Caspian Energy Announces Testing Results and Drilling Operations Update

Friday, November 18, 2011

Today we are pleased to report that after 125 days of drilling activity on well 308, in the East Zhagabulak field, the target depth of 4700 meters was reached.

Based on the core samples, recovered and the mud logs, APC is pleased that the existence of hydrocarbons in the central part of East Zhagabulak has been confirmed. Moreover, the initial evidence suggests that the thickness of the carbonate in well 308, in particular, the producing zones referred to as the KT-II, closely match the profile of the KT-II in the neighboring producing wells 213 and 301.

In the very near future, APC plans to perform a well log survey in well 308's borehole. In order to obtain detailed information on the lower part of the KT-II oil-bearing formation, it has been decided to deepen well 308 by an additional 80 meters; the new total depth of the well is 4780 m., which should be reached very shortly.

Well 316

Well 316 is being drilled on a separate structure in West Zhagabulak and is approximately 10 km from well 308. Well 316 is targeted to be drilled to a total depth of 4700 meters. The primary target is the KT-II formation. As of yesterday well 316 had been drilled to a depth of 3800 meters.