London-listed Caspian Sunrise (AIM:CASP) said that oil has been flowing without artificial stimulation for four days at the Deep Well A5 at the BNG project in Kazakhstan.
Previously, the well had reached a a depth of 4,405 meters without incident, becoming the well’s Total Depth.
The well has since been successfully completed, extensively cleaned and perforated over a 63 meter interval from 4,331 meters to 4,394 meters.
Caspian further reported that whilst flowing over the past four days the volumes of produced oil had increased -- the last measured rate was taken as 1,500 barrels of oil per day with the group anticipating further increases.
Shares in Caspian Sunrise were trading 21.79% at 9.5p on Thursday morning.
For the time being, Caspian has said it will sell its oil from the Deep Wells at BNG in line with domestic prices which as of recent months stand at $26.
Despite the well's significance, the company has highlighted that it is too early to predict consistent production volumes and that the current rate of production ‘more than doubles’ the company’s total oil output.
Clive Carver, Executive Chairman of Caspian said that the well’s flows could face interruption or reduction but that the strength of the flows so far had been “extremely encouraging.”
“They lead the Company's management to believe Deep Well A5 will be a mainstay of the production expected over the coming years from the large quantities of deep oil believed to be present on the Airshagyl structure,” he added.
Currently, Caspian is planning a a 90-day flow test which will aid petroleum consultancy group Gaffney Cline to review the project’s reserves.
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