Question & answers for the Shareholder General Meeting on 31 July 2023

New writing style ... New Company Secretary ???

[spangle93] 31/7/2023 12:51

Baker Hughes is a global integrated service provider. It also has a field management division that works with smaller companies that don't have their own strength and specialisms (and where possible, tries to flog its own service lines).

As with any large contracting organisation, the quality it brings to the table is determined by the calibre of the personnel they assign to the job.

[xclusive2] 31/7/2023 12:43

Spangle,Maybe it's time for a new Operations Director ? Our Mr Shin and team received a bonus for 142 success a year ago, maybe a P45 a better decision. Are they capable of building production, last 9 months a resounding no but the oil is there allegedly and Baker Hughes struggling too.They need to steady MJF production snd that to me is the priority as it's the cash cow, that and the barge charter/sale. Much that the deeps are the catalyst to huge share price appreciation, they are a sideshow until they build the production from the alleged easier targets at MJF/SY. Yep, complete the deep licence commitments and shelve them until they've sorted the shallows and sold the barge. They can then resume the deeps/Block 8 when financially sound. Same goes for the Divis !

[penrith] 31/7/2023 12:18

I will start with Shame on the rampers who have probavbly sucked in a large number of newbies just to help their own agenda . I could say a lot more about the resident ones but I will leave it there.
The trouble with casp is that it is so difficult to analyse the facts because we are never given any. Each RNS contradicts the last. My gut tells me to sell up and take a large hit but like so many of us I need to be absolutely convinced that we are going down the pan before doing so. How long can we go without a raise, is there really a boat rental in 2024.
I would suggest there are three option 1 A raise in the hope that the raise will give suffint funds to get the shallows fully working...2 Somebody with a deep purse and expertise buys the company cheaply. 3 it goes bust. Timescale depends on current cash and income. Good luck ....we need it

[roy1982] 31/7/2023 12:17

Casper always does what it says on the tin. I have been collecting tins for 16 years and they all say the same thing, JAM TOMORROW.

[spangle93] 31/7/2023 11:46

Luck?
They should host courses in stuck pipe or formation damage because they are so successful at achieving both.

[togglebrush] 31/7/2023 11:41

For debate the problem is that the Board have been trying to make this company work for some 16 years

Key drivers Clive Carver 17.8yrs share holding some 0.10%

Kuat Oraziman (age 59) CEO & Executive Director 16.7yrs share holding 46.52%
$ 38.0m

Middle Directors the new drivers

Seokwoo Shin COO & Executive Director 3.3yrs

Aibek Oraziman Non-Executive Director 3.9yrs
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In may experience and statistic for Key drivers is that they were in their late 30's early 40's when they started. They should usually have been looking for a susbtantial expansion or change after 6 to 8 years provided that they were successful. Here both CC and KO are beyond what i call the "looking for fresh ideas new blood level". And have only recently posted their first profit.
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New middle rank directors usually are probably in their mid 20's to early 30's where 2 to 4 years experiebce in one job means they should be looking to move up or move on.
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IMHO
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Luck has not, and success has not, been kind to this board. I would suggest that company needs new blood with keeness enthusiasum and drive or need a takeover with new finance

[xclusive2] 31/7/2023 10:49

TTA,

I believe that the CE deal was fine but the other party reneged. Quite simply, shouldn’t have released news until they were confident of payment.





Et al,
I posed these questions as a concerned loyal long term investor with a large holding. I’m in contact with other concerned investors who also hold chunks of Casper. PIs can make a difference and can affect change so it’s important that all interested parties have their say. It’s a positive that they answered my questions but more important that we get transparency going forward. NO MORE BS AND OBFUSCATION !

PIs can cause all sorts of problems for a listed entity regardless of their minority position. This may be an AIM company but they want to retain their listing and don’t want PIs complaining to the regulatory bodies etc. Many believe that you can’t effect change, I know you can but let’s hope that going forward we see the transparency.

The priorities are those that will drive short term cash. They’ve got issues with MJF water ingress and had operational issues with all wells, maybe it’s time for a new operational lead as Mr Shin and his team have gone backwards.

KO clan is the biggest loser here and they will be desperate to turn this around. An active operational schedule but not funded to execute unless they sell the barge. Luckily they are selling their oil at better prices and an extra few $ by trading themselves and almost 50:50 MR/domestic which is important.

They’ve been I far worse positions but yet again, they’ve manage to grab defeat from the jaws of victory. Down but not out but they need to start getting success with the drill bit and quickly, that and selling CE.

[xclusive2] 31/7/2023 09:45

Penrith,Sensible debate, I'm all for that. Do you want to kick it off then .

[bluemango] 31/7/2023 09:32

Offer is 3.15, trades around that level are buys.

[tag57] 31/7/2023 09:09

Does CASP have the cash/cash flow to cover all the work listed in the RNS wish list?