TIDMCASP
RNS Number : 4580E
Caspian Sunrise plc
30 June 2023
Caspian Sunrise PLC
("Caspian Sunrise", or the "Company")
AGM Statement
Update on the timing of the publication of the 2022 financial
statements; the impact of sanctions; and dividends
Ahead of its AGM today the Company provides the following
update.
Publication of the audited 2022 Financial Statements
The Board expects to approve its financial statements for the
year ended 31 December 2022 in the first week of July.
AIM Rule 19 re-quires that audited ac-counts are pre-pared
within six months of the year end. Therefore, in the event they are
not signed and published by Monday 3 July 2023 the Company expects
trading in its shares would be temporarily suspended from 7.30am on
3 July 2023 until publication.
While we cannot refer to any financial numbers to be included in
these financial statements we are able to confirm that 792,284
barrels of oil were produced in 2022, some 48% more than in 2021
and a company record.
Ukraine war
The two principal consequences of the Ukraine war have been to
make international sales uneconomic at the current time and to make
operating far more difficult.
Urals oil discount
Despite the UK and the EU specifically exempting oil produced in
Kazakhstan and transported through the Russian pipeline network
being free from sanctions, the large discounts for oil using the
Russian pipeline network and emerging as Urals Oil continues with
no sign of lessening.
We have explored various alternatives to transport our oil but
have yet to find a solution that would allow us to sell at or close
to international prices. We are therefore selling all our oil on
the domestic market at domestic prices.
Selling to the domestic market and to domestic mini refineries
does have advantages, such as speed of payment and the absence of
significant deductions for tax, oil treatment and transportation.
Nevertheless, we estimate the loss of revenue to be running at an
annualised rate of approximately $18 million based on current
production volumes.
For much of the period under review and subsequently our
inability to sell on the international markets also led to missed
profits. However, the recent fall in international oil prices means
we are currently achieving broadly the same net outcome by selling
to local mini refineries where the deductions to the headline price
are much lower, as we would by selling on the international
markets.
Operations
Before the Ukraine war the majority of international supplies
and consumables were sourced via Russia. Now they typically come
from China, a vast country whose border with Kazakhstan is some
3,000 kilometers from the BNG Contract Area and where the
originating destination is usually far further.
The extra distance involved and the complexities of this new
supply route with long delays at the border has typically resulted
in much greater lead times for key supplies and consumables
resulting in some significant operational delays. It has also
required a much greater investment in working capital as these
supplies and consumables have to be paid for many months earlier
than previously.
Drilling at certain key wells was paused waiting for key parts
and supplies with crews shifting from project to project. The
overall impact is that, while progress has been made across a
number of wells, it has not been possible to complete the work at
any to increase production to the levels expected.
Dividends
The financial backdrop to the board's consideration of dividends
in the immediate future includes:
-- We continue to forego approximately $18 million revenue each
year based on current production levels as the result of the
continuing discount for oil sent through the Russian pipeline
network
-- Sourcing all key drilling consumables via China has
significantly delayed operations and increased costs
-- As a result of the operational interruptions, we are yet to
increase daily production beyond the current 2,000 bopd
-- We have yet to receive the $22.5 million proceeds from the
conditional sale of 50% of the holding company for the Caspian
Explorer.
Accordingly, and with reluctance, the board has decided to
suspend further dividend payments until either the end of the year
or following a significant increase in production from Wells 141,
142 or 802 or the receipt of the $22.5 million proceeds from the
sale of 50% of the Caspian Explorer.
The 2022 financial statements when published will include a
detailed overview of our assets, progress in the year and
subsequently and our views on the future which remain very
positive.
Contacts:
Caspian Sunrise PLC
Clive Carver, Chairman +7 727 375 0202
WH Ireland, Nominated Adviser & Broker
James Joyce +44 (0) 207 220 1666
James Bavister
Andrew de Andrade
Qualified person
Mr. Assylbek Umbetov, a member Association of Petroleum
Engineers, has reviewed and approved the technical disclosures in
this announcement.
This announcement has been posted to:
www.caspiansunrise.com/investors
The information contained within this announcement is deemed to
constitute inside information as stipulated under the retained EU
law version of the Market Abuse Regulation (EU) No. 596/2014 (the
"UK MAR") which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018. The information is disclosed in accordance
with the Company's obligations under Article 17 of the UK MAR. Upon
the publication of this announcement, this inside information is
now considered to be in the public domain.
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END
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