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Caspian Holdings maintains focus on overlooked oil fields in the United States

Published: 21:26 15 Jun 2010 AEST

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Microcap oil and gas developer, Caspian Holdings (LON:CSH) has reiterated its ambition to rebuild the company around overlooked oil projects in the United States.


The company, which was previously focused entirely on Kazakhstan, moved into the United States to diversify risk away from its ongoing dispute over the Zhengeldy Oil Field. Caspian did however investors today that it was continuing to fight the Kazakhstan’s Supreme Court’s ruling confirming the revocation of its wholly owned subsidiary Taraz LLP’s rights to Zhengeldy, and that any ‘remedy’ of the situation would be positive for investors as the company had already written off its Kazak assets on the balance sheet.


While Kazakhstan has undoubtedly been an unwelcome development for shareholders, the company has attempted to rebuild its asset base.  Last year it acquired a 50% stake in Black Gold Inc, a US based company focused on acquiring neglected, partially depleted oil fields.


Typically these are fields have significant remaining in-situ resources and existing infrastructure but yield very low quantities of oil per well (1-10 barrels of oil per day).

Black Gold’s primary focused has been on accumulating leases across the Irvine field, where wells are generally over 20-40 years old and in need of work-over to improve their operating efficiency. While of little interest to oil Majors, Caspian believes that these wells offer good potential for cash flow and margins at oil prices of over US$50 per barrel.


As part of its ambitions to increase production in the US, Caspian announced earlier this week that it had raised £0.2 million through the placement of 80 million shares.  Michael Masterman, Executive Chairman of the company, subscribed for 20 million shares, taking his personal holding to approximately 161.7 million shares, or 36.25% of the outstanding equity.


Caspian’s broker, HB Markets, placed the remaining 40 million shares with institutional investors and has a 'speculative buy' rating on the stock.

 

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